CRI听力:Boosting Domestic Demand, a Challenge to Meet the Challenge

At a heated group discussion during the ongoing annual session of the Chinese People's Political Consultative Conference, CPPCC, Dong Wenbiao, board Chairman of the China Minsheng Bank, voiced concerns related to the efforts in boosting domestic demand.

"The property market used to support a strong industrial chain, but at present the sales of houses are restricted. The automobile industry used to enjoy fast growth, but now license plates are restricted. Now the central government wants to boost domestic demand; but where is the demand? I'm in the banking industry and I don't even know where the demand is; and the ordinary people certainly don't know. Where is the demand? What is in demand? And how do we boost domestic demand?"

China has enjoyed decades of fast economic development that heavily relied upon exports and investment. But as the main markets in Europe dip into recession and as the United States struggles to recover, China is attempting to shift its focus and look for new engines of domestic growth.

Former vice Minister of Commerce, Ma Xiuhong believes that given the current circumstances, the key to effectively boosting domestic demand lies in stimulating consumer spending.

"In dealing with the financial crisis, we implemented policies to promote home appliances in rural areas and trade-in schemes, but now these temporary measures for boosting consumption are set to expire soon. In order to fundamentally boost consumption, the proportion of the people's income as part of the total national income needs to be raised."

An official with the Ministry of Commerce explained that the expiration of temporary measures does not mean the end of such a policy. He said government departments are working on new methods aimed at encouraging consumption.

But economist Li Yining questioned if those stimulating measures will effectively work with the ordinary people, since, as he said, the majority of people are low-income earners, and they are nervous about their financial capabilities.

"The most fundamental way to boost domestic demand is to raise the income of low-income earners and dismiss their concerns. At the moment, this group dare not spend their money because they are worried about what if I get sick? How can I afford my child's education if I spend my money now? Who is going to take care of me when I'm old?"

Meanwhile, some analysts warn that the level of inflation of the inadequacy of social safety net pose a stumbling block hindering people's ability and willingness to spend. Latest figures by the National Bureau of Statistics show that the Consumer Price Index, CPI, for February fell to 3.5%, representing a 20 month low.

Responding to comments from CPPCC members, vice director of the National Development and Reform Commission, Peng Sen, revealed that the country's top economic regulatory body is launching new measures to lower costs throughout the circulation sector which will hopefully help improve the environment for consumers.

For CRI, this is Ding Lulu.