China Aims High, Doubles Its GDP, Incomes in 10 Years

China has set a goal of doubling its 2010 economic output and people's per capita income by 2020, President Hu Jintao said in his keynote speech Thursday at a once-in-five-years National Congress of the Party.

That means China will reach a moderately prosperous society with a gross domestic product of nearly 80 trillion yuan (US$12.8 trillion) by 2020, while Chinese urban residents' annual income should top 40,000 yuan and rural dwellers, 12,000 yuan.

Boosting domestic demand and pushing forward economic reform will take a more prominent role leading up to that goal.

About 13 percent of China's 1.3 billion people still live on less than US$1.25 per day, according to the United Nations Development Program. Last year, the per capita disposal income for Chinese urbanites rose 14.1 percent over 2010 to 21,810 yuan. The figure for rural residents rose by 17.9 percent to 6,977 yuan.

"China is still within a strategic development period that allows the country to aim high," Hu, who is also the general secretary the Party, told about 2,300 delegates attending the opening of the national congress. "We must have a proper judgment of the period to grab the opportunities and to win the future."

Hu said development is the key to address all the problems in China, and the country should further improve its socialist market economy and accelerate economic restructuring.

"We should firmly maintain the strategic focus of boosting domestic demand, speed up the establishment of a long-term mechanism for increasing consumer demand, unleash the potential of individual consumption, increase investment at a proper pace, and expand the domestic market," Hu said.

"Efforts should be made on improving the demand mix, optimizing the industrial structure, promoting balanced development between regions and advancing urbanization," the president said.

He also urged authorities to foster strategic emerging industries and promote a quicker expansion of the advanced manufacturing sector.

China should enact reforms to make its currency and interest rates more market-based, boost overseas investments and channel more state funds into industries as part of plans to keep economic growth on track to double economic output by 2020, Hu said.

Hu said that the Party will intensify efforts to improve the basic public service system and ensure that all the people enjoy their rights to education, employment, medical and old-age care, and housing.

"We should bring as much benefit as possible to the people, resolve as many difficulties as possible for them, and solve the most pressing and real problems of the greatest concern to them," Hu said.

Commenting on the economic implication of Hu's speech, Australia & New Zealand Banking Group Ltd economist Louis Lam said the announced growth target is expressed in real terms and is reasonable because it implies an average growth rate of only 7 percent in the following years.

"We believe this target is achievable. Since the Chinese economy outperformed (projections) in 2011, the growth required over the next eight years will be less demanding. By 2020, China should become a country with GDP per capita of US$9,500," Lam said, valued at current price levels and exchange rates.

To ensure that the people share in the fruits of development, Hu said the Party must deepen reform of the income distribution system.

"We should raise the share of individual income in the distribution of national income and increase the share of work remuneration in primary distribution," the president said.