In China’s eastern coastal province of Zhejiang, there is an overall
difference in consumption between urban and rural residents - displayed
in the ability to consume and the types of goods and serviced consumed.
The wide income gap between urban and rural residents who also have
different consumption concepts are some reasons behind the difference.
The different stages of commercial and urban development, or the
consumption environment, between urban and rural areas also affect
consumption. China’s social security and household registration (Hukou)
policies, yet to be improved, also have a role in swaying consumption
The government has tried various ways to narrow the gap so to keep
domestic consumption vibrant in both urban and rural areas. In the
immediate term, it has launched various subsidized purchasing or
consumption-boosting programs for rural residents. Some of these
programs provide farmers with expanded sources of income, and they
earn more.
Infrastructure construction to build more roads to rural areas, to supply
electricity and water to villages, and to bring telecom technology,
including the Internet, to rural areas are on-going work to improve the
consumption environment.
In the medium term, the government will reform social security and
household registration. It aims to let more rural residents and migrant
workers enjoy the same public social services as urban residents. With
better social treatment, it encourages rural residents to spend as actively
as city folks do.
