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China will expand domestic demand this year, according to a government work report submitted Sunday to the national legislature for deliberation.

Priority will be given to the recovery and expansion of consumption, and incomes of urban and rural residents will be boosted through multiple channels, said the report.

Government investment and policy incentives should effectively drive investment, it said, adding that more private capital should be encouraged and attracted into major state projects and projects aimed at addressing areas of weakness.

It is proposed that 3.8 trillion yuan be allocated for special-purpose bonds for local governments this year, the report said.