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Chinese Vice Premier Li Keqiang’s Article on Boosting Domestic Demand

On February 16, Li Keqiang, China’s Vice Premier, who is discussed as the likely successor to Wen Jiabao as Premier, published a feature article in the Chinese Communist Party’s flagship publication Qiushi Journal. The article elaborates on China’s 2012 national economic strategy with a focus on boosting domestic demand by urbanization.

Li points to three “structural problems” in the Chinese economy: First, a slowdown in the drive for economic growth. “While the external demand declines, factors restricting the growth of domestic demand are also increasing. It is difficult for people’s income to maintain a rapid growth and Chinese enterprises’ ability and willingness to invest has waned. There are many obstacles to expanding private investment.” Second, there are many factors that drive up prices. “They include the upward pressure on production costs caused by labor, land, energy resources, and other production factors; the impact of inflation on the importation of bulk commodities in the international market, as well as the effect of the deepened price reform of raw materials.” Third, the problem of unbalanced, uncoordinated and unsustainable development is still prominent.

Source: Qiushi, February 16, 2012