Three new government departments have been charged with developing policies to boost domestic consumption post-SARS, vice-minister of commerce Zhang Zhigang said yesterday.

"By these measures, we are working towards our growth target for retail sales, which have slowed due to the SARS (severe acute respiratory syndrome) crisis," Zhang said.

For the first half of this year, retail sales rose a year-on-year 8 percent to 2,155.6 billion yuan (US$259.7 billion).

Their targetted annual growth rate is 9 percent year-on-year.

The SARS outbreak has had a great impact on consumption, one of the three driving forces for the country's economy.

"The second half of this year is critical if we are to realize the 9 percent target," Zhang said.

The ministry will work with commerce, farming, manufacturing and banking industries to further stimulate domestic consumption, Zhang said.

Assistant Minister Huang Hai said three newly-established departments in charge of domestic trade are developing detailed policies to be released soon.

"They are trying to develop more innovative measures to expand domestic consumption," he said.

The Department of Market System Development, the Department of Commercial Reform and Development and the Department of Market Operation Regulation were set up recently after a government restructure.

They are responsible for developing plans for internal trade, advising on reforms in logistics, nurturing urban and rural markets, and promoting modern logistics modes such as chain operations and electronic commerce.

The Ministry of Commerce was created during the 10th National People's Congress in March, by incorporating the domestic and foreign trade administrations of different government departments.

It is a combination of the former Ministry of Foreign Trade and Economic Co-operation (MOFTEC), the State Economic and Trade Commission (SETC) and part of the State Development Planning Commission (SDPC).

The move is designed to streamline the management of trade.

"The number of departments in charge of internal trade has increased to three from the original one in SETC," Huang said.

"The change reflects the importance we put on the exploration of the domestic market and expansion of domestic consumption."

Vice-Minister Zhang said China will try to stimulate domestic consumption and explore new economic growth points, including automobiles, housing, telecommunications, education, healthcare and tourism, in the latter half of 2003.

The country will also tap into the rural market and promote e-business, Zhang said.

(China Daily August 5, 2003)