Economic Daily: Persist in Domestic Demand-Driven Growth to Enhance Development Certainty

Achieving socialist modernization is a step-by-step, continuously developing and progressing historical process. The Fourth Plenary Session of the 20th Central Committee, based on the overall “14th Five-Year Plan,” clearly proposed to “adhere to the strategic foundation of expanding domestic demand” and “enhance the endogenous driving force and reliability of the large domestic cycle,” making systematic arrangements for expanding domestic demand. The Central Economic Work Conference closely follows the domestic and international situation, listing “adhering to domestic demand-led growth and building a strong domestic market” as the top priority for economic work in 2026. A series of scientific arrangements demonstrate that in the face of global economic uncertainties, China’s economic certainty and stability come from an ultra-large-scale market; only by promoting consumption and investment, and ensuring a healthy interaction between supply and demand, can a smooth domestic cycle be formed, providing greater confidence in participating in international economic cooperation and competition.

From the perspective of macroeconomic circulation, consumption is the final demand, and investment is the key hub connecting supply and demand. The expansion and structural upgrading of residents’ consumption can provide guidance for investment and promote increased investment efficiency; effective investment can drive employment and income growth, accelerate technological progress and industrial transformation, and unleash new consumption potentials. Promoting coordinated efforts between the two not only relates to the speed and quality of economic growth but also concerns the shaping of a modern industrial system, the release of domestic demand potential, and the cultivation of new productive forces.

The enormous potential of consumption and investment provides a solid foundation for their coordinated development. China’s consumption structure is shifting from primarily goods consumption to a balanced mix of goods and services consumption. Digital technologies, artificial intelligence, and other innovations are continuously creating new business models, new formats, and new scenarios, and the huge consumption potential will continue to be released. Our economy is currently in a critical period of transforming development methods, optimizing economic structure, and shifting growth drivers. The transformation and upgrading of traditional industries require significant investment in equipment renewal, process innovation, and digital and intelligent transformation. Addressing weaknesses in key core technologies, developing emerging industries, and future industries will also generate new momentum for investment growth.

However, coordinated efforts also face prominent contradictions such as weak supply, weak demand, and bottlenecks in the domestic large cycle. Problems like insufficient endogenous demand for consumption, low actual investment efficiency, local protectionism, and market segmentation restrict the healthy interaction of consumption and investment. To address these issues, comprehensive measures must be taken—strengthening macro-control, maintaining a close integration of investment in physical assets and human capital, and seizing opportunities to deepen reforms, breaking through barriers to smooth circulation, and consolidating the solid foundation of the domestic large cycle.

The close integration of investment in physical assets and human capital is an upgrade and optimization of our investment philosophy, direction, and focus. During the “14th Five-Year Plan” period, balancing “people” and “physical assets” in investment requires that “physical investment” serve “people’s development,” and that “people’s progress” promote “upgrading physical assets.” On one hand, investment in physical assets should precisely target investment areas and directions, such as strengthening rural public infrastructure, high-quality and high-standard farmland, urban renewal, and increasing investment in technological innovation. On the other hand, investment in people should focus on addressing shortcomings in people’s livelihoods, continuously increasing investment in education, healthcare, elderly care, childcare, and cultural and sports fields, and solidifying residents’ basic support in employment stability, health security, and elderly care, making medium- and long-term consumption capacity more resilient.

Strengthening institutional construction is key to promoting smooth circulation. Successfully formulating regulations for the construction of a unified national market, deeply rectifying “involutionary” competition, and advancing reforms are necessary to promote factor mobility and improve resource allocation efficiency, so that the demand and creativity generated by investment in people can be effectively transformed into a powerful driving force for economic development.

Focusing on enhancing the endogenous driving force and reliability of the domestic large cycle, the Party Central Committee has made scientific arrangements, and a series of policies and reform measures will be introduced successively. For various regions and departments, implementing practical measures tailored to local conditions is the key to effective implementation, testing responsibility and commitment, and will also determine the success of development.

(Source: Economic Daily)