(ECNS) -- Outlining a number of key tasks for 2025, China’s annual Central Economic Work Conference urged efforts to vigorously boost consumption, improve investment efficiency, and expand domestic demand.
Experts believe that domestic demand expansion is key to addressing economic development insufficiencies.
Domestic demand expansion is necessary for sustained and stable growth
Expanding domestic demand is an extraordinary policy amid unusual circumstances, experts said.
Zhang Yongjun, secretary general of the China Center for International Economic Exchanges, said China's economy maintained a growth rate of around five percent in 2024, driven by external demand. But amid intensifying geopolitical conflict and changes in tariff policies, global industrial chains, supply chains and even the world economy may be disrupted in 2025, he noted.
“External demand may weaken in the coming year, thereby, expanding domestic demand is necessary for China to maintain sustained and stable growth,” said Zhang.
Such expansion, alongside the construction of a super-sized domestic market serves as a long-term and fundamental measure to promote Chinese modernization, commented Guo Liyan, a researcher with the Chinese Academy of Macroeconomic Research.
Jia Kang, president of the China Academy of New-Supply Side Economics, pointed out that China’s current macro policies offer great opportunities for the expansion of both domestic demand and effective investment. He noted that financial resources could tilt toward the construction and upgrade of infrastructure and public goods.
“This will not only optimize the economic structure, but also help promote employment and release consumption potential,” said Jia, adding that such public initiatives and high-quality assets are conducive to maintaining upward growth momentum.
Key measures to domestic demand expansion
Experts believe that expanding effective investment, unleashing consumption potential, and relieving public doubts regarding consumption should be fully taken into account.
In Jia’s view, domestic demand expansion should first focus on expanding effective investment, which will promote employment and increase incomes. Basic public services and social security should also be strengthened, he said. Besides, a more standardized and sound factor market should be in place to guarantee property income.
Zhang highlighted the necessity to find new growth points. He explained that China's consumption expansion is mainly driven by consumer durables such as home appliances and automobiles, but next year it may be geared toward the service industry.
Expanding opening-up is another method to enlarge domestic demand, he said, adding that China’s visa-free policy for many countries will stimulate consumption demand thanks to foreign tourists traveling to China.
The key to expanding domestic demand is to boost consumption and enhance the effectiveness of investment, therefore, creating a virtuous cycle that enables mutual benefit, said Guo. This will consolidate and enhance the role of domestic demand in supporting nationwide economic circulation, she added.
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