MOFCOM: China should further boost consumption

We are fast approaching the end of the year, and policymakers are releasing - and revising - their full-year growth forecasts. China's Minister of Commerce, Chen Deming, says the country is set to post annual GDP growth of 7.5 percent for 2012. He also expressed confidence in China's ability to reach its target of doubling GDP and income per capita by 2020.

Chinese Commerce Minister Chen Deming is bullish on China's economic growth not only for this year but also in the long run. He says the government will attain its 2020 goal of economic output and income per capita.

But Chen also says China should be watchful not to fall into the so-called middle-income trap.

Chen Deming said, "The trap means the GDP per capita is still increasing, salaries are rising. But the international competitiveness of the country is unchanged, or even weakens."

However, Chen also says the economic overcapacity will still remain a challenge over the next decade. He insists apart from investment, China also has to expand consumption.

Chen Deming said, "Official data shows a one-percentage-point rise in urbanization means 10 million migrant workers will move from rural areas to cities. Their annual consumption will increase by 10,000 yuan. We still have several hundred million farmers, which means there is huge space to boost consumption. "

The Central Leading Group on Finance and Economic Affairs predicts China's GDP will hit 100 trillion yuan, or 16 trillion US dollars, in 2020. That's close to the size of the United States'economy in 2012.