China's ruling Communist Party on Sunday said it would seek to expand its massive internal market to counter the global economic slowdown that has reduced international demand for Chinese goods.
The party, led by President Hu Jintao, released a statement at the end of a four-day meeting of its Central Committee where it also approved a plan aimed at doubling rural incomes by 2020.
“We should step up efforts to boost domestic demand, particularly domestic consumption and keep the economy, the financial sector and the capital market stable,” the party said in a statement released through the official Xinhua News Agency.
The party also recognized inherent “contradictions and problems” with China's economy and said all members should prepare for greater challenges as the global financial crisis unfolds.
China faces difficulties from high energy costs and inflation, but officials say the country has growth potential despite global uncertainties because of its large labor pool, vast domestic market and the increasing competitiveness of its companies.
Economists have cut China's growth forecasts to as low as 9 percent for the year, down from last year's 11.9 percent. That would be the highest rate for any major country, but Communist leaders want to keep growth robust to reduce poverty and avoid job losses, which could fuel political tensions.
China lowered interest rates Wednesday in an effort to revive slowing economic growth and help struggling exporters.
The party said it aims to double the income of the country's farmers – currently around $590 per person a year – over 12 years to ease the growing and politically explosive gulf between the urban elite, who have benefited most from China's two-decade-old economic boom, and its vast poor majority.
The move also seeks to boost rural consumption levels by a “big margin” and eliminate poverty in the countryside by 2020, Xinhua said. China has an estimated 15 million people living in absolute poverty in the countryside.
State media reports ahead of the meeting said the committee would review an amendment to give 750 million rural dwellers more freedom to lease or transfer their land, but the final statement did not mention the issue.
Chinese economists hope the agricultural reforms will lead to larger, more efficient farms that are better able to meet the demands of the evolving economy while maintaining the country's self-sufficiency.