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China needs national plan to boost consumption: expert

(Xinhua)
Updated: 2009-11-21 14:39

High savings and weak consumption remain the main structural problem for China's economy, and the country needed to craft a national plan to boost consumption and adjust the economic structure, an expert said.

In an interview run by the China Securities Journal on Saturday, Xia Bin, a researcher with the Development Research Center, a think-tank under the State Council (cabinet), said China's GDP growth in 2010 would mainly rely on expanding domestic demand.

"In the first three quarter this year, net exports drag down GDP growth by 3.6 percentage points. Next year, whether net exports will make positive contribution to GDP growth remains a challenge," he said.

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So, China needed a consumption-oriented structural adjustment plan in order to help the economy further expand domestic demand, especially residents' consumption, Xia said.

The Chinese economy needed unparalleled growth of consumption, which had never been seen in the past more than 10 years, to make up for slump exports and weak private investment, he said.

According to Xia, such a national plan should include measures and incentives to spur residents' consumption, reduce saving ratio among companies and governmental departments, raise individual income and put dividends of State-owned company shares into fiscal budget.

China's GDP expanded 7.7 percent year-on-year in the first nine months this year. According to the National Bureau of Statistics, consumption in the first three quarters contributed 4 percentage points to GDP growth while investment accounted for 7.3 percentage points. Net exports had an adverse impact on the economic growth.