Spending time for growth

Due to historical reasons, the country's increased input into basic public services in recent years still fails to meet people's ever-growing demand in this area. This is one of the reasons for the protracted slack consumption among urban and rural residents.

Some effective measures should also be taken to upgrade the country's current consumption structure, a move that demands the country adjust its economic structure and speed up the development of some service industries. A series of food safety problems that have occurred in recent years have had directly undermined public confidence in the domestic food industry.

The occurrence of such food safety scandals can be attributed partly to the lack of self-discipline in domestic food producers, but more importantly, to the absence of an effective and omnipresent monitoring mechanism by relevant State departments.

To boost long-sluggish domestic consumption, the country should also reform income distribution. A more reasonable and scientific income distribution system will stimulate domestic consumption. Practical measures should also be taken to gradually promote the balanced distribution of public services between urban and rural areas, given that it would not only help raise people's inclination to consume but also defuse brewing social contradictions.

To facilitate this process, the country should explicitly demarcate boundaries of responsibilities between central and local governments in the construction of public services and continue to increase input. In addition, measures should be taken to incorporate migrant workers as urban residents and the government should come up with effective ways to achieve this during the 12th Five-Year Plan period.

The construction of the long-sluggish housing guarantee system in urban areas should also be expedited. The government has promised that government-subsidized houses will comprise about 20 percent of the nation's housing by the end of the five-year plan period for urban residents, and the target, if realized will help improve people's livelihoods, maintain social stability and drive domestic demand to expedite the transformation of the economic development.

The author is director of the Hainan-based China Institute for Reform and Development.

(China Daily 05/20/2011 page8)