Urbanization helps consumption

Given its convocation against the backdrop of complicated and uncertain economic conditions at home and abroad, this year's Central Economic Work Conference assumed added significance.

China's economy has performed better than expected despite the impact of an unprecedented global financial crisis in decades. To continue the fledging economic recovery, the highest-level annual economic conference, which outlines policies and measures for next year's economic development, vowed to push forward long-overdue economic restructuring and improve economic quality and efficiency, along with other measures. The conference also committed to steadying the advancement of urbanization as an important measure to boost domestic consumption, a concept put forward for the first time by top decision-makers. Urbanization, if pressed ahead with smoothly, would undoubtedly help the country convert its enormous consumption potential into a strong propulsive force for sustainable economic development.

Due to the existence of a long-standing dual economic structure, economic development in rural areas has lagged far behind urban areas. The country's demographic composition, in which the rural population accounts for a larger proportion, has been one of the largest obstacles to rapid consumption growth. Last year, the rural population stood at 720 million, or about 54.3 percent of the country's total. Given their lower incomes, conservative spending habits and the less-developed social security system, rural residents are reluctant to spend hard-earned money on items other than those that meet their basic needs. That, together with the sluggish urbanization process, has contributed to the failure to raise the ratio of consumption in the country's economic development.