Demand-side reform will be key factor to boost economy

The CPC Central Committee recently held the annual Central Economic Work in which the CPC outlined the importance of making further reform in demand-side for the purpose of stimulating economic development in 2021 .

This proposal, labeled the first to stress "demand-side reform" by the CPC in recent years, tells us the significant meaning of this new policy for China's economy.

We know that in the last two decades, we had mainly followed a policy of taking supply-side reform which made a great contribution to deal with challenges from the international market. By improving our supply-side structure, China successfully restructured its industrial and product bases, enhancing its capability to supply all goods to the international market. China's trade volume sharply increased and reached to over 30 percent of total world trade volume by end of 2019. More than that, China has become the largest import and second-largest manufacturing country, and supplies more than 250 nations and regions all over the world. China's service supply chain contributed over 60 percent of China's GDP, which became the main engine to boost China's economy in a stable and sustainable mode.

But protectionism and unilateralism became dominant in some major Western countries, especially the US and few European nations, which tried to block and contain China's rapid rejuvenation and used all efforts to try and stop China from developing its modernization. These actions have seriously hurt the ability of China's supply chain and its high efficiency to meet the needs of the world market, especially for those Chinese high technology companies that have been wiped off of the supplier list by western countries. This unfair policy has surely heavily damaged China's supply side and brought a big gap between the supply chain and demand side.

So it's the right time to build up and strengthen the demand-side to meet the new pressure from the international market for its decreasing demand. China must take necessary measures to switch its focus toward the domestic market and overcome the gap between the supply and demand sides in the domestic market. So it became the logical step for China to restress the importance of demand-side reform.

China will encourage dual-circulation development patter to achieve better coordination between domestic and international demands, keep it well-balanced and manage to benefit the needs of the people.

Demand-side reform should include three main factors, including upgrading the quality of products and goods to attract more potential consumers; improving the diversity of goods for consumers to have a better chance of choosing their ideal products and maintaining enthusiasm for more investment in the market, enhancing the sustainability of demand-side reform.

Official data showed that China's consumer spending already contributed 57.8 percent to GDP growth in 2019, as the country's consumer scale and supply capacity continuously expanded.

Besides, the rapid expansion of China's middle-income group could have potentials to boost domestic consumption.

All this data showed us the fantastic reality of the Chinese domestic market that will surely bring China to a bright and prosperous future.

China will fulfill its obligation and commitment to lift the whole nation out of poverty and realize a moderately wealthy society in 2021, and China will start its first year into 14th Five-Year Plan (2021-25).

With full confidence, we will do whatever we can to facilitate the progress and dynamically strive for a better life for our people.

The author is a senior fellow at the Chongyang Institute for Financial Studies of Renmin University of China.

The opinions expressed here are those of the writer and do not necessarily represent the views of China Daily and China Daily website.