In 2012, commercial departments at all levels conscientiously implemented the overall deployment made by the CPC Central Committee and the State Council. In light of “introducing policies, building systems and platforms, and promoting key projects”, commercial departments at all levels accelerated the development of modern circulation, constantly improved market circulation system, gave a further play of circulation in guidingconsumption, creatingconsumption and protecting consumption, and enhanced the important role of the consumption played in promoting the harmonious development of economy and society.

I. Introduction of promotion policies

In order to strengthen inter-ministerial coordination and communication, MOFCOM submitted to the State Council for issuing Opinions on Deepening the Reform of Circulation System and Accelerating the Development of Circulation Industry (Guobanfa No. 39 [2012]) and Plans for the Development of Domestic Trade in the “Twelfth-Five” Year Period (Guobanfa No. 47[2012]) as well as introducing a series of polices and measures for invigorating circulation and expanding consumption.

1. Policies on planning: MOFCOM brought commercial network planning into overall city planning and land use planning, as well as construction of township Commercial outlets into planning for small towns; and clearly provided that the area of newly-established community commercial and service facilities shall not be less than 10% of the total construction area of the community.

2. Policies on taxition: Wholesale markets of agricultural products and farmer’s bazaars are exempted from urban land using tax and real estate tax and vegetables and other fresh agricultural products are free from value - added tax in circulation. MOFCOM implemented policies such as housekeeping service enterprises to be exempted from business tax and consolidated tax payment of head office and branches, promoted pilots of “changing sales taxes into value added taxes” and expanded the scope of sales taxes and threshold of VAT.

3. Policies on financing: MOFCOM expanded the scale of financial supporting funds and focused on supporting the construction of pilots of modern service industry, public welfare distribution facilities, agricultural products and rural circulation system, information technology of circulation, services for living commodities, renewable resource recycling system, development of small and medium circulation enterprises, and green circulation.

4. Policies on land use: Using old factories and idle warehouses to build circulation facilities in line with the planning is encouraged. With approval of relevant departments, rebuilt or relocated old towns could be sold for circulation enterprises’ use. MOFCOM encouraged providing places for circulation enterprises by leasing and supporting using of rural collective construction land in accordance with the law.

5. Financial policies: MOFCOM supported public financing, debt financing and establishment of financial companies of qualified large-scale circulation enterprises, improved consumer credit policies, supported the development of new consumption industry and new consumer market, and encouraged insurance institutions to develop fresh agricultural products insurance.

6. Policies on fee reduction: MOFCOM lowered rates for credit card, promote the same prices of electricity and water in industrial and commercial fields, and banned various kind of violated and unreasonable toll as well aslowered charging standard.

II. Construction of Promotion System

Commercial departments at all levels have made efforts to expand consumption through establishing and improving the modern circulation system at recent years.

1. Perfection of circulation system forfacilitating consumption: In rural areas, key projects such as “Marketing in ten thousand villages” were implemented continually and standardized farm shops had covered 75% of the administrative villages. While in urban areas, commercial construction in communities was expanded, for newly-built or rebuilt convenient vegetable bazaars had covered 20% of the cities. MOFCOM founded “National E-commerce Demonstration city”, “National E-commerce Demonstration Base” and “E-commerce Demonstration Enterprise”, promoted the popularizing and applying of e-commerce, and guided the healthy development of online shopping and other new forms of consumption. And also, MOFCOM guidedcooperation of circulation enterprises and financial institutions, simplified procedures, and reduced the cost of individual credit consumption as well as supported consumer credit preferential policies pilots of "zero fees, zero down payment, and low interest rates”in some places.

2. Perfection of circulation system for affordable consumer goods: Applications modern logistics technology and urban distribution pilots were launched in 9 cities, and modern circulation comprehensive pilotsof agricultural products, “southern food transported to northern China”, and "Western fruits transported to eastern China” were implemented in 36 cities. In addition, 7 wholesale markets of agricultural products were transformed and upgraded, as well as 41 farmers' bazaars and circulation infrastructure for agricultural products of 164 circulation enterprises; “Directly link between farmers and supermarkets” were implemented in over 40 medium-and-large sized cities. MOFCOM promoted more than 20 provinces and cities to carry out pilots of “direct supply and sales of vegetables”, and “Directly link between farmers and wholesale markets”. Collecting and distributing centers in 65 places of origin and 12 trading and distribution areas were established in main sales areas.

3. Perfection of circulation system forhot consumer goods: MOFCOM actively expanded brand sales, and determined a number of pilots of brand promotion system and contract points of gathering areas of branded consumer goods; continued to implement “projects of revitalizing time-honored brands” and 1,128 time-honored brands were included into the list of China's Time-Honored Brand. MOFCOM expanded consumption of residents’ services, and had supported the construction of domestic service centers in 164 medium-and-large sized cities, fosterednearly 300 standard domestic service enterprises, and trained 1 million domestic staff. In view of “breakfast demonstration project”, 99 staple food processing and distribution centers and 18,000 fixed breakfast outlets were newly built or reformed, as well as, finance leases, pawn, and auction industry were push forward.

4. Perfection of circulation system for recycling consumer goods: MOFCOM supported the work of recycling pilots of renewable resource in 24 cities, the construction of recycling bases for renewable recourse in 12 provinces, the construction of recycling and dismantling system for scrapped automobiles in 13 pilot provinces and cities, as well as the upgrading of second-hand cars trading market in 10 pilot provinces and cities. MOFCOM also determined 249 companies as the first batch of demonstration enterprises of energy saving and environmental protection in circulation industry, organized and launched demonstration project of “Three Green Project Pilot”, which is to promote green procurement and green markets and to guide green consumption.

5. Perfection of circulation system for safe consumption: MOFCOM actively promoted the construction of flow back system of meat, vegetables, Chinese herbal medicines and alcoholin 35 cities and 5 enterprises, organized to cracking down on infringement and counterfeiting goods, improved market regulation and " safe meat" service system, and launched the designation and check-up of qualified slaughtering house of pigs, and also vigorously push forward the construction of credit system and build credit pilot in 10 cities as well as publicity month of boosting commerce through credit with 15 units.

III. Building of promotion platforms.

MOFCOM built public promotion platforms based on enterprises, highlighting the public welfare and the protection of consumers’ rights and interests, and publicizing scientific consumption and the concept of integrity in business.

1. To build national promotion platforms: MOFCOM organized and launched national promotion month activities around five contents, namely, brand consumption, credit consumption, online shopping, green consumption and food consumption from April to May this year. More than 80,000 enterprises participating in these activities achieved sales value of 328 billion yuan, with a year-on-year increase of 16.1%.
2. To build promotion platforms with characteristics: Local commercial departments fully mobilized the enthusiasm of industrial associations and relevant enterprises to make the most of characteristics of local consumption, industrial development advantages, local characteristics and cultural styles to carry out rich and varied promotion activities during the holidays. In the year of 2012, MOFCOM focused on supporting large promotion activities with characteristics held by 70 local governments and national industrial associations, for example, during Shanghai Shopping Festival, 489 medium-and-large sized enterprises had achieved sales value of 24.6 billion yuan, and the growth rate was 3.9 percentage points higher than that of enterprises above designated size in Shanghai.

(to be continued)

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