China stresses domestic consumption

Addressing the Davos World Economic Forum, Li, seen as China's likely next prime minister, said while China had come out of the world financial crisis, the downturn's impact has not fully ended.

China, whose huge exports and trade surpluses are credited with boosting its economy, is poised to edge out Japan as the world's second largest economy behind the United States. The Communist country maintained strong growth even during the financial crisis.

"As we stand at a historic juncture, we must change the old way of inefficient growth and transform the current development model that is excessively reliant on investment and exports," Li said, The New York Times reported. "We will focus on boosting domestic demand.

"The growth in domestic consumption in China will not only drive growth in China but also provide greater markets for the world," Li said.

Li is expected to succeed Wen Jiabao in 2012 as premier, the second most powerful job in China after the president, the report said.

In his speech, Li was quoted as saying China would continue with pro-market changes and bring in more competition, noting the country would "allow the market to play a primary role in allocation of resources."

On the currency question, Li said China's trade surplus plunged by $100 billion in 2008 and his government is taking steps to boost imports, the Times of London reported.

"Trade protectionist policies will exacerbate the current crisis and ultimately they will hurt the interests of those that practice them," he said.

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