Consumption to be China's 2012 growth driver: report

Beijing: Consumption will overtake investment as China’s biggest driver of economic growth in 2012 for the first time in more than a decade, the Ministry of Commerce’s research institute said in a report.

Consumption was last the No 1 growth engine in 2001, when it contributed 50.2 percent of country’s gross domestic product, slightly exceeding 49.9 percent from investment.

The Commerce Ministry institute estimated that China’s consumption would grow 15 percent this year as a jump in household income and easing inflation stimulate spending, the Economic Information Daily, run by the official Xinhua news agency, reported on Thursday.

“The 15 percent level is not a policy target, but achievable growth we get using our economic model and combining various factors,” the newspaper quoted Zhao Ping, the main author of the research report.

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Premier Wen Jiabao told the rubber-stamp parliamentary meeting on March 5 that the focus of government’s job this year was to expand domestic consumption.

To that end, the Commerce Ministry’s report said China would issue new policies to encourage spending on home furnishing, services, products that save energy and protect the environment, as well as goods that are labeled as China’s own brands.

Reuters