Unleash the power of consumption

• Source: Global Times
• [02:05 December 09 2009]
• Comments

The Central Economic Working Conference of 2009 could make a real, and encouraging, difference to the common man.

Of the key tasks the central government has listed for the coming year, stimulating domestic consumption demand has moved higher up on the agenda. Last year it was listed No. 3 and now it is No. 2.

While market analysts and China watchers are busy reading between the lines of official documents for signs of fiscal and monetary policy shifts, the ordinary Chinese would judge the past year's economic strength by the figures on their salary slip.

China has recorded 7.7 percent GDP growth during the first three quarters of this year – a rare achievement among major economies. But, perhaps, not many feel the feat has translated into tangible income growth that would allow them to indulge in expenditure suited to good times.

The National Bureau of Statistics released data in October indicating that the income of urban residents grew by 10.5 percent and of rural residents by 9.2 percent from a year ago. The public disputed the figures as it was obviously far from what they've actually received.

Consumption accounts for 36 percent of the GDP in China, compared with 70 percent in the US. While the per capita GDP of China is only about 1/20th of the US, living cost in Chinese cities continue soaring way ahead of other major cities in the world.