Sixth, a differentiated consumption credit policy should be employed. For expenses specific to durable goods or education, financial institutions should lower interest rates and support consumption on credit. But until the real estate market stabilizes, restrictions on property should not be eased.

Seventh, examine the consumption needs of senior citizens and people whose annual income is between 3,000-5,000 yuan ($439-$732). Take the retirement industry for instance. Experts said 169 million of China's 1.3 billion people are above 60 years old. At present, there are 2.5 million beds in retirement centers, but 6 million more should be created to accommodate the increasing number of seniors. According to estimates, one bed and relevant care services will require an investment of 500,000-800,000 yuan ($73,000-$117,000). In the next 10 years, the retirement industry will foster a market worth 50 billion yuan ($7.3 billion), excluding the elderly recreation, training and travel markets.

Eighth, encourage the private sector's engagement in profitable government-supported projects. The abovementioned are conventional methods. I also suggest a system of capital gain dividends in state-owned enterprises (SOEs). In 2008, the net assets of all SOEs, excluding the assets of financial institutions, stood at 17 trillion yuan ($2.5 trillion), or about 12,900 yuan ($1,888) for each citizen. If the government puts the dividends it receives from the SOEs into its budget, it can use the money to subsidize the low-income group or raise the consumption level for all citizens.

Last but not least, governments at all levels should gradually reduce their share holdings in SOEs. Currently, a trial system has been carried out where shares from listed SOEs are transferred to social security funds. But this is not enough. As long as the government maintains a controlling proportion of the SOEs' shares, it should transfer the rest of the shares to other institutions and individuals so that people can enjoy the benefits of the increasingly powerful and high quality SOEs.

While the 10 measures I've proposed are meant to expand consumption, a number of administrative obstacles still hinder consumption efforts, including the separation of urban and rural hukou (permanent residence permit), as well as how and when the government consumption gives ground to household consumption.

Expanding consumption is an urgent and strategic problem. A Goldman Sachs' report said the high savings rate in China would not only clog long-term economic stability and growth in China, but would also pose a threat to the world economy—the world would not be able to absorb all the savings of the Chinese, which would lead to more intense world trade and currency exchange disputes.

After 30 years of reform and fast economic development, plus powerful GDP volume, it is time that government adopted a serious attitude to improving consumption.