Low-income earners in rural areas were more active consumers than those on higher salaries in the 2002-06 period, the National Bureau of Statistics (NBS) said.

 

The bureau put rural residents into five categories by income level and found low-income earners spent 61.4 percent more in 2006 than in 2002. The growth rate for middle-income earners was 56.1 percent and for high-income earners 50.8 percent during the same period, the bureau said in a report released yesterday on its website.

 

Supportive policies have seen consumer growth in all rural regions increase rapidly, the report said.

 

Farmers in Northeast China, which covers the three provinces of Liaoning, Heilongjiang and Jilin, registered the highest consumption growth rate of 62.7 percent, followed by the central provinces.

 

This indicates a more balanced consumer structure nationwide, analysts said.

 

Since the nation put forward the idea of promoting scientific development and building a harmonious society, policies have been implemented that have significantly improved income and living standards, which are behind the increased consumption, the report said.

 

In 2006, urban residents earned an annual income of 11,759 yuan, 52.7 percent more than in 2002, when the 16th National Congress of the Communist Party of China was convened, the report said. The inflation-deducted annualized growth rate was 9.2 percent during that period.

 

Of urban residents' income sources, that from household businesses and property has more than doubled compared with 2002.

 

Farmers, meanwhile, registered a 44.9 percent growth in income. The annualized income growth was 6.2 percent excluding the impact of inflation, the report said.

 

Rising wages have pushed up consumption, the report said.

 

In 2006, urban per capita consumption expenditure increased 44.2 percent over four years ago.

 

In rural areas, farmers spent an average of 2,829 yuan each in 2006, an increase of 8 percent per year since 2002.

 

The annual growth rate of farmers' consumption in the past four years was 1.8 percentage points higher than that of their income growth, indicating accelerated consumption, the report said.

 

Farmers' expenditure on transport, communications and health increased by the highest rate during the 2002-06 period, the report said.

 

Expenditure on transport and communications increased by 1.2 times while health spending rose by 84.2 percent. Money spent on clothing increased by 60 percent.

 

The report said Chinese spent more on non-food items such as entertainment and health.

 

Transport and communications are a new consumer growth engine.

 

In 2006, the per capita expenditure by urban residents on transport was 607 yuan, 1.27 times that in 2002. Communications expenditure for this group increased by 50.4 percent.

 

Culture and education expenditure by urban residents increased by 33.4 percent from 2002 to 2006, while their health expenditure rose by 57.4 percent.

 

In rural areas, the aggregate proportion of expenditure on transport and communications, culture, entertainment, education and health combined increased by 3.6 percentage points, the report said.

 

Reduced expenditure on food is reflected by the declining Engel coefficient, or proportion of expenditure on food to total consumption, an international measurement of living standards.

 

In 2002, the coefficient in urban areas was 37.7 percent. In 2006, it dropped by 1.9 percent, indicating the improved structure of urban consumption.

 

The rural Engel coefficient was 43 percent in 2006, 3.2 percentage points lower than in 2002, the report said.

 

Another sign of changing consumer habits is that the proportion of expenditure on services has been on the rise, the report said.

 

From 2002 to 2006, urban residents spent 47.9 percent more on services, while the proportion of services expenditure to overall consumption rose by 0.7 percentage points.

 

Farmers spent 64 percent more on services from 2002 to 2006 and the proportion of their services expenditure to overall consumption rose by 1.8 percentage points, the report said.

 

The improved consumer environment has given residents more access to quality products and services, the report said.

 

In terms of consumption structure, urban residents are consuming less grains dining out more frequently.

 

Rural residents, meanwhile, are consuming less grains, vegetables, edible oils and sugar while their demand for meat, eggs, milk and aquatic products has risen rapidly, the report said.

 

The change in the structure of food consumption indicates living standards are improving in rural areas, the NBS said.

 

(China Daily October 11, 2007)