Re-reading the Central Economic Work Conference and mentioning this strategic base point.

"Hot Interpretation" combed and found that the word "expanding domestic demand" was repeatedly mentioned in this year’s high-level meeting. The Standing Committee of the Political Bureau of the Communist Party of China Central Committee meeting of the Communist Party of China held on March 4 pointed out that "it is necessary to combine the resumption of work with the expansion of domestic demand and release the restrained and frozen consumption"; On September 8, General Secretary of the Supreme Leader emphasized at the National Commendation Conference on Fighting COVID-19 Epidemic that "we should firmly grasp the strategic basis of expanding domestic demand and protect and stimulate the vitality of market players"; The Fifth Plenary Session of the 19th CPC Central Committee put forward that "we should adhere to the strategic base of expanding domestic demand, accelerate the cultivation of a complete domestic demand system, organically combine the implementation of the strategy of expanding domestic demand with deepening the structural reform on the supply side, and lead and create new demand with innovation-driven and high-quality supply" … …

Why is expanding domestic demand frequently mentioned?

On April 10th, 2020, General Secretary of the Supreme Leader made a profound analysis at the seventh meeting of the Central Financial and Economic Committee: "After the reform and opening up, especially after China’s accession to the WTO, China joined the international cycle and formed a market and resources (such as mineral resources) ‘ Two heads are out ’ , forming ‘ World factory ’ Our development model has played an important role in seizing the opportunity of economic globalization, rapidly enhancing economic strength and improving people’s lives. In recent years, economic globalization has encountered headwinds, and this epidemic may aggravate the trend of anti-globalization. The domestic tendency has increased significantly, and the external environment facing China’s development may undergo major changes. "

In this case, it is not only necessary to deal with external uncertainty, but also an inevitable choice for China at the present stage of development to put its development foothold at home, actively expand domestic demand and rely more on the domestic market to achieve economic development.

In fact, since the international financial crisis in 2008, China’s economy has been shifting to the domestic macro-cycle. The ratio of current account surplus to GDP has dropped from 9.9% in 2007 to less than 1% now, and the contribution rate of domestic demand to economic growth has exceeded 100% in seven years.

Forming a strong domestic market is an important support for building a new development pattern. The Central Economic Work Conference specifically mentioned "demand-side management" in the requirements of building a new development pattern: it is necessary to firmly grasp the main line of supply-side structural reform, pay attention to demand-side management, get through the blocking points, fill the shortcomings, and connect all links of production, distribution, circulation and consumption, so as to form a higher level dynamic balance of demand pulling supply and supply creating demand, and improve the overall efficiency of the national economic system.

It can be seen that the core of the new development pattern is the transformation and upgrading of the industrial structure on the supply side and the expansion of domestic demand on the demand side, so as to improve the matching degree between supply and demand and promote the smooth circulation.

The advantage of a big country’s economy is that it is internally recyclable. China has a population of 1.4 billion, and its per capita GDP has exceeded $10,000, making it the largest and most potential consumer market in the world. The optimization and upgrading of residents’ consumption, combined with modern technology and production methods, contains huge room for growth.

Then, how to expand domestic demand and form a higher level dynamic balance of demand pulling supply and supply creating demand?

The meeting also gave the "answer" — — Effective institutional arrangements must be made in reasonably guiding consumption, savings and investment.

Some experts have analyzed that this shows that the central government has focused on institutional issues to strengthen demand-side management. Instead of simply stimulating consumption and leading consumption, we should start with deep-seated contradictions such as income distribution and social security, and use reform methods to clear difficulties and block points.

China has turned to the stage of high-quality development, and is in the key period of changing the development mode, optimizing the economic structure and transforming the growth momentum. To build a new development pattern, we should organically combine the implementation of the strategy of expanding domestic demand with deepening the structural reform on the supply side, and lead and create new demand with innovation-driven and high-quality supply. Promote consumption innovation, improve consumption quality through reform, and stimulate potential economic vitality.

"The most fundamental thing to expand consumption is to promote employment, improve social security, optimize the income distribution structure, expand middle-income groups, and solidly promote common prosperity." "We should combine expanding consumption with improving people’s quality of life." "It is necessary to reasonably increase public consumption and improve the efficiency of public service expenditures such as education, medical care, old-age care and child care." … … A series of specific arrangements make people feel not only the strength of the control measures, but also the "temperature" of the control measures.

(Central Radio and Television General Station CCTV Network)