Wen Jiabao

NPC to focus on spurring domestic spending

PUBLISHED : Tuesday, 24 February, 2009, 12:00am
UPDATED : Tuesday, 24 February, 2009, 12:00am

President Hu Jintao has set the tone for next week's annual meeting of the National People's Congress where the country's political elite will gather to discuss policy, saying that the government must focus on 'spurring domestic consumption' to offset the sharp fall in exports.

A Politburo meeting, presided over by Mr Hu, also asked the State Council to increase infrastructure investment, build a better social safety net, improve living standards and secure a reasonable level of growth, China Central Television's evening news bulletin said.

The meeting effectively outlined the main elements in the work report which Premier Wen Jiabao would deliver to the NPC next week.

Political advisers from around the country will gather in Beijing on March 3 for the annual session of the Chinese People's Political Consultative Conference, followed two days later by top lawmakers for the start of the NPC's annual meeting. While the NPC lacks independence and real power, its annual meeting is still an important occasion during which state leaders wheel out important measures and build consensus for major political objectives.

Mr Hu's speech yesterday showed that the economy and social stability would be the overriding themes at this year's NPC meeting.

On March 5, the NPC will review Mr Wen's government report, before voting on it on the meeting's final day.

The Politburo meeting briefly mentioned all the State Council's achievements last year and then described this year as the 'most difficult' in terms of economic development. It called on the cabinet to take all necessary measures to secure 'stable and relatively fast economic development'.

'To get the job done, we must stick strictly to the key issues of spurring domestic consumption and securing growth,' the meeting said, according to the CCTV report.

Foreign trade, fixed investment and consumption have been the tripod supporting the mainland's gross domestic product growth, but with developed economies falling deeper into recession since late last year, mainland exports have declined sharply since November.

The central government introduced a 4 trillion yuan (HK$4.5 trillion) stimulus package late last year, which includes huge government investment in infrastructure, to keep mainland economic growth above 8 per cent.

Renmin University economics professor Zhao Xijun said it was rather unusual to bet the country's economy on a few policies such as spurring domestic consumption, but a clear government policy guideline was exactly what the nation needed.

'Unusual times call for unusual policies,' he said. 'China's policy, to rely primarily upon its own market to maintain economic growth, will help dispel clouds over the market and provide a clear direction.'