China's domestic consumption will grow by 11.7 percent in 2006 as the country has laid out a batch of measures to boost farmers' and urban low-income group's earnings, said experts in Beijing.

 

The growth will be 0.2 percentage points higher compared with the expected consumption increase this year, the Economic Information Daily quoted Qi Jingmei, an expert with the State Information Center as saying.

 

China is striving to maintain fast economic growth while shifting to domestic driving forces, especially consumption, in order to reduce the heavy reliance on exports.

 

Qi said a demand-led model is stressed in the guiding proposal for the 2006-2010 period which was passed earlier this month, and this would have a direct effect on consumption growth next year.

 

Chinese farmers' income will rise six percent this year, said Qi, citing the good harvest across the country. Following last year's 6.8 percent income increase, the continuing growth will make Chinese farmers more willing to spend.

 

In the cities, Qi said the lift-up of the minimum wage for lay-offs this year will increase their spending power and more measures are expected in 2006.

 

Qi also said the government move to raise the threshold of the personal income tax will improve the income of ordinary citizens.

 

According to a proposal, China will lift the threshold from 800 yuan (US$98.8) to 1,500 yuan (US$185) or higher soon.

 

Despite the stimulating efforts, Qi said the rising oil prices may dent people's consumption and the slowdown of the property market is not likely to take off next year.

 

(Xinhua News Agency October 25, 2005)