(Observation of the Two Sessions) How to fight the "combination boxing" of China's expansion of domestic demand?
China News Agency, Beijing, March 5 (Reporter Chang Tao) Chinese Premier Li Keqiang proposed in the government work report on the 5th that he will firmly implement the strategy of expanding domestic demand and promote coordinated regional development and new urbanization.
Expanding domestic demand is a common phrase in Chinese government work reports.
Especially in the context of normalizing epidemic prevention and control, expanding domestic demand is considered a powerful measure to restore economic growth.
What is the significance of this year's government work report to "firmly implement the strategy of expanding domestic demand"?
How to fight this "combination punch"?
Chen Yuyu, a professor at Peking University's Guanghua School of Management and director of Peking University's Economic Policy Research Institute, said in an interview with a reporter from China News Agency that the firm implementation of the strategy of expanding domestic demand continues the "adherence to the strategic basis of expanding domestic demand" in the 2021 government work report. There are three main reasons for this.
First, the current macroeconomic demand in China is weakening, expectations are unstable, and the macroeconomic situation is facing some challenges.
"It should be seen that China's economy has achieved good results in 2021, but consumption growth is weak. The Central Economic Work Conference in 2021 also made a precise judgment on this, showing the need to expand domestic demand." Chen Yuyu said.
The second is the requirement of changing the mode of economic growth.
Chen Yuyu said: "China's economic growth must achieve a dynamic balance between investment-driven and consumer demand-driven. Relying on export-driven growth is phased and temporary. In the future, consumer demand-driven will play a more important role."
The third is to expand domestic demand in line with high-quality development, common prosperity, and people-centered development.
"Expanding domestic demand is conducive to increasing employment opportunities and driving employment, and is conducive to further strengthening the infrastructure construction of the whole society, which not only helps to boost the economy, but also enhances the people's sense of happiness and gain." Chen Yuyu said.
In the government work report, Li Keqiang proposed to unblock the national economic cycle, open up all links of production, distribution, circulation and consumption, and strengthen the driving force of domestic demand for economic growth.
Promote the continuous recovery of consumption; actively expand effective investment.
Chen Yuyu believes that it is equally important to promote the continuous recovery of consumption and actively expand effective investment. It is necessary to further give full play to the leveraging and pulling role of government investment and state-owned enterprise investment, and revitalize private capital.
Regarding how to play the "combination punch" of consumption and investment to stimulate domestic demand, Jia Kang, the founding director of the Huaxia New Supply Economics Research Institute and a researcher of the China Academy of Fiscal Sciences, said in an interview with a reporter from China News Agency that from the perspective of economic cycle , there is investment first and then consumption, both of which are important components of domestic demand.
Looking forward to the future, the consumption potential of the Chinese market is considerable, but at present, we must pay attention to the exploration of sustainable consumption power.
"Effective investment must be formed at the initial link of the economic activity chain, so that consumption can be continuously supplied. Without effective investment, consumption will lose its supporting force and become 'water without source, tree without roots'. On the consumption side, we also need to break through the blockages, so that while increasing income, people can eliminate some of the so-called precautionary saving motives and increase the marginal propensity to consume." Jia Kang said.
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