But several obstacles are hindering citizens' willingness to spend money. The stock market plunge devoured a huge portion of investors' income. Home prices have been hovering above the purchasing power of average breadwinners.

Government to the rescue

Sensing the economic tension, the government has made timely readjustments to its macro-control policies.

"This year is the most difficult for economic growth in recent years," Chinese Premier Wen Jiabao said at a State Council meeting on October 17. He added that the government would "take all means to ensure relatively fast and stable growth" and control inflation.

Experts said the government's single most important policy goal is growth and that it would rapidly roll out a package of policies to achieve it.

Wen also said in his speech that the government would drop the concept of "stringent monetary policy," which indicated it would loosen control over credit.

In discussing fourth quarter economic performance, Wen proposed making flexible and prudent macro-control policies, and said the government would soon enact favorable fiscal, taxation, credit and foreign trade policies to maintain stable economic growth. He also said the government would increase its expenditures and encourage banks to provide financing for small and medium-sized companies.

Immediately after the State Council meeting, the government issued a series of policies to boost the economy. It announced that as of November 1, it would raise export tax rebates for one fourth of its total exported goods and slash the property transaction tax rate for people buying a first home smaller than 90 square meters, as well as abandon the stamp tax and land value-added tax for home purchases.

Economists said China's policy changes could prevent a big global economic slowdown even though some major economies would experience recessions next year.