China's National Development and Reform Commission has recently requested price administration departments at all levels step up their supervision of commodity prices during the Chinese New Year holiday.

The commission also asked local authorities to provide direct subsidies for low income people when needed. These efforts are aimed at boosting domestic demand amid a national as well as global economic slowdown.

But a commentary in the 'Beijing Youth Daily' argued that the subsidy for low-income
people and families is still not enough to stimulate large-scale and long-term market demand as the poorer people still spend the money on daily necessities and limit their cash outlay as much as possible.

The article goes on to say that indirect subsidies are more appropriate. It cites some local governments which are providing subsidies for rural residents to buy household appliances.

In this way, the paper says the government has created a huge consumer market in China's rural areas, which is worth ten times that of the government's subsidy. It notes both manufactures and sellers look likely to benefit from this policy.

The paper therefore suggests the government combine direct and indirect subsidies to ensure social equality.