SCIO briefing about policies and measures on stabilizing employment, ensuring stable growth and promoting high-quality development

ThePaper.cn:

In the current international situation, the role of domestic demand is becoming increasingly important. Last year, the Central Economic Work Conference emphasized vigorously boosting consumption and investment returns and comprehensively expanding domestic demand. What progress has been made in this regard? And what policies will be introduced to better leverage the main driving force of domestic demand? Thank you.

Zhao Chenxin:

Thanks for your question. I will answer it. In April 2020, General Secretary Xi Jinping proposed fostering a new pattern of development that is focused on the domestic economy and features positive interplay between domestic and international economic flows. Over the past five years, significant progress has been made in accelerating the construction of the new development pattern, with domestic demand increasingly serving as the main engine of China's economic growth. Through this process, we have also accumulated rich practical experience and counter-cyclical policy tools.

Based on first-quarter performance this year, various macroeconomic policies have continued to take effect, and domestic demand potential is being released at an accelerated pace. Let me give some examples. Trade-in sales of five major consumer categories — automobiles, home appliances, digital products, home improvement and kitchen/ bathroom fixtures, and electric bicycles — exceeded 500 billion yuan, helping drive total retail sales of consumer goods up 4.6% year on year, an improvement of 1.1 percentage points from the whole of last year. Another example: large-scale equipment renewal drove nationwide investment in equipment and tools up 19% year on year, contributing 64.6% to total investment growth and pushing the overall investment growth rate 1 percentage point higher than last year. As another example, the 2025 market access negative list was recently released, reducing restricted items from 151 in 2018 to 106 currently. As the list gets shorter, markets become more vibrant and economic circulation flows more smoothly.

As the world's second-largest economy and a major country with a population of over 1.4 billion, China has enormous potential and space to expand domestic demand, and these demands represent highly tangible needs. Let me provide some examples. In the consumer sector, China has 353 million cars and over 3 billion major household appliances, including refrigerators, washing machines and air conditioners. Following natural replacement cycles, this generates trillions of yuan in demand every year. Beyond durable goods, there is enormous new demand for consumer services such as entertainment, tourism and sports. The release of "Ne Zha 2" earlier this year and the thriving holiday tourism market demonstrate the vast potential of service consumption. In terms of investment, China's nationwide equipment assets have a net book value of approximately 40 trillion yuan. As high-quality development advances, annual investment demand for equipment renewal and upgrading will exceed 5 trillion yuan. According to industry estimates, the scale of China's AI industry surpassed 700 billion yuan in 2024, maintaining growth rates above 20% for multiple consecutive years. Future investment opportunities will continue to expand. China is also deepening the implementation of its new urbanization strategy. Each 1 percentage point increase in the urbanization rate can drive investment demand in the trillions of yuan. Take urban underground pipeline construction and renovation as an example: preliminary estimates show that approximately 600,000 kilometers of gas, drainage, and other pipelines will need upgrading and renovating over the next five years, generating about 4 trillion yuan in investment demand. We clearly have tangible and enormous potential for expanding domestic demand.

The specific approaches and methods for better leveraging domestic demand as the primary economic driver are clear: increase incomes for middle- and low-income groups, significantly boost consumption, expand effective investment, and strengthen domestic circulation. Going forward, the NDRC will earnestly implement the decisions and plans of the CPC Central Committee and the State Council, and take solid steps to advance work in three key areas. In terms of boosting consumption, we recently issued the second batch of trade-in program funding for this year. The first two batches total over 160 billion yuan, with approximately 140 billion yuan more to be disbursed gradually based on regional implementation progress. We will also establish and implement a child care subsidy system, create specialized re-lending facilities, and increase support for key service consumption sectors and elderly care industry development. At the same time, we will deepen the implementation of special initiatives to boost consumption and promptly introduce sector-specific measures. Guidance will be provided to cities with vehicle purchase restrictions to issue additional purchase quotas for priority groups such as families with long lottery wait times and car-free households. In terms of expanding investment, we will include industrial software upgrades and other updates within the scope of equipment renewal and trade-in policy support, accelerate investment in consumer infrastructure and social sectors, formulate and implement the "doubling" initiative for charging facilities, and support parking space construction in cities with permanent urban populations exceeding 3 million, particularly in super-large and mega cities. We will strive to release the complete 2025 project list for the implementation of major national strategies and security capacity building in key areas, along with central budget investment allocations, by the end of June. At the same time, new policy-based financial instruments will be established to address capital funding shortages in project construction. In terms of smooth circulation, we will accelerate the construction of a unified national market, conduct a six-month campaign to identify and remove market access barriers, accelerate the promulgation of the Private Sector Promotion Law, and help foreign trade enterprises expand domestic sales. Meanwhile, we will accelerate deep integration between technological and industrial innovation, establish a national venture capital guidance fund, and promote the deep integration of AI with 60 key industry sectors and 700 core application scenarios.

That's all I have to share. Thank you.