Economy

China urged to boost consumer spending

(Agencies)
Updated: 2010-09-20 11:02

China needs to increase consumer spending to sustain momentum in a global economic environment that is growing more challenging, Bloomberg reported Monday, quoting an adviser to China's central bank.

China's economy retains strong growth potential, even as the international situation grows more complicated after the global financial crisis, Bloomberg reported, quoting Li Daokui, who was appointed in March as one of three academic advisers to the People's Bank of China.

China faces swelling trade protectionism against export goods, Li told an audience of corporate leaders at a financial forum on Sunday in Beijing, according to the report.

The country had previously studied a growth model for increasing domestic consumption, but the issue took on greater urgency two years ago during the global slump when demand for Chinese goods suffered a downturn.

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China plans to include boosting consumer spending as a priority in its 12th Five-Year Plan (2011-2015). The Chinese government also has announced efforts to expand imports.

One Chinese trade delegation, comprising almost 50 business leaders, left Beijing for the US on Sept 14. Chinese trade delegations are expected to help strengthen economic ties between the two countries.

According to the National Bureau of Statistics, China's industrial output in August surged 13.9 percent from a year earlier, higher than previously estimated.

Outside pressure to appreciate the yuan is just starting, Li said in his speech.

The yuan strengthened 0.68 percent to 6.7235 per dollar last week in Shanghai, with gains totaling 1.5 percent since a two-year peg ended in June, according to the Foreign Exchange Trading System.

The Ministry of Commerce believes that a few US politicians blame China's trade and currency policies as a political gambit to win the upcoming US midterm elections.

The US congressional elections will be held in November. With a high unemployment rate and slow economic recovery, some politicians have blamed China and its currency policies as a means to win votes.