The Times commented that the two wheels of consumption and investment drove the expansion of domes

Mondo Finance Updated on 2024-01-29

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Zhang Na. As an important leading indicator to observe the national economic situation, China's manufacturing purchasing managers' index (PMI) has fallen recently, reflecting the lack of demand and the lack of momentum in contracting.

In 2024, how to expand domestic demand? The Politburo meeting held on December 8 made arrangements to focus on expanding domestic demand and forming a virtuous circle in which consumption and investment promote each other. This shows that the policy of expanding domestic demand will not be relaxed in 2024, and it is clear that consumption and investment are driven by two wheels.

Expanding domestic demand will remain the main starting point for next year's economic work. Since the beginning of this year, China's economy has withstood the downward pressure brought about by the interweaving of foreign risks and challenges and multiple domestic factors, with consumption accelerating recovery, investment continuing to grow, and domestic demand contributing steadily increasing. In the first three quarters, the contribution rate of domestic demand to economic growth increased to 113%, of which the contribution rate of final consumption expenditure to economic growth reached 832%, effectively hedging the pressure of external demand contraction, and played a positive role in the overall economic recovery. Under the situation of the global economic downturn and the complex and changeable external environment, the expansion of domestic demand will still be the main focus of economic work next year, and it is very important to continue to give play to the role of domestic demand, that is, investment and consumption demand, in stimulating economic growth.

Promote investment and consumption to form a strong synergy to expand domestic demand. Since the beginning of this year, there has been a lot of debate on "which is more critical to stimulate economic growth, consumption and investment", and many economists have expressed their views. According to the view of "consumption-driven economy", an important reason for China's economic slowdown is insufficient consumption, and consumer confidence is boosted through the issuance of consumption vouchers, which in turn stimulates consumption and drives economic growth. The view of "investment-led economic growth" holds that investment is the key to economic growth, and consumption is only the result of investment. In order to achieve economic growth, it is necessary to make effective investments to increase the level of productivity, increase employment opportunities and raise the income level of the people. The Politburo meeting emphasized that "the formation of a virtuous circle of mutual promotion of consumption and investment" means that the expansion of domestic demand next year needs to be coordinated to play the role of consumption and investment in stimulating economic growth. To meet consumer demand, especially the people's growing needs for a better life, we must continuously improve the effective supply capacity and quality, and improve the supply requires effective investment.

Good at grasping the organic combination of effective investment and consumer demand. As the world's second largest consumer market and the largest online retail market, China's super-large-scale market has obvious advantages.

Against the backdrop of slow global economic growth, consumption expansion is undoubtedly an important driving force for China's economic growth in the short term. According to the Politburo meeting, it is expected to continue to exert efforts on the consumption side next year, and release the consumption potential of residents and achieve the matching of supply and demand by reforming the income distribution system, promoting employment and improving the income level of residents. At the same time, the acceleration of the transformation and upgrading of traditional industries, the optimization of the layout of new infrastructure, and the implementation of projects to make up for shortcomings in the field of people's livelihood will give rise to more investment demand. Therefore, in 2024, it is necessary to focus on grasping these effective investment directions, optimizing the investment structure, promoting high-quality supply, driving employment and consumption through the multiplier effect of investment, stimulating development momentum and vitality, and promoting a virtuous cycle of the national economy.

The complicated world is diverse, and the drums urge the boat to be stable. 2024 marks the 75th anniversary of the founding of the People's Republic of China and is a crucial year for the implementation of the 14th Five-Year Plan. We have the confidence and conditions to accelerate the formation of a virtuous circle in which consumption and investment promote each other, better enhance the endogenous driving force of development, and continue to promote the overall economic recovery.

The author is a reporter from the China Economic Times.

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