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More subsidies urged to boost economy

CHINA should offer more subsidies to encourage the purchase of homes, cars and home appliances to boost domestic consumption against the fallout from the economic downturn.

The central government should set up a special fund to subsidize local governments which could invest in affordable homes as these projects cannot generate fiscal revenue for them, the State Information Center, an affiliate of the country's top planning body, said in a report today.

The center also called for more housing subsidies for buyers as the current standard was mapped out in 1998 when the housing price was 3,500 to 4,000 yuan a square meter on average.

China's retail sales expanded 21.6 percent last year, 4.8 percentage points faster from a year earlier, but the figure does not reflect the "whole picture" of the country's consumption as it did not include spending on serves and homes, the research agency said.

China's total consumption, adjusted for inflation, expanded 9.6 percent in 2008, 1.5 percentage points slower than in 2007 due to the slumping real estate market and consumers' cuts in spending during the crisis, it said.


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