03/18/2003
China Daily

The 10th National Committee of the Chinese People's Political Consultative Conference (CPPCC), the country's top advisory body, concluded its annual session on Friday, while the 10th National People's Congress (NPC), the country's top legislature, comes to a close today. The following are excerpts of speeches by NPC deputies and CPPCC members on how to stimulate domestic demand.

Lu Zhiqiang (CPPCC member): Domestic demand will not only drive the country's further economic growth, but also serve as a major engine to improve China's industrialization over the next two decades.

As a matter of fact, domestic demand in China is on the rise as people grow accustomed to current policies and begin to spend.

The freeing-up of the market since 2002 has produced new hot-spots in consumption, in areas such as automobiles, real estate and telecommunication utilities.

As the economic reform is carried forward, the environment for investment and consumption will improve and in turn stimulate the growth of private investment.

Lin Yifu (CPPCC member): Domestic demand in China has remarkable growth potential because a large percentage of the long-existing demand has, for a variety of reasons, not been satisfied.

Since the Chinese economy is undergoing a major transition, there are many obstacles in the way of satisfying investment and consumption demand in the economic system or structure. To stimulate domestic demand, the obstacles must be removed to give more room to meet the unsatisfied demands in the following fields.

First, foreign investment is now allowed in many fields which had previously been forbidden prior to China's becoming a member of the World Trade Organization. Foreign investment will continue to rise as the Chinese Government lives up to its promises upon accession to the WTO.

Second, the private sector was subject to discriminatory policies during the last two decades despite its rapid development. Once the government affords the same treatment to domestic private investors as their foreign counterparts, investment by the private sector will rise.

Third, although loans have been gaining popularity with domestic consumers in recent years, domestic banks are not properly equipped to meet their customers needs or demands. Fourth, consumption in the rural market remains untapped.

Li Wuwei (NPC deputy): Stimulating domestic demand offers a solution to current economic problems through development.

It becomes a matter of urgency to encourage consumption against the backdrop that exports in 2003 may probably see a lower growth than 2002.

To encourage greater consumer confidence about the future and willingness to spend now, it is essential to further improve the social security system and protect consumers against potential risks.

The proactive fiscal policy has been effective in promoting investment. The government should lower the market threshold, cut randomly levied fees and attract more private investors into the market.

Qiu Xiaohua (CPPCC member): In 2002, domestic demand made remarkable progress. Consumption also maintained its strong growth momentum, while many consumers developed a greater interest in car ownership, real estate, tourism and education. The vibrancy of domestic demand should be attributed first to the proactive fiscal policy, which created new conditions for growth in demand.

The second fillip to domestic demand are the opportunities produced by economic reform, which adds vigour to the self-driven mechanism of the market. This provides domestic demand with a more solid base.