PICKING UP GROWTH: A worker at Taiyuan Iron and Steel (Group) Co. Ltd. hoists stainless steel rolls. The group sees growth despite the industry being hit hard (YAN YAN)

A structural tax reduction will become a major component of China's fiscal policy in 2013, said Liu. Currently, China is carrying out an experiment transforming the business tax to a value-added tax, which could have a marked effect on reducing the tax burdens on companies. This is a significant step forward in improving the country's tax system, said Liu.

Yuan Gangming, a researcher with the Institute of Economics at the CASS, predicted that in 2013 China will expand its financing scale and maintain its credit growth.

Since 2011, the Chinese Government lowered the rate at which it issues its currency from 16 percent in 2010 to 14 percent in order to control inflation. In 2012, China's growth of consumer price index was much lower than in the previous year, reaching 1.9 percent in October, the lowest in the past decade. Yuan said that as long as inflation remains under control, the government may raise its rate of currency issuance back to 16 percent in 2013. "This is a reasonable level," he said.

The Central Government is likely to adopt measures such as lowering the reserve requirement ratio, Yuan added, but the key point of a prudent monetary policy is to control the speed of currency growth and enhance the flexibility of monetary policy.

Since the United States, the EU and Japan are experiencing slow growth, China's foreign trade has been encumbered. When fixed assets investments start to grow rapidly, the Chinese Government has pushed domestic demand as the major stimulus for economic growth.

The CEWC emphasized expanding domestic demand and promoting consumption so as to stimulate economic growth.

This conference also emphasized urbanization as a means to stimulate consumption growth. The country will gradually advance urbanization while ensuring that a population shift from rural to urban is done in an orderly fashion.

In 2011, China's urban population accounted for 51.27 of the total. According to a report released by the CASS, China's urbanization rate will surpass 60 percent by 2020. Every percentage point of urbanization growth equates to roughly 10 million rural residents moving from the countryside to the city and involves trillions of yuan in investment to stimulate domestic demand and increase consumption.

"By pressing urbanization ahead, the country can drive up both investment and consumption. Urbanization is key in promoting sustainable and steady economic growth in China," Lian said.

Major Tasks for 2013

- Improving macro-control and promoting sustainable and sound economic development

- Ensuring a steady supply of farm produce

- Accelerating the adjustment of the country's industrial structure and improving its overall industrial quality

- Pressing urbanization forward and focusing on improving its quality

- Strengthening the social security system and improving people's livelihood

- Comprehensively deepening economic reforms and expanding opening up

(Source: Statement of the Central Economic Work Conference)

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