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Economists Comment on China
Special> 2010 in Retrospect> Economists Comment on China
UPDATED: January 5, 2011 Web Exclusive
Liu Shijin:
Consumption has changed from being policy-driven to being market-driven


Liu Shijin, Deputy Director of the Development Research Center under the State Council 

The Blue Book report showed that China's total investments in 2010 would increase by 23.5 percent, with urban investment increasing by 24 percent and rural investment increasing by 21 percent. China's economy is largely driven by consumption, but there is also an increasing reliance on investment.

Consumption increases in 2010 have changed from being policy-driven to market-driven. In countering the global financial crisis, the Chinese Government created many policies to stimulate domestic consumption. Record sales of automobiles, household appliances and furniture resulted in a 16.9 percent increase in domestic consumption. However, the effect of the policies appeared to be decreased by the end of 2010; the increase of actual consumption has largely halted, but momentum remains strong.

Liu Shijin, Deputy Director of the Development Research Center under the State Council, pointed out that the increased amount of investment is a sign that the Chinese economy has successfully countered the negative effects of the global financial crisis and is back on a solid track. However, overall investments were slowed around the end of the year by decreases in real estate investing. China's high export figures have certainly been influenced by the slower recovery of the world's other large economies.


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