Rural demand at the core of Beijing’s new economic drive

This is a very important move in resturcturing the Chinese economy. Even in the fiscal stimulus package, the Chinese government implemented incentives to increase rural demand. The rural population can take over the drop in demand due to fall in exports. Also, this will bring out the millions of Chinese out of poverty and give them access to modern age facilities.

The author feels that these measures are well intended, but the government should take care that efficiency(output) is not affected due to all the subsidies. Also, the subsidies might not be in the interest of world-wide free/fair trade.

http://www.chinaknowledge.com/Newswires/News_Detail.aspx?type=1&NewsID=29498

http://www.ft.com/cms/s/0/9caf9dce-e34c-11de-8d36-00144feab49a,dwp_uuid=9c33700c-4c86-11da-89df-0000779e2340.html

Karthik

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