CHINA: DOMESTIC DEMAND AS A LONG-TERM STRATEGY

CHINA PUTS FOCUS ON CONSUMERS TO DRIVE GROWTH

Kevin Yao and Aileen Wang

Reuters, March 5, 2013

BEIJING (Reuters) - China put its fast-growing consumer class at centre-stage as outgoing Premier Wen Jiabao set out a reform plan on Tuesday to spread the fruits of economic growth more evenly in the country of 1.3 billion.

Wen said unleashing the power of China's consumers was vital to the future of the world's second biggest economy and called for accelerated reform of the rigid hukou household registration system to drive an urbanisation effort that he said underpinned the country's programme of economic development.

"We should unswervingly take expanding domestic demand as our long-term strategy for economic development," Wen told delegates assembled in the Great Hall of the People for the once-a-year meeting of China's National People's Congress (NPC).

"To expand individual consumption, we should enhance people's ability to consume, keep their consumption expectations stable, boost their desire to consume, improve their consumption environment and make economic growth more consumption-driven."

Wen made consumers the cornerstone of an economic strategy designed to deliver an overall growth target of 7.5 percent in 2013 - a level China barely beat in 2012 when growth eased to its slowest pace in 13 years, expanding by 7.8 percent.

Rebalancing growth away from the investment-driven, export-oriented model that has delivered three decades of double digit growth, lifted hundreds of millions of people from rural poverty and turned China into the world's biggest trading economy, has been a policy priority for much of Wen's decade in office.

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