Income rise key to stimulating economy

By Wang Yanlin | July 7, 2009, Tuesday |

Print Edition

THE priorities to stimulate China's consumption should include raising the wage of low-income households, accelerating the construction of a better social security system and controlling the income gap between the wealthy and the poor, said Ma Jiantang, head of the National Bureau of Statistics.

He also said China's economy grew in the second quarter while inflation would not become a threat to the country in the short term.

"China's economic growth has been supported mainly by exports and investment in the past few years. It is high time to boost consumption to help the country counter the global recession," said Ma at the sidelines of the Global Think Tank Summit in Beijing, according to the China Securities Journal yesterday.

The government has been trying to stimulate domestic consumption to reduce the reliance on exports as the major driver of the economy.

Ma said low-income households had the biggest potential to increase spending if they gained more purchasing power.

Meanwhile, Ma said foreign countries should not "demonize" Chinese investment which was inevitable because of its huge savings.

"A country can't develop without investment. It is especially true in China for the abundant deposits here. Given the investment is appropriate and adequate, it is an irreplaceable way to boost the economy," Ma said.

The pace of Chinese overseas investment has picked up recently but some attempts failed, such as Chinalco's bid for Australia's Rio Tinto.

Economy

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Income rise key to stimulating economy

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