The media supervised by the People's Bank of China: will prioritize domestic demand as the leading factor

From December 10 to 11, the Central Economic Work Conference was held in Beijing. The conference focused on "how to view the current situation" and "how to act next year," steering the direction for China's high-quality economic development.

Standing at the historical intersection of the conclusion of the "14th Five-Year Plan" and the planning of the "15th Five-Year Plan," the conference emphasized the continuous expansion of domestic demand and optimization of supply, establishing "adhering to domestic demand as the mainstay and building a strong domestic market" as the top priority for next year's economic work.

In recent years, domestic demand has become the main driving force and stabilizing anchor for economic growth. From 2021 to 2024, the average contribution rate of domestic demand to economic growth reached 86.4%, with final consumption contributing an average of 56.2% to economic growth, an increase of 8.6 percentage points compared to the "13th Five-Year Plan" period. Globally, China remains the second-largest consumer market, the largest online retail market, and the second-largest import market.

In the future, the characteristic of the domestic market leading the national economic cycle will become more pronounced. Against the backdrop of increasingly severe and complex internal and external development environments, only by adhering to a domestic focus, comprehensively expanding domestic demand, and building a strong domestic market can we enhance development initiative and firmly grasp the initiative for development amid changing international circumstances.

Looking back at the recent Central Economic Work Conferences, the strategic position of expanding domestic demand has been continuously elevated. At the end of 2021, implementing the strategy of expanding domestic demand was included as part of the requirements for macro policies to be stable and effective in the national economic work deployment. In the following years, expanding domestic demand has consistently ranked among the top two economic work priorities in the conference deployments. In the "15th Five-Year Plan" proposal, "adhering to expanding domestic demand as a strategic foundation" also holds an important position.

With a focus on next year's economic and social development goals, strengthening the domestic circulation, and building a strong domestic market, we must use the stability of domestic circulation to counterbalance the uncertainties of international circulation, firmly maintaining the leading position of domestic demand.

Adhering to domestic demand as the mainstay and comprehensively expanding domestic demand requires a vigorous boost to resident consumption. Consumption is the final demand and a key link and important engine for smooth domestic circulation, providing lasting driving force for economic growth. We must solidify the robust foundation for "being able to consume." The Central Economic Work Conference proposed for the first time the formulation and implementation of an income increase plan for urban and rural residents, in conjunction with special actions to boost consumption, to stabilize and expand resident income from the source, solidifying the foundation for consumption capacity and fundamentally restoring and enhancing resident consumption confidence. We must optimize the market environment for "daring to consume." The conference focused on optimizing the implementation of "dual heavy" projects and clearing unreasonable restrictions in the consumption field, striving to create a transparent, fair, and safe consumption environment, fully unleashing suppressed potential purchasing power. We must create diverse scenarios for "willing to consume." The conference aligned with consumption development trends, emphasizing the expansion of high-quality goods and service supply to cultivate and grow new consumption growth points, continuously expanding new space for domestic demand growth and injecting strong endogenous momentum into sustained and healthy economic development.

Adhering to domestic demand as the mainstay and comprehensively expanding domestic demand requires promoting investment stabilization and recovery. Stabilizing investment is an important support for boosting domestic demand. We must leverage the role of government investment as a lever. Based on the conference's requirements for central and local governments regarding investment and the deployment of optimizing "dual heavy" projects and utilizing new policy financial tools, we will strengthen the precision and effectiveness of investment, driving further optimization of the investment structure from top to bottom Exploring the potential of social investment. It is necessary to encourage private investment to form a synergy. The meeting called for effectively stimulating the vitality of private investment by creating a fair competitive environment for private capital and breaking down hidden barriers to attract private capital to participate in major projects. Emphasis should be placed on advancing urban renewal with high quality. The fundamental purpose of stabilizing investment is to enhance the sense of gain, happiness, and security of all people. In accordance with the meeting's requirements, more funds should be directed towards urban renewal, which is related to the livelihood of the people, effectively empowering high-quality economic and social development and continuously releasing investment potential.

One part deployment, nine parts implementation. Prioritizing domestic demand is a profound insight by the Party and the state regarding the current economic situation. It is necessary to fully implement the overall requirements and policy orientation for next year's economic work, accelerate the cultivation of a complete domestic demand system, and form a virtuous cycle of mutual promotion between consumption and investment, transforming the potential of a super-large-scale market into real growth momentum.

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