China opts for shift in economic policy

In a major shift in its three-decades-old economic policy, which focussed on investment and export-led growth, Chinese leaders have called for efforts to improve efficiencies and encourage consumer spending.

The National People's Congress, the annual legislative session held over the weekend, saw leaders talks of raising income levels of the less affluent and taming inflation. Wen Jiabao, the Chinese prime minister, pointedly made references to issues such as inflation, which threatened both social stability and economic growth.

The government unveiled the economic plans for 2011 and for the five-year period ending 2015, promising to raise income levels and bringing them at par with growth levels, something that has not happened over the past five years.

''In the past five-year plan, it was absolutely necessary to prioritise maintaining growth,'' Zhang Ping, head of the National Development and Reform Commission, said at a news briefing. ''Now we want to put more emphasis on ensuring and improving people's livelihood. So in the next five-year plan period, we will focus on improving people's livelihood.''

The government would also focus on the establishment of a long-term mechanism to boost domestic demand, he added.

Prime minister Wen also promised to eradicate poverty by 2020 and to raise the poverty line of $182 per person a year. The government would encourage consumer spending, even providing subsidies to the rural poor to buy home appliances, he added.