Government of China tries to help economy stay afloat

A program of measures to be undertaken for emerging the economy in the country was outlined this week by the Chinese government. A series of measures will be mainly adopted to help boosting exports and consumption as an attempt to cope with the ever worsening economic environment. Among these there are plans to enhance tax incentives for exporters of machinery and electronic products. Besides, China wants to review the list of product categories where foreign investment in processing trade is permitted so as to add more items.

The program also makes provisions for increasing subsidies for farmers buying household appliances in a bid to tap the potential of the 800 million consumers living in the countryside. Besides, government is determined to spend money on supporting retail outlets in urban and rural areas. Additionally China is going to introduce yuan as payment means for transactions with neighboring economies in an attempt to convert it into an international currency. At the moment major part of China’s foreign trade deals are settled either in euros or US dollars.

Obviously, Chinese economy is implacably driving to hard times inasmuch as its foreign trade sector was directly hit by the financial crisis that inundated the world. China’s exports fell 2.2% in November as compared with the previous year. It was the first decline observed in over 7 years. Having achieved the rank of the third largest economy in the world China will have its growth slowed to 7.5% in the following year, which is the worst performance since 1990.