(Yicai Global) Dec. 15 -- Spurring domestic demand and stabilizing consumption are key issues for China, experts said after guidelines for expanding demand were released yesterday.

China aims to boost consumption, optimize the distribution pattern, bolster the quality of supply, improve the market system and smoothen economic circulation during the 14th Five-Year Plan period through 2025, according to the guidelines jointly issued by the Communist Party of China Central Committee and the State Council.

The strategy to expand domestic demand is a natural choice for China to cope with the challenges of the complex global environment, Zhou Maohua, a macroeconomic analyst at China Everbright Bank, told Yicai Global.

It can also provide a basis for promoting the stable and healthy development of the Chinese economy, as well as supporting an efficient economic cycle and aiding people’s aspirations for a better life, Zhou said.

Issuing the guidelines at this point will help further strengthen domestic demand and boost the economy next year, while also restoring market confidence in the economic recovery, said Wang Qing, chief macroeconomic analyst at Golden Credit Rating.

Stabilizing consumption is an urgent requirement for China’s economic policy, said Teng Tai, director of the WANB Institute. Only by fully realizing the importance of consumption and making efforts involving income and interest rates can China’s economy quickly bottom out and start a new round of growth, Teng noted.

The guidelines also include arrangements for investment and infrastructure construction. They encourage investment in new infrastructure construction, high-end manufacturing and services, and social sectors including education and healthcare, Wang said. China needs to deepen the reform of investment and financing mechanisms, while allowing more private firms to join in infrastructure construction.

Investing mainly in infrastructure construction and property development as was done in the past does not meet the country’s actual needs, said Liu Shijin, former deputy director of the Development Research Center of the State Council. It is often inefficient and can lead to misallocation of resources, which can result in underinvestment in more vital areas such as human capital, Liu warned.

Editor: Tom Litting