First, the land transfer revenues should not be included in investment because it is not an increase of national wealth. According to the Ministry of Land and Resources, the government collected 556 billion yuan in 2004 and 589 billion yuan in 2005 from land transfers, and although 2006 figures have not yet been released, it has been conservatively estimated at 650 billion yuan. If this is then deducted from the total GDP, fixed assets investment will be revised to 6.44 trillion yuan for 2004, 8.27 trillion yuan for 2005 and 7.28 trillion yuan for 2006, up 17.7, 17.3 and 16.3 percent, respectively.

The next major contention is the expenses on renting houses. Urbanites who cannot afford houses or migrant workers from rural areas moving into big cities are consumers who fall into this category. Considering China's high private ownership of housing property in urban areas, estimated at 83 percent, it means 17 percent of urban residents have to rent houses. Assuming that half of them (approximately 4.93 million) go to the rental market and that each person spends 140 yuan per month, annual combined expenditure will mount to 83 billion yuan. In addition, a survey held by the National Bureau of Statistics showed that no less than 200 million migrants are moving to urban areas. If each of them spends 70 yuan on average on renting every month, and if they are seasonally employed five months of a year, the nationwide total of renting costs would amount to 70 billion yuan. In addition to the previous 83 billion yuan, present Chinese inhabitants spend at least 153 billion yuan on renting houses every year.

Therefore, China's domestic consumption should be leveled up to 5.87 trillion yuan in 2004, 6.87 trillion yuan in 2005 and 7.04 trillion yuan in the first 11 months of 2006, respectively, up 15.4, 15.4 and 16.1 percent year on year. An increase of at least 3 percentage points on consumption, along with massive demands on medical care and retirement pension costs, means the conclusion of China's low consumption is baseless.

In fact, China's booming property market alone is convincing enough to indicate that China has both healthy investment and strong domestic demand. China needs at least another 10-15 years for sustained investment growth.