"In such a big city, driving a car would be a lot more convenient. I can afford a car now, and the government reduced the purchase tax for small cars, so I bought it," she said.

Echoing the recovering auto market, the 13th Shanghai International Automobile Industry Exhibition, which ended on April 28, became an auto fest for carmakers.

Floor areas for the exhibition hit a record of 170,000 sq meters this year. More than 1,500 auto and auto part companies, including those from China, the United States, Germany and Japan, took part in the exhibition.

"Automakers are cutting funds for auto exhibitions across the world, but the Shanghai exhibition is an exception. If they only have budget for one exhibition, that will be the Shanghai exhibition, because China is the only growing auto market in the world," vice president for the Shanghai International Exhibition Co., the organizer, Lu Ren said.

During the 9-day show, more than 600,000 visits were made. Some high-end brand cars, such as Rolls-Royce and Bentley, were sold out on the media day before the exhibition started. The Chinese market has become the most important for automakers across the world.

According to Volkswagen's first quarter report, China has overtaken Japan to become Bentley's fourth largest market. Last year, Bentley's sales in the global market fell 25 percent year on year, but rose from 318 units to 518 units in China, up more than 60 percent.

In addition to auto markets, home sales in the first quarter also showed positive signs.

At April's Beijing Spring Real Estate Trade Fair, from April 8 to 12, more than 150,000 people visited the fair and signed intention contracts worth more than 3 trillion yuan.

"Houses are one of the largest spending for Chinese people. They may spur consumption in related sectors such as decoration, furniture and home electronic appliances. Home sales may play a big part in stimulating domestic consumption," a researcher with the National Development and Reform Commission, Zhang Hanya, said.

"The catering industry may best reflect Chinese consumers' willingness to spend," John-Williams said. "In major cities like Beijing, Shanghai and Guangzhou, I have not seen any signs of economic contraction."

Ding said there were two approaches to spur economy.

"One is short-term stimulus plan, which may rely on investing real estate industry and infrastructure projects. The other is long-term stimulus plan, such as urbanization, social insurance system improvement, education and technologies."

The first round of stimulus package aimed at quickly spurring the economy, but new stimulus packages should focus more on long-term goals. People will spend more only when they feel social insurance has been put in place," he said.

(Xinhua News Agency May 4, 2009)