DAVOS, Switzerland — China will focus on boosting domestic demand to drive economic growth, Li Keqiang, vice premier of the powerful state council, said Thursday.
“China’s domestic market has huge potential,” Li told business and political leaders at the annual World Economic Forum here. “We will strive to expand domestic demand, especially consumer demand.” Growing domestic demand has played “a critical role” in the quick economic rebound of the world’s biggest and most dynamic emerging market, he said.
Total sales of consumer goods rose 15.5 percent last year, Li said, noting domestic demand helped make up for fewer exports and helped the economy to grow 8.7 percent.
The International Monetary Fund this week estimated China’s economy would expand 10 percent this year.
Turning to trade, the vice premier said imports totaled $1 trillion last year, making China the world’s second largest importer after the U.S.
“With an increase of $380 billion in GDP [gross domestic product], China’s contribution to world economic recovery is obvious. We are well positioned to achieve long-term, fast and steady economic growth,” he said.
Li said there is a need to promote more open markets and warned that trade protectionism “will only exacerbate the economic crisis, slow down the recovery process and ultimately harm the interests of the very countries who apply such measures.”
He also argued there was a need to reform international financial institutions and tighten regulations.
“Accountability and discipline on the part of the global reserve currency issuers should be strengthened,” Li said.
China, which holds $2.4 trillion in foreign exchange reserves, much of it in dollars, has been increasingly critical of U.S. fiscal and monetary policies as a key cause for much of the volatility and uncertainty in global foreign exchange markets. China, along with France and other major economies, has advocated finding an alternative to the dollar as the world’s dominant reserve currency.