Wang Hongju: Expanding demand is the key structure for sustained economic recovery and improvement | demand | economy

The Political Bureau of the Central Committee of the Communist Party of China recently held a meeting emphasizing that restoring and expanding demand is the key to the sustained recovery and improvement of the current economy.

The data released by the National Bureau of Statistics shows that in May, the economic operation continued to recover, but market demand remained insufficient, and some structural problems were more prominent, with a slight decline in the growth rate of major economic indicators. The macroeconomic situation in our country urgently requires the continued expansion of demand, and the combination of expanding domestic demand and improving people's livelihoods to continuously promote high-quality economic development.

The current economic situation is characterized by insufficient momentum for economic recovery, and further boosting of consumer and investment confidence is needed. In May, the total retail sales of consumer goods reached 3780.3 billion yuan, a year-on-year increase of 12.7%, a decrease of 5.7 percentage points from the previous month. From January to May, the national fixed assets investment was 18881.5 billion yuan, up 4.0% year on year, 0.7 percentage points lower than that from January to April. Among them, private fixed assets investment was 10191.5 billion yuan, down 0.1% year on year. In May, the total import and export volume of goods was 3446 billion yuan, a year-on-year increase of 0.5%. Among them, exports decreased by 0.8% and imports increased by 2.3%. Against the backdrop of a complex and severe international environment, significant pressure for domestic structural adjustment, and an unstable foundation for economic recovery, we need to continue to recover and expand demand in the next stage, combining policy effectiveness, stimulating the vitality of business entities, and stabilizing market confidence to consolidate the foundation for economic recovery.

Based on the analysis of the current economic situation, to continuously expand demand, it is necessary to focus on implementing aggregate macroeconomic policies. Positive fiscal policies need to be strengthened and improved, while prudent monetary policies need to be precise and powerful, forming a joint force to expand demand. We need to accelerate the progress of budget expenditures, mitigate the short-term impact of fiscal revenue and expenditure fluctuations on the economy, and promote macroeconomic stability. Smooth resolution of local government debt risks and optimization of debt structure. Comprehensively implement price based and quantity based monetary policies, and streamline the transmission mechanism of monetary policies. Vigorously promote high-level opening up and promote high-quality joint construction of the "the Belt and Road". Strengthen support for foreign trade enterprises and make good use of export tax rebate policies. Intensify efforts to attract foreign investment, reasonably reduce the negative list of foreign investment access, fully integrate with the international high standard market rule system, and optimize a fair competition environment.

Efforts should be made to restore and expand demand, while optimizing structural policies and promoting economic structural upgrading. The aggregate policy and structural policy are inseparable, and the two can promote each other and exert greater effectiveness. We can focus our efforts on the following areas at present.

Firstly, coordinate the construction of urban and rural infrastructure and public service facilities, and promote the upgrading of demand structure. China has shifted towards a stage of high-quality development, with per capita GDP approaching the threshold of high-income countries. With regard to the characteristics of residents' consumption in countries with high income and the requirements of Chinese path to modernization, actively promoting the construction of urban and rural infrastructure and public service facilities can not only expand government investment, but also stimulate residents' consumption, which is an important policy driving force for the present and future. We need to coordinate the planning of urban and rural infrastructure for people's livelihoods, accelerate the construction of green infrastructure, optimize and upgrade transportation and logistics infrastructure, focus on the construction of entrepreneurial and innovative infrastructure, and build data infrastructure with high standards.

Secondly, we must effectively implement the "two unwavering principles" and promote the optimization of the structure of both private and state-owned economies. Deepen the reform of state-owned assets and enterprises, improve the modern enterprise system with Chinese characteristics, optimize the development environment of private enterprises, support the development of small and medium-sized enterprises, build a unified national market, focus on optimizing the business environment, and improve the macroeconomic governance system. Treat state-owned and private enterprises equally, and encourage and support the development and growth of the private economy and private enterprises through policies and public opinion.

Thirdly, make good use of the transfer payment system and optimize the structure of fiscal expenditure. Determine the division of powers between the central and local governments, deepen the reform of the fiscal transfer payment system, pay more attention to the financial operation safety of local governments, especially grassroots governments, and coordinate to ensure basic livelihood, wages, and operation. Coordinate the financial resources of the central and local governments, increase the intensity of central transfer payments, ensure rigid expenditures in financially disadvantaged areas, and prevent financial risks in financially disadvantaged areas.

Fourthly, implement greater technological and industrial policies to promote the upgrading of industrial structure. Science and technology policies should focus on self-reliance and self-improvement, and effectively coordinate education, technology, and talent work. Improve industrial policies for the new stage of development, prioritize maintaining industrial security, and strengthen top-level design in strategic areas. Strengthen the research and development of key core technologies and strategic resource support, and implement the dominant position of enterprises in scientific and technological innovation from a systemic perspective. Combining with future development plans, leveraging the institutional advantages of China's concentrated efforts to accomplish major tasks, guiding innovative entities to make greater efforts in key areas and "bottleneck" technologies, building a modern industrial system, adopting greater support for the research and development and manufacturing of key components and equipment, ensuring the security of the industrial chain and supply chain, and enhancing independent technological innovation capabilities.