Policy document maps the way to fostering stronger domestic demand, promoting stability

China has mapped out an outline for boosting domestic consumption and fostering a stronger domestic market, with a view to promoting the nation's high-quality development and long-lasting stability.

The document, which was jointly released by the Communist Party of China Central Committee and the State Council and was made public on Wednesday, specified the long-range objectives for implementing the strategy of increasing domestic demand from 2022-35.

Released amid multiple pressures from COVID-19 outbreaks and a grimmer, more complicated international environment, the outline will help expand effective investment, spur consumption and foster the new development paradigm, experts said.

"There is an urgent need for China to expand domestic demand, as external demand could deteriorate next year due to a slowdown of the world economy," said Liu Chunsheng, an associate professor at the Central University of Finance and Economics. "Boosting domestic demand is therefore not only essential for longer-term economic restructuring but for ensuring steady economic growth in the short run."

Resolutely implementing the strategy of expanding domestic demand and fostering a holistic domestic demand system are essential to stepping up the building of a new development paradigm, in which the domestic market is the mainstay and the domestic and international markets reinforce each other. They also represent strategic decision-making to promote the country's long-term development and enduring stability, according to the outline.

The outline said that by 2035, the size of the nation's consumption and investment will be elevated to a new stage, a holistic domestic demand system will be formed and in full swing, the new type of industrialization, information technology applications, urbanization and agricultural modernization will be basically realized, and the construction of a stronger domestic market will have made great headway.

It said that by 2035, core technologies in key fields will make significant breakthroughs, and innovation-driven domestic circulation that is propelled by domestic demand will be more efficient.

The outline also said that by 2035, people's incomes will be raised significantly, the gap between urban and rural development will have noticeably narrowed, the middle-income group will be expanded, and the common prosperity of all the people will see substantial progress.

It highlighted the greater role of reform in promoting the growth of domestic demand, saying that by 2035, the high-standard market system will be fully improved and the modern circulation system will be built up. China will get much stronger in participating in global economic cooperation and competition, and the global influence of China's domestic market will be significantly improved, it added.

The document made clear that the nation will implement the strategy of expanding domestic demand while deepening supply-side structural reform and will boost the dynamism and reliability of the domestic economy while engaging at a higher level in the global economy, experts said.

Luo Zhiheng, chief economist at the research institute of Yuekai Securities, said that boosting domestic demand will serve as a key driver for fostering China's high-quality growth in the next few years. This will help fully unleash consumption potential, expand effective investment, build a strong domestic market and promote industrial upgrading, Luo added.

The outline also set out the short-term goals for carrying out the strategy of expanding domestic demand through 2025, including how to promote consumption and investment, unleash domestic demand potential, improve the market system and facilitate the dynamism of the economy.