| China Will Rely On Domestic Demand For Economic Growth, Says Zeng
| Five-year plan seeks to double GDP
25 January 2006 - Davos, Switzerland
China said today it will rely on domestic demand to fuel economic growth for the next five years while developing the country’s natural resources in an environmentally sustainable manner.
In a special address at the World Economic Forum Annual Meeting 2006, Zeng Peiyan, Vice-Premier of the People’s Republic of China, outlined a five-year economic masterplan based on further market opening, structural reforms, sustainable development and international cooperation.
To allay concerns in some quarters that the country is too dependent on exports for growth, he noted that domestic consumption has already taken off in a big way – evident in the surge in telephone subscriptions and in power generation.
The rise in domestic demand will in turn support a rise in domestic investments in a range of industries. China’s high savings rate of 40%, its labour force of 800 million people and considerable natural resources augur well for such a development.
But Zeng quickly assured his audience that the expected surge in consumption will not put a strain on energy prices or domestic supplies. “China is not only a major energy consumer, it is also a major energy producer,” he said, pointing out that the country can meet over 90% of its energy needs on its own resources.
The Vice-Premier also revealed that China’s 2006-2010 economic blueprint calls for a doubling of GDP and per capita income. While the Chinese economy has grown an average of 9.6% in the past 27 years, reaching a GDP of US$ 2.2 trillion last year, its per capita income at US$ 1,000 is still below those of the top 100 countries.
Zeng said that in mapping out its development plans, China’s policy planners seek a comprehensive and coordinated approach that will give priorities, among others, to the less developed central and western parts of the country, to revitalizing old industries in the north-east, to modernizing agriculture practices and reducing the gap between the urban rich and the rural poor.
The development plans will also stress the conservation of resources and the reduction of emissions of greenhouse gases.
In his speech, Zeng also announced that Beijing has approved the World Economic Forum’s application to open an office in Beijing.
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