Page last updated at 17:04 GMT, Thursday, 28 January 2010

Davos2010: China says domestic demand 'key'

Li Keqiang
Li Keqiang has been tipped as the next Chinese Premier

China's vice-premier, Li Keqiang, has told a forum at the World Economic Forum in Davos that domestic demand is key for China's economic growth.

Reflecting international concerns, he said China had been "excessively reliant on investment and export".

Mr Li pointed out that domestic spending improved in 2009, with sales of consumer goods up 15.5% last year.

He said the government had already taken successful steps to boost consumer demand.

For example, they had introduced a plan to subsidise home appliances, such as TVs and fridges, for farmers which had encouraged spending.

Mr Li, who is tipped to replace China's premier Wen Jiabao, also said it was vital to raise the living standards of poorer rural communities.

China's economy has grown rapidly but the development has been uneven across the country - with jobs concentrated in the coastal regions.

Nearly 10 million people move from countryside to cities every year, according to Mr Li. He said income in the central and western areas was still very low.

Other countries are keen for China to start importing foreign-made goods in order to help the broader global economic recovery.

No mention was made of its own currency, the renminbi, however. China has come under international pressure to revalue because it is felt to be artificially low, disadvantaging competitors.

"Everyone wants China to play by global rules, rather than go its own way - and revalue its currency as a first step", said the BBC's Economics editor Stephanie Flanders. "But in their public remarks today, Chinese officials gave little indication of wanting to play ball."

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