Chinese authorities want more internal consumption in 2006

2 December 2005

Beijing, China, 02 Dec – The Chinese government said Thursday in Beijing China it had plans to control investment and increase household consumption as part of its economic targets in 2006.

“Rapid growth is imperative to increase the country’s economic power and alleviate the contradictions of social and economic development,” according to a document signed by the President and Prime Minister of China.

The document, signed by Hu Jintao and Wen Jiabao, considers that efforts should be made to balance the relationship between investment and consumption by increasing internal consumption.

The two government leaders also believe it is urgent to help the poor rural populations that were forgotten during two decades of economic development.

The Chinese economy, in the last ten years has essentially been driven by investment, the document says.

President Hu and Prime Minister Wen also consider that China should maintain a “reasonable level of investment” while controlling spending on new projects.

In the first nine months of 2005 the government’s investment in infrastructures such as roads and power plants increased 24% in relation to the same period of 2004.

The government is also committed to improving the structure of imports and resolving the trade imbalances in reference to the fact that Chinese exports are largely supported by intensive and cheap labor.

The Chinese economy, the second largest in Asia, grew 9.4% in the first nine months of the year, while inflation fell to 2%.

The documents signed by the president and prime minister signed says that additional measures will be implemented to increase the economic power of the rural population through greater investment in education, culture and public health. (macauhub)