Financial officials and corporate executives have praised the Party for advocating that ordinary people benefit more from asset investment.
Shang Fulin, chairman of the China Securities Regulatory Commission, said his eyes widened when he heard the words "property income" in Hu Jintao's keynote speech on Monday.
Hu said: "Conditions will be created to enable both urban and rural residents to generate property income."
Shang said Hu's remark was evidence China will "actively advance the healthy development of the capital market, to allow a large number of investors to share in the economic boom fairly and equally".
The country's economic takeoff - its annual growth rate has been about three times the world's average for the past three decades - has bulged the pockets of Chinese people and lifted their combined bank deposits to about 15 trillion yuan ($2 trillion).
When the country's stock markets turned into a bull run last year, following a four-year stagnancy, people rushed to open accounts on the Shenzhen and Shanghai exchanges. By the start of this month, more than 120 million had signed up.
Fund companies, which now hold more than 90 million accounts, have seen their total assets grow to more than 3 trillion yuan, while the combined equity market capitalization of the domestic bourse is more than 25.32 trillion yuan, about 5.7 percent of the world's total.
Shang attributed the boom to reforms initiated in 2005 to float previously non-tradable State-owned shares, crack down on insider trading, and clean up the securities sector.
Driven by banking and coal mining shares, the country's benchmark Shanghai Composite Index closed at 6092.06 on Tuesday, the second all-time high in two days.
Jiang Jianqing, chairman of the Industrial and Commercial Bank of China and delegate to the congress, said this was the first time the Communist Party had delivered such a message in a keynote political document and it is expected to set the tune for the country's development strategy in the coming years.
Wu Yan, chairman of the People's Insurance Company (Group) of China, said: "The words reflect the times, as more and more people realize the way to accumulate wealth is to retain and increase the value of their assets."
Although China began its economic reform and opening-up policies 29 years ago, its financial market remains relatively closed and fragile. The Chinese are also less financially sophisticated than people in developed countries, and are more used to accumulating wealth by working and saving.
Chen Xiaolong, an official with the National Bureau of Statistics (NBS), said property income - referring to the capital gains from bank deposits, securities, real estate, automobiles and other assets - contributed an average of only 2 percent to the country's per capita disposable income.
Salaries account for 70 percent, while transfer income such as pensions and subsidies, and operational income from trade accounted for the remaining 28 percent.
NBS figures show per capita property income averaged 240 yuan ($32) last year, up 26.5 percent on 2005.
"Considering the small base, property income has huge growth potential," he said.
A survey by the NBS showed Zhejiang people are the most financially savvy. In the first three quarters of last year, their property income stood at 697 yuan, the highest of the country.
"As China facilitates financial innovations, people will find more investment opportunities, including investing aboard, through qualified domestic institutional investors," Jiang said.
Xinhua
(China Daily 10/18/2007 page6)
