SCIO briefing on Report on the Work of the Government
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E-mail China.org.cn, May 25, 2020
Southern Metropolis Daily:
According to the Report on the Work of the Government today, the strategy of expanding domestic demand will be steadfastly pursued, but now, consumer spending and investment are declining. How can domestic demand be effectively expanded? How will the relationship between expanding domestic demand, and ensuring and improving the people's quality of life be handled? Thank you.
Huang Shouhong:
Some aspects of this issue has already been mentioned just now. Let's invite Mr. Sun to give a brief introduction.
Sun Guojun:
Let me first add something on the employment. Searching through an electronic version of the report before coming here, I found that the most frequently used word was "employment". This might be the first time in history that the word appeared 39 times.
Regarding the question just now, expanding domestic demand is what China has been doing to develop its economy for a long time. The strategy of expanding domestic demand has also been put forward before. The whole second section of the report in 2000, for example, was about this topic. That was during the ninth Five-Year Plan period. The strategy was put forward again in 2011 during the 12th Five-year Plan period. In fact, we have been insisting on expanding domestic demand, because it is a unique advantage of a populous country, and can provide stable support for economic growth.
Consumption now contributes to more than 60 percent of economic growth. This year, we put forward the strategy to vigorously boost domestic demand. In terms of understanding this strategy, this is not a case of expanding domestic demand merely because there is insufficient demand. Mr. Huang also discussed this issue when he made his introductory remarks earlier. From what I understand, there are a few points as follows:
First, expanding domestic demand must be combined with supply-side structural reform. The supply-side structural reform can both meet the needs of the upgrade in demand and create demand. After China's per capita GDP exceeded $10,000, many residents' demand for mid-to-high-end products increased. The production and supply also need to keep pace. The expansion of domestic demand required the entire industry’s supply system to upgrade at the same time, pushing the economy to realize a high-level of dynamic balance.
Second, we need to increase domestic demand to improve people's living standards. It would be meaningless to expand domestic demand just for the sake of expanding domestic demand. We developed to improve people's living standards, and the ultimate goal of expanding domestic demand is also centered around improving people's living standards. In essence, this is a demonstration of a people-centered approach. We should work to expand domestic demand and improve people's living standards.
Third, in terms of combing consumption and investment, we should make investments to expand domestic demand. For example, new investments could be made on new infrastructure, new urbanization initiatives and major projects.
Fourth, boosting domestic demand and expanding external demand should advance in a parallel fashion. Some people mistakenly think that there is no need for external demand if there is domestic demand, but this is actually not the case. The total amount of China's imports and exports accounts for 30 percent of GDP. We must promote the domestic market along with the external market. We expand domestic demand to promote our openness to the outside market. The ultimate goal of expanding domestic demand is not only bringing good opportunities to domestic enterprises, as it will also present opportunities to companies across the world. Expanding domestic demand in China holds great significance. Thanks.
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