A country's consumption level serves as an important index to measure whether or not it has put in place a development strategy that prioritizes the growth of people's incomes and the improvement of their living conditions. It also remains a key factor in determining whether the country can realize social impartiality and sustainable development.

The reason for the lingering low-level consumption in proportion to the gross domestic product (GDP) in China in recent years is its prevailing economic growth model that is heavily dependent on investment and exports. The country has promised to develop a consumption-driven economy instead of an investment-driven one in the 12th Five-Year Plan (2011-2015), but this will depend on whether the country can successfully push forward a series of sweeping and deepened reforms in some key areas.

China's economic development has encountered an outstanding problem in recent years, manifesting as the stark contradiction between the high-speed growth of the GDP and the declining consumption ratio. The underlying reason for this problem is the country's adoption of a government-led growth mode that puts top priority on economic development.

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As a result, the country's production capacity has grown faster than residents' consumption capacity and the gap between the rich and the poor has kept widening. The continuing decline in people's consumption ratio, if not curbed, will aggravate the country's dependence on investment and export for economic growth. It will also amplify the country's current economic and social problems.

Provided that the policies and measures contained in its 12th Five-Year Plan are effectively implemented, China is likely to realize the transformation of its economic growth model, which means that the country's consumption ratio will increase from the current 48 percent to 55 percent in five years and the consumption ratio of residents from 35 percent to 45 percent. To facilitate this process, China should adjust relevant policies in a bid to form an environment favorable for consumption.

Statistics show that China's labor remuneration declined to 39.7 percent in 2007 from 51.2 percent in 1994 in proportion to the country's GDP. Such a situation, if not changed, will be a drag on national economic development.

At the same time, related measures should be taken to raise people's inclination to consume.