Chinese urged to spend, not save

BEIJING, March 20 (UPI) -- China needs to encourage its people to spend their money, not save, in order to strengthen the nation's economy, economic experts have told a forum in Beijing.

Ma Kai, head of the National Development and Reform Commission, told the China Development Forum on Sunday that the central government must focus on stimulating domestic consumption to drive the economy.

The China News Service reported Monday that investment in China rose to 44.8 percent of gross domestic product last year, from 36 percent in 2000, while consumption fell to 50.7 percent of GDP last year from 62 percent five years ago.

Wang Mengkui, head of the State Council's Development Research Center, told the forum that China faces four main limitations -- resources and the environment, regional imbalances, underdevelopment of a support system to help vulnerable social groups, and a fast-changing society with different interest groups -- but said these problems were inevitable with development.

Labor and social security minister Tian Chengping cautioned China to prepare for a rapidly ageing population. He said that over 10 percent of the 1.3 billion Chinese are now over 60 and that most of China's privately owned businesses and self-employed individuals are not covered by insurance.