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Anti-China protectionism could rise in the West

0 CommentsPrint E-mail Xinhua, January 21, 2010
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"I worry that politicians both Democratic and Republican alike will take their frustrations on China. This is of course a huge mistake," he said.

Roach said that China's economy registered stronger growth than any other major economies in the world in 2009, but the growth is not sustainable as it is mainly stimulated by investment.

To sustain growth, China should focus on domestic private consumption market with 1.3 billion people, he said.

First, the government should fund the social safety net, including social security, medical insurance, private pensions and unemployment insurance, he said.

"Only then, will Chinese families reduce excess of fear-driven precautionary saving," he said.

Secondly, the government need to provide far more aggressive support to rural incomes, as 800 million people live in rural areas, he said.

Thirdly, China should improve service sector, which now accounts for only 40 percent of the country's GDP, much smaller than in any other major economies.

The chairman said that it is encouraging that in China's next five-year program, the country will change its development mode by focusing on domestic consumption market.

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