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China’s economy Fueled by Domestic Demand and Foreign trade in 2012
China?s economy Fueled by Domestic Demand and Foreign trade in 2012
IN 2012, the effects of the world financial crisis are still lingering. China?s economic rise continues to draw worldwide attention; and the appreciation of the RMB, the country?s large stockpiles of foreign reserves and its export strength are all perennial topics of debate among media commentators. With many countries around the world still negotiating the rapids of economic recovery, will China avoid the tumult and chart its own smooth course of growth over the next couple of years?
Domestic Demand Drives Growth
“The Chinese government pursued domestic demand-boosting policies as early as 1997 during the Asian financial crisis,”said Liu He, deputy director of China?s Central Leadership Office of Financial and Economic Affairs. “During the crisis, a large amount of capital flight took place from China to the U.S. While domestic demand-boosting policies were pursued to some success, the desire to attract foreign investment and ride the globalization wave meant that over the coming years, less attention was paid to domestic demand. As the global financial crisis was breaking out in 2008, international demand shrunk, and China was forced to focus on boosting domestic demand again,”Liu explains.
At the Fifth Session of 11th National People?s Congress (NPC) which opened on March 5, Premier Wen Jiabao said in a government work report that expanding domestic demand, particularly consumer demand, is essential to ensuring China?s steady and robust economic development for the long term, and is the priority of government work this year.
Jia Kang, a member of the CPPCC and director of the Research Institute for Fis- cal Science at the Ministry of Finance, pointed out: “While China has opened up its economy by relying heavily on foreign markets, the global financial crisis has taught us that we must pay more attention to expanding domestic demands, no matter what stage of the economic cycle w
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