"It is a right direction to boost domestic demand now," Yan Chengzhong, head of the economic development and cooperation research institute with the Shanghai-based Donghua University told Xinhua.

"We have to count on domestic demand and investment to make up for hard-hit export to spur growth," said Yan, a deputy to the NPC session.

China has announced several aggressive measures to bolster domestic demand and increase investment, including a 4-trillion-yuan stimulus package and a plan to expand rural consumption of home appliances with 40 billion yuan in subsidy to rural buyers and support plans for key industries.

More detailed measures are stated in Wen's government work report, such as accelerating development of markets for second-hand cars and car rental, encouraging retailers to open stores in more townships and villages, and allocating 43 billion yuan in subsidies for building low-rent housing.

Wen said the government would also make efforts to expand people's consumption in culture, recreation, tourism and new areas such as the Internet and animation.

The Premier said the country would increase spending on social programs including pension, medical reform and education in 2009.

Such endeavors would help leash the country's potential in consumer spending, as economists had long held that people tend to clutch their purses tightly for unexpected disease, a laid-off, or old-age in China due to lack of health insurance and social security.

Li Yining said before the annual session the country needed to enhance agricultural productivity so as to increase farmers' income, in addition to putting both rural and urban residents under the umbrella of the social security network, before the domestic demand could take off.

His comment was answered in the Premier's report. Wen said the central government would spend on agriculture, farmers and the rural areas a total 716.1 billion yuan, a year-on-year increase of 120.6 billion yuan, among other measures to boost farmers' income.

The country's efforts to stimulate the economy has led the government to set a fiscal deficit budget of 950 billion yuan (139 billion U.S. dollars) for 2009, a record high in six decades.

"This is the most active, direct and efficient way we can expand domestic demand," Wen told nearly 3,000 lawmakers at the Great Hall of the People in downtown Beijing.

(Xinhua News Agency March 5, 2009)