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News Summary: China vows to boost consumption

The Associated Press

BEIJING ON THE MOVE: China's government promised new measures to boost domestic consumption after growth dipped in the latest quarter. A Cabinet statement also promised to guard against risks from rising local government debt, a factor that is causing growing concern about China's finances.

PROMISES: The statement promised changes in medical, pension and other policies but gave no other details. Analysts say higher outlays on social programs are required to free up household incomes for consumer spending if the ruling Communist Party is to achieve its goal of nurturing self-sustaining growth based on domestic consumption instead of trade and investment.

BUTTERFLY EFFECT: Growth suffered an unexpected decline to 7.7 percent in the first three months of the year from the previous quarter's 7.9 percent. That prompted some private sector economists to cut their growth forecasts for the full year but to still robust levels just under 8 percent. The World Bank reduced its growth outlook this week from 8.4 percent to 8.3 percent.