China stresses boosting consumption, investing in public sector

BEIJING -- China aims to boost domestic demand through raising incomes and spending more on infrastructure related to public welfare, a top economic official said Wednesday.

Expanding domestic demand will remain China's long-term strategy for economic development, said Zhang Ping, head of the National Development and Reform Commission (NDRC), at a press conference held on the sidelines of China's ongoing legislative session.

China will stimulate domestic consumption and improve the efficiency of government investment in order to expand demand, Zhang said.

Consumption has played an increasingly important part in economic growth. In 2012, consumption contributed 51.8 percent to the country's GDP growth, overtaking the 50.4-percent contributed by investment.

"We should increase people's ability to consume by raising their incomes," he said.

In cities, the government will work to create more jobs and boost salaries in a way that won't damage enterprises' efficiency, Zhang said.

In rural areas, the government will raise the state purchase price of farm produce this year and make it easier for rural residents to work in cities.

More public spending on education, social security and health care will reduce the need to maintain large savings accounts and increase people's will to spend, Zhang said.

China's central budget for 2013 features notable spending increases in areas closely related to quality of life, including education, health care, social security and public housing.

Despite lingering concerns regarding an investment-driven growth model, Zhang stressed that China still needs to spend more on infrastructure.

"The key is to choose the right direction," he said.

The government will focus on infrastructure that benefits people's lives, such as public housing, hospitals, schools and the renovation of dilapidated houses in rural areas, according to Zhang.

More government money will go to irrigation facilities, rural roads, power and water supplies in rural areas, as well as utilities in cities, he said.

In underdeveloped west China, the government will continue to build highways, railways and airports, he added.

In a government work report submitted to the legislative session, Premier Wen Jiabao said the government must further relax controls over market access for non-governmental investment, as well as stimulate the sector.