What is the meaning of the Central Economic Work Conference's emphasis on expanding domestic demand?

(Economic Observer) What is the meaning of the Central Economic Work Conference's emphasis on expanding domestic demand?

　　China News Agency, Beijing, December 16th (Liu Wenwen) The Central Economic Work Conference that closed on the 16th emphasized that efforts should be made to expand domestic demand.

Fully tap the potential of the domestic market and enhance the role of domestic demand in stimulating economic growth.

What is the meaning of this?

　　Cai Tongjuan, a researcher at the Chongyang Institute for Financial Research at Renmin University of China and deputy director of the Macro Research Department, told China News Agency that China is currently in the process of adjusting from "promoting internal development with external resources" to "promoting internal development with internal resources" to build a resilient and resilient domestic market. very critical.

Without demand, the domestic market is like water without a source.

　　Judging from the current situation, the effective demand in the domestic market declined in November.

According to data released by the National Bureau of Statistics of China a few days ago, the total retail sales of social consumer goods in November fell by 5.9% year-on-year, an increase of 5.4 percentage points from the decline in October.

　　"Long-term insufficient effective demand may lead to an imbalance of endogenous energy in the domestic cycle and a loss of potential production capacity. The top priority must be to boost the endogenous impetus for economic growth," Cai Tongjuan said.

　　The meeting mentioned that it is necessary to organically combine the implementation of the strategy of expanding domestic demand with the deepening of supply-side structural reforms.

　　Wang Xiaosong, a researcher at the National Academy of Development and Strategy at Renmin University of China, told China News Agency that from the perspective of economic cycles, demand and supply are complementary.

Therefore, while expanding domestic demand, efforts must also be made from the supply side.

The supply-side structural reform helps to eliminate those products and production capacity that cannot meet the development needs of modern society, and continuously optimizes the industrial structure.

　　"We produce what the market needs," he continued. Despite the impact of the epidemic, the consumption structure is still being optimized and upgraded.

Therefore, while expanding domestic demand, it is also necessary to gradually adjust production capacity and promote products and services to move towards higher quality, higher level, and higher level.

　　The meeting pointed out that the recovery and expansion of consumption should be given priority.

Enhance consumption capacity, improve consumption conditions, and innovate consumption scenarios.

　　Pang Ming, Chief Economist and Research Director of Jones Lang LaSalle Greater China, said that the epidemic has accelerated the pace of the transformation of the retail industry from an offline model to an online model, laying the foundation for the further expansion of online consumer groups. The accelerated digital transformation of the industry and the whole society has created opportunities.

With the further scientific and precise optimization and implementation of epidemic prevention and control measures, and the implementation of policies to stabilize demand and promote consumption, the offline consumption scene will gradually recover, and domestic demand is expected to gradually recover.

　　Regarding the multi-channel increase in the income of urban and rural residents mentioned in the meeting, Cai Tongjuan emphasized that we should avoid talking about consumption without income.

After three years of fighting against the epidemic, the income of residents has declined, and consumption motivation is insufficient.

Only by effectively increasing the disposable income of residents can we effectively promote consumption.

　　She further said that adjusting the structure of income distribution and expanding the proportion of middle-income groups is a mid- to long-term issue.

In the short term, the government can promote consumption during the double festival period by issuing consumer coupons, energy-saving subsidies, and festival fees for low-income groups, such as promoting online consumption by issuing digital RMB red envelopes.

　　Investment is an important component of domestic demand.

The meeting pointed out that government investment and policy incentives should be used to effectively drive social investment, accelerate the implementation of major projects during the "14th Five-Year Plan", and strengthen inter-regional infrastructure connectivity.

Policy finance should increase financing support for major projects in line with the national development plan.

　　In Cai Tongjuan's view, it is still necessary to focus on investment in infrastructure, especially new infrastructure, especially investment in network and digital infrastructure, which is an important driving force for investment and economic growth.

Regarding the encouragement and attraction of more private capital mentioned in the meeting to participate in the construction of major national projects and short-term projects, she said that private enterprises are an important force for the endogenous growth of China's economy and technological innovation, and private investment is also an important part of total social investment. component.

The government should guide private enterprises to invest more green, low-carbon, and technologically, and policies in the fields of green finance and technological innovation should be appropriately tilted towards private enterprises.

　　Chen Yuyu, director of the Economic Policy Research Institute of Peking University, told China News Agency that encouraging and attracting more private capital to participate in the construction of major national projects and projects to make up for shortcomings will not only play a role in the short term, but also encourage people in the long run.

It helps to improve expectations, increase investment enthusiasm, and stimulate the vitality of the whole society, thus bringing about the improvement of the entire investment ecology.

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