China's rural migrants key to consumption: Govt

BEIJING (REUTERS) - China's domestic migrant labour force could power consumer spending growth in the world's second biggest economy if workers had better access to basic welfare services in the cities where they live and work, a new government report says.

The 230 million-strong migrant workforce drives China's economy, but a lack of access to education, health and other services tied to the country's strict household registration - or hukou - system forces massive saving, restraining Beijing's efforts to shift growth's focus to consumption from investment.

"Giving the migrant population living in cities permanent status and giving them equal access to fundamental public services would greatly stimulate China's consumption growth," the National Population and Family Planning Commission said in its latest annual report.

Consumption-driven growth is regarded by many economists as a more stable development model for China than the investment-driven path trodden so far, which the International Monetary Fund says stokes over-capacity and inefficiency.