"Our efforts to expand domestic demand are being linked up with overall economic growth, social development and the improvement of living standards," the foreign ministry quoted Wen as saying in talks with Robert Zoellick.

"We definitely must use economic development to gradually meet the material needs of the people. Ultimately we want consumption to effectively pull along and push forward economic development."

Many of China's 1.3 billion people live in impoverished inland rural areas where wages have lagged behind the nation's developed cities and coastal areas, Wen said.

So government fiscal and monetary stimulus policies will focus on improving rural incomes and providing better social security for low-income groups, he added in a statement on the ministry's website.

"China will advance development of infrastructure in rural areas, including drinking water, bio-gas, roads, electricity and telecommunications... and strive to expand employment," he said.

Zoellick praised China's measures to fight the global crisis, the foreign ministry said.

"The best way China can help support the world economy at this time is through the efforts China is making to strengthen its own economy," Zoellick said earlier after meetings with other top economic planners.

"China plays a critical role in the global economy, (its) efforts to boost domestic demand are good for the global economy. They can also help China achieve its own economic rebalancing goal."

Zoellick told journalists on Monday that his visit was focused on better understanding China's newly announced policies to counter the global financial crisis and to gauge the leadership's views on fighting the downturn.

On Sunday, Zoellick visited areas in Sichuan province devasted by the May 12 magnitude 8.0 earthquake. The World Bank has offered China a 710 million dollar loan to rebuild the region where up to 88,000 people were killed or left missing.

related report
China fixed asset investment up 26.8 percent Jan-Nov: govt
China's urban fixed asset investment rose 26.8 percent in the first 11 months of 2008, the National Bureau of Statistics said Tuesday, indicating a slight slowdown in November.

Fixed-asset investments in cities -- a key measure of spending on productive capacity -- were 12.8 trillion yuan (1.9 trillion dollars) for the period, the bureau said.

The bureau did not provide a figure for November alone but in the first 10 months of the year, urban fixed asset investments were up 27.2 percent.

Investment in real estate in the 11 months increased by 22.7 percent, down from growth of 24.6 percent in the first 10 months, highlighting a weakening domestic demand despite government policies to help sales.

Investment in projects approved by the central government rose 31.8 percent in the period, up from the 28.7 percent seen in the first 10 months, the bureau said, as Beijing sought to pump prime the slowing economy.

However, investment in projects approved by local governments increased by 26.3 percent, slower than the 27.1 percent booked from January to October.

Bank loans for fixed-asset investments were up 11.7 percent in the first 11 months, while funds raised by the companies themselves -- for instance in the form of reinvested profits -- were up by 32.6 percent.

By contrast, foreign funding earmarked for fixed-asset investment rose by just 5.2 percent, down from 5.8 percent in the first 10 months.

China has introduced a string of policies aimed at curbing the deceleration of its economic growth, which dropped to nine percent in the third quarter and is expected to be even lower in the fourth quarter.

In its latest attempt to fight the global downturn, the government said over the weekend that it would raise money supply by 17 percent next year, boost policy loans by 14.6 billion dollars and urge commercial banks to lend more.

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