Wed, March 07, 2012
Business > Economy

Chinese set record for overseas buying

2012-03-07 08:12:05 GMT2012-03-07 16:12:05(Beijing Time)  China Daily

Shoppers at Harrods department store in London. According to China UnionPay Co Ltd, overseas consumption made through its credit card network jumped by 66.7 percent to 300 billion yuan ($47 billion) last year, up from 180 billion yuan in 2010. [Photo / Reuters]

The Chinese may have spent more than ever in their history on overseas purchases in 2011, a year that saw a large increase in the value of the goods they bought using bank cards.

That's what a senior executive at China UnionPay Co Ltd, the only credit card network in the country, said on Tuesday.

Su Ning, the board chairman of the bankcard association China UnionPay and a former deputy governor of People's Bank of China, the country's central bank, said the value of overseas purchases made through its network increased by 66.7 percent to reach 300 billion yuan ($47.5 billion) last year, rising from 180 billion yuan in 2010.

If the account also looked at cash payments, which Chinese consumers prefer to use when buying goods, "the total overseas spending figures would be astonishing", he said.

Su is also a member of the Chinese People's Political Consultative Conference and made his remarks while attending a group discussion held on Tuesday.

He said the government should charge lower import tariffs on goods, especially on luxury products. Doing so, he said, will help move consumption from the overseas market to China.

To boost imports, the second-largest economy in the world has lowered the import tariffs it charges on 730 kinds of goods since Jan 1, said Finance Minister Xie Xuren on Tuesday. But those changes have stopped short of lowering the tariffs charged on luxury goods.

An official at the Ministry of Finance's budget division said on Tuesday that import tariffs and consumption taxes have contributed greatly to the country's fiscal revenue, as have value-added taxes.

Authorities plan to work harder to rebalance the economy and ensure that consumption plays a larger role in supporting economic growth, Premier Wen Jiabao said when he delivered his annual report at the opening of the National People's Congress on Monday.

"Although external imbalances have improved markedly, internal imbalances have deteriorated, thus requiring urgent structural reforms to achieve a shift to consumption-driven growth," said Liu Ligang, head of China economics at Australia and New Zealand Banking Group Ltd.

In 2011, domestic consumption contributed 51.6 percent of the country's GDP growth, according to data from the National Bureau of Statistics. The value of retail sales last year stood at 18.1 trillion yuan. That was an increase of 11.6 percent from the year before if the effect of inflation is excluded from the results.

Despite that apparent increase, the actual rise in consumption was likely much smaller, since the final figure was buoyed by government spending, said Xu Shanda, former president of the State Administration of Taxation.

"Although the country is promising to stoke domestic demand, we, as local government officials, have very few ways to spur consumption," said Li Yong, director of the management committee of the Tianjin Economic-Technological Development Area.

"And boosting investment is still preferred by officials because it is the most efficient way to shore up GDP growth."


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