The government has set the goal of holding this year's consumer price growth at around 4 percent. "Inflationary risks still exist, but the price pressures are easing," said Mei Xingbao, former President of China Oriental Asset Management Corp. "The 4 percent for this year is reasonable. The target is still attainable though it will require a lot of effort."

Hollywood film production boosts the U.S. economy and Japan's animation industry ranks highly in its national economy. Experts say that China should also find new ways to spur consumption. In recent years, China's cultural industry has been growing at an average annual rate of about 17 percent, surpassing that of the national economy by more than 7 percentage points.

"This indicates that the cultural industry will become a new engine to expand domestic demand in 2012," renowned economist, Li Wuwei, now Vice Chairman of the 11th CPPCC National Committee, told ChinAfrica.

Boosting the real economy

Industrial insiders said the global financial crisis is the outcome of an imbalance between the real economy and virtual economy. In China, small businesses were the first to ring the alarm as the country walks a fine line between fighting inflation and maintaining growth.

Wenzhou has more than 30 million small- and medium-sized enterprises (SMEs), fewer than 10 percent of which are able to get loans from financial institutions, according to Zhou Dewen, Chairman of the Wenzhou Small- and Medium-sized Enterprises Development Association. The difficulty of borrowing money from banks is threatening the survival of SMEs, prompting many to turn to private lending despite the high interest rates, or speculating in stocks, futures and the real estate industry, said Zhou.

Yao Jingyuan, former chief economist with the National Bureau of Statistics, said that speculation would widen the gap between rich and poor, and increase financial risks. He suggested the government should help small and micro-sized enterprises survive the difficult business environment amid shrinking overseas orders and rising costs by using a mixture of both monetary and fiscal policies.

China called for more efforts to support the sound development of SMEs. "Small and micro-sized firms serve as a significant channel for creating jobs, and as a major platform for growth and scientific innovation of enterprises," according to a statement released this February by the State Council. This year's CPPCC No.1 Proposal focuses on the development of the real economy. This is sending a positive signal to small and micro-sized firms.

China has also vowed to develop the non-public sector of its economy by breaking up monopolies and relaxing restrictions on market access, said the government work report. It says China will encourage private capital flow to areas such as public utilities, finance, telecommunications, education, and medical care. Detailed policies will be drawn up within the first half of this year.

2012 by the Numbers

7.5%

GDP is projected to grow by 7.5 percent, lower than the actual economic growth of 9.2 percent in 2011.

4%

Rise in the CPI is set at around 4 percent, lower than the 5.4 percent of CPI rise in the previous year.

9 Million

Over 9 million jobs will be created for urban residents and the registered urban unemployment rate will be kept at 4.6 percent or lower. The targets are the same as those of last year.

50%

The urbanization rate will exceed 50 percent. More importance will be given to transforming migrant workers, who have a stable employment and residence in cities, into urban residents.

800 Billion

A deficit of 800 billion yuan ($127 billion) is projected, consisting of 550 billion yuan ($87 billion) in central government deficit and 250 billion yuan ($40 billion) in local government bonds.