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China's economy needs to be driven by household consumption, Michael Spence, winner of 2001 Nobel Prize in Economics, said in Qingdao on Wednesday.

Spence made the remarks at the FT (Financial Times) Chinese Annual Forum 2009 in the eastern coastal city of Qingdao.

China's economic stimulus package, which took 9 percent of its GDP and started in October 2008, was the quickest and largest stimulus package in the world, he said.

China was the first major economy to recover from the global financial crises. The world's third-largest economy grew 8.9 percent in the third quarter from a year earlier, compared to 7.9 percent in the second quarter.

But the stimulus package is mainly composed of huge infrastructure investment and government spending, he said.

China needs to increase household disposable incomes and reduce household savings to make the economy driven more by household spending as the stimulus ebbs, Spence said.

The FT Chinese Annual Forum 2009 is the second forum held by the leading financial newspaper. Its first such meeting was held in Beijing last year.