Demand and supply must "walk on two legs"

In this year's government work report, the two parts of "strengthening supply-side structural reform and strengthening the driving force for sustained growth" and "tapping the potential of domestic demand to open up more space for development" are equal in weight. Some representatives and committee members from economic circles believe that this deployment fully reflects the central government's strategic thinking of "making efforts to strengthen supply-side structural reform while moderately expanding aggregate demand."

Emphasizing both supply and demand, such as walking on two legs, is a balanced relationship between economic analysis and macro-management. For a large developing country like China, we should not only speed up supply-side reform to solve structural problems, improve total factor productivity, achieve sustained economic growth and long-term prosperity, but also strengthen demand-side management to solve the total problem. "brake" for economic decline, "ignition" for stable growth, and then form a stable and lasting domestic demand support. An objective analysis of the current Chinese economy shows that insufficient effective supply and insufficient effective demand exist at the same time. Some economists have pointed out that if it is only insufficient supply, then whether it is "effective" or "ineffective", it should be reflected in the rise of the price index. But the reality is that PPI growth has been negative for four consecutive years, and the CPI growth rate reached a six-year low in 2015, which obviously can not be simply explained by "insufficient effective supply". The problem of insufficient demand is also serious. Therefore, while speeding up supply-side reform, the work of tapping the potential of domestic demand must not be relaxed for a moment.

It is necessary to strengthen the fundamental role of consumption in stimulating economic growth. Among the driving forces of steady growth, the scale of consumer demand is the largest and is most directly related to people's livelihood. To release the consumption potential, it is necessary to further optimize the consumption environment, while stabilizing traditional consumption, continue to cultivate and expand new consumption hot spots, such as pension, health, tourism, education, entertainment and so on. Of course, this is inseparable from supply innovation, removing policy barriers, increasing the supply of goods and services in the market, and activating to meet multi-level consumer demand, which can provide more choices for consumption upgrading.

We should give full play to the key role of effective investment in stabilizing growth and adjusting the structure. Some time ago, the responsible comrade of the National Development and Reform Commission put forward the need to "justly grasp investment." This signal indicates that it is not advisable to rely too much on investment, nor is it advisable to neglect or underestimate the role of investment. We should study and sum up past experiences and lessons, and actively expand effective investment in infrastructure, shortcomings in the areas of people's livelihood and new types of urbanization, such as the construction of urban underground corridors, rail transit, smart grid, all kinds of pollution control, accelerating the citizenization of agricultural transfer population, promoting the construction of public service facilities, and so on. It should be noted that on the one hand, public investment should improve efficiency and rational distribution, on the other hand, it should also mobilize the enthusiasm of social investment, and at the same time strengthen the convergence and coordination of fiscal, monetary, investment, industrial, price and other policies. to form a superimposed and magnifying effect of increasing effective demand.