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

Achieving socialist modernization is a step-by-step, continuously developing and progressive historical process. The Fourth Plenary Session of the 20th CPC Central Committee, based on the overall “14th Five-Year Plan,” clearly proposed to “adhere to expanding domestic demand as a strategic foundation” and “enhance the endogenous momentum and reliability of the domestic big 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 indicate that in the face of global economic uncertainties, the certainty and stability of China’s economy come from its super-large-scale market; only by promoting consumption and investment, and ensuring a healthy interaction between supply and demand, can a smooth domestic big 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 release new consumption potentials. Promoting the coordinated effort of both is not only related to the speed and quality of economic growth but also to 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 commodity consumption to a balanced mix of goods and services. Digital technologies, artificial intelligence, and other innovations are continuously creating new formats, models, and scenarios, and the huge consumption potential will continue to be unleashed. 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 demand significant investment in equipment renewal, process innovation, and digital and intelligent transformation. Addressing weaknesses in key core technologies and developing emerging and future industries will also generate new momentum for investment growth.

However, coordinated development also faces prominent contradictions such as weak demand supply, bottlenecks in the domestic big cycle, and other issues. Weak endogenous driving forces of consumption, low actual benefits of investment, local protectionism, and market segmentation restrict the healthy interaction between consumption and investment. To address these, comprehensive measures must be taken: strengthening macro-control, adhering to the 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 big cycle.

The close integration of investment in physical assets and human capital is an upgrade and optimization of China’s investment philosophy, direction, and focus. During the “14th Five-Year Plan” period, balancing “people” and “things” in investment requires that “physical input” serve “people’s development,” and that “people’s progress” promote “upgrading of 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 human capital should focus on addressing shortcomings in people’s livelihoods, continuously increasing investment in education, healthcare, elderly care, childcare, and cultural activities, and solidifying residents’ basic support in employment stability, health security, and aging 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 to facilitate factor mobility and improve resource allocation efficiency are essential. Only then can the demand and creativity generated by investment in human capital be effectively transformed into a powerful driving force for economic development.

Centered on enhancing the endogenous momentum and reliability of the domestic big cycle, the CPC 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)