On the backs of its consumers

Greater efforts to change the way China invests are vital to stimulate growth in its service sectors

During the next 10 years, China's economic growth will depend largely on whether the huge consumer potential of its 1.3 billion citizens is fully utilized, and whether it can transform its development model from one being driven by investment and export to one driven by consumption. So the fundamental question is whether China is entering a new era of a consumer society.

I believe the answer is yes, if the necessary market reforms are implemented. First, the demand for necessities - food, clothing and shelter - is falling and the demand for goods and services for human development - education, healthcare, communications, etc - is growing. The mainstay of urban residents' consumption is changing from industrial products to services, and they will be in the majority by 2020. Meanwhile, rural residents' consumption is changing from daily necessities to industrial products.