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People's Daily Online>>China Business

Domestic consumption takes the driver's seat

By Ding Qingfen and Diao Ying (China Daily)

10:09, March 22, 2012

Domestic consumption will be the main driver of China's economic growth this year, said a Ministry of Commerce think tank.

It is set to surpass government investment for the first time in a decade, said the Chinese Academy of International Trade and Economic Cooperation on Wednesday.

"The increasingly burgeoning income for Chinese individuals and their growing willingness to spend are major reasons behind the consumption growth," said Zhang Ping, deputy director of the Department of Consumption Economics at the academy and head of the team drafting the report.

The 2012 China Consumption Market Development report suggested that the Chinese government should maintain policies to continue expanding domestic consumption.

That includes lowering taxes on consumer and luxury goods, deepening income distribution reform, and continuing tax rebate policies.

Government investment has long held a leading role in stimulating the nation's economy, along with domestic consumption and exports.

However, the outlook for government investment this year is not positive, Zhang said.

Economic crises in other countries have also battered exports.

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