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December 16, 2012

China's new leadership indicates they will make faster reforms to boost domestic consumption

Beijing's leadership say they want to boost imports and speed the integration of rural migrants into cities as ways to boost domestic consumption, according to reports in China's state-owned news agency, Xinhua. China needed to show "more courage to reform," the statement said.



The conference was chaired by the incoming premier, Li Keqiang, and focused on one of Mr. Li's top economic priorities, urbanization, which the group's statement called an "historic task" and "the biggest potential driver of domestic demand." Rural migrants can earn far more money working in China's cities than they can in their home villages, giving them a lot more cash to spend.

China's State Council, the government's top body, now is looking at a land reform plan that would increase the payments to farmers whose land is seized by local governments and later used in real-estate development. Such payments would make it easier for farmers to move to China's cities. China's population became more than 50% urban last year.

The work conference set out a policy agenda, but didn't fill in specifics, such as a target for either growth or inflation in 2013. Those specifics will be revealed in March 2013 as Mr. Li formally takes his new government position and new Communist Party chief Xi Jinping becomes China's president.

SOURCE- Wall Street Journal

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