Investing in People Is Work That Lays Foundations, Benefits the Long Term, and Builds Momentum for the Future

At the opening ceremony of a study session for leading officials at the provincial and ministerial levels on implementing the spirit of the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China, General Secretary Xi Jinping pointed out: “We must closely integrate improving people’s wellbeing with boosting consumption, and investing in things with investing in people.” [1]1 The Fourth Plenary Session of the 20th Central Committee of the CPC, held in July 2024, focused on further deepening reform and advancing Chinese-path modernization. The insistence on closely integrating investment in things with investment in people represents our Party’s deepened understanding of the laws governing economic work under the new circumstances. We must comprehend the strategic intent of the Party Central Committee’s proposal to invest in people from the overall perspective of the Party’s and the state’s undertakings, fully activate the dividend of human capital, promote the close integration of investing in things and investing in people, and better support the great cause of building a strong country and achieving national rejuvenation.

习近平总书记在省部级主要领导干部学习贯彻党的二十届四中全会精神专题研讨班开班式上指出：“坚持惠民生和促消费、投资于物和投资于人紧密结合”。必须坚持投资于物和投资于人紧密结合，是我们党对做好新形势下经济工作规律性认识的深化。我们要从党和国家事业全局的高度深刻理解党中央提出投资于人的战略意图，充分激活人力资本红利，推动投资于物和投资于人紧密结合，更好支撑强国建设、民族复兴伟业。

From a developmental perspective, human capital is an important variable affecting the long-term sustainable growth of the economy. Looking back at the course of world economic development, a country’s evolution from a low-income stage to a high-income stage invariably involves a gradient upgrading of its human capital structure. Some Western capitalist countries that have entered the ranks of high-income nations are closely linked to the universalization of upper secondary education. Since the 16th century, Italy, Britain, France, Germany, and the United States first became global education centers and then global science and technology centers. [2]2 The reference to Italy, Britain, France, Germany, and the United States becoming global education centers before becoming science and technology centers is a historical generalization drawn from the author’s reading of the rise of these nations as scientific and industrial powers. The common feature of countries in Southeast Asia, Latin America, and other regions that have failed to cross the “middle-income trap” is that they have not formed a human capital structure dominated by highly skilled workers, falling into the quagmire of “low human capital—low efficiency improvement—low consumption structure—low industrial structure.” [3]3 The “middle-income trap” is a term used in development economics to describe economies that stagnate after reaching middle-income levels, unable to compete with either low-wage or high-innovation economies. Currently, China is in a critical period of consolidating the foundation and making comprehensive efforts to basically achieve socialist modernization. Using scientific and technological innovation to lead the development of new quality productive forces urgently requires strengthening talent support. The 20th National Congress of the CPC proposed building a strong education system and a strong talent pool by 2035, and the Fourth Plenary Session of the 20th Central Committee proposed coordinating the construction of a strong education system, a strong science and technology system, and a strong talent pool, highlighting the strategic, pioneering role of a strong education system and a strong talent pool and their supporting role in advancing and expanding Chinese-path modernization. It can be said that investing in people is precisely the key point for transforming China’s population size advantage into a talent quality advantage.

从发展角度看，人力资本是影响经济长期可持续发展的重要变量。回顾世界经济发展历程，一国由低收入阶段向高收入阶段演进，都会经历人力资本结构梯度升级。一些西方资本主义国家进入高收入国家行列，与实现高中阶段教育全面普及密切相关。16世纪以来，意大利、英国、法国、德国、美国都是先成为全球教育中心，然后成为全球科技中心。东南亚、拉美等地区没有跨越“中等收入陷阱”的国家，共同点都是未能形成高层次劳动者主导的人力资本结构，陷入了“低人力资本—低效率改进—低消费结构—低产业结构”的泥潭。当前，我国处于基本实现社会主义现代化夯实基础、全面发力的关键时期，以科技创新引领新质生产力发展，迫切需要强化人才支撑。党的二十大提出到2035年建成教育强国、人才强国，党的二十届四中全会提出统筹教育强国、科技强国、人才强国建设，凸显了教育强国、人才强国的战略先导地位和对推进拓展中国式现代化的支撑作用。可以说，投资于人正是将我国人口规模优势转化为人才质量优势的关键点。

Investing in things and investing in people are an organic whole that supports and empowers each other. Only when the two are closely integrated can a powerful synergy be formed to promote high-quality economic and social development. Since the 18th National Congress of the CPC, China has built the world’s largest education system, providing solid talent support and intellectual guarantees for the construction of a modern industrial system. In the past period, China’s economic development mainly relied on factor-driven and investment-driven growth, and the rate of return on investing in things has declined in recent years. To promote the transformation of China’s economic growth momentum mechanism and achieve innovation-driven and demand-driven growth, it is urgent to further increase efforts to invest in people, form a “human capital dividend,” promote the coordination and mutual reinforcement of investing in things and investing in people, and continuously cultivate new drivers of economic growth.

投资于物和投资于人是相互支撑、双向赋能的有机整体，只有二者实现紧密结合，才能形成推动经济社会高质量发展的强大合力。党的十八大以来，我国建成世界上规模最大的教育体系，为现代化产业体系建设提供了坚实有力的人才支撑与智力保障。过去一段时间，我国经济发展主要依靠要素驱动、投资拉动，投资于物回报率近年来有所下降。要推动我国经济增长动力机制转换，实现创新驱动、需求拉动，亟须进一步加大投资于人力度，形成“人力资本红利”，促进投资于物和投资于人协同配合、相得益彰，不断培育经济增长新动能。

Investing in people is not only an important measure for ensuring and improving people’s livelihoods but also an important way to smooth economic fluctuations and strengthen macroeconomic regulation. From the perspective of development goals, economic development is ultimately aimed at achieving the people’s well-being and security; investing in people is an important measure to enhance people’s welfare and promote the all-round development of the individual. From the perspective of the development process, during periods of economic expansion, investing in people can increase the supply of high-quality labor; during periods of economic contraction, through current-period adjustments, staggered-period reserves, and cross-period releases, investing in people can play a counter-cyclical and cross-cyclical regulatory role. At the end of the last century, in the face of the impact of the Asian financial crisis, China launched a large-scale expansion of university enrollment, which not only alleviated employment pressure but also reserved tens of millions of high-quality talents for China’s economic takeoff in the 21st century. [4]4 The Asian financial crisis began in Thailand in 1997 and spread across East and Southeast Asia. China’s university enrollment expansion, initiated in 1999, dramatically increased the number of college students. Currently, changes unseen in a century are accelerating, and the world is experiencing turmoil and increasing instability. The momentum of the international cycle, in which China’s markets and resources were “both ends abroad,” has significantly weakened, and the structural contraction of external demand space has become a long-term trend. Against this backdrop, increasing investment in people’s livelihoods such as education, healthcare, care for the elderly and young children, and social security can not only provide greater security for the broad masses of the people amid the uncertainty of the external environment but also, by accelerating the shaping of modern human resources, stimulate demand-side vitality, increase improvement-oriented consumption demand, nurture new effective investment, effectively offset the demand gap caused by shrinking external demand and slowing investment, and promote a positive interaction between consumption and investment, and between supply and demand.

投资于人既是保障和改善民生的重要举措，也是熨平经济波动、加强宏观调控的重要方式。从发展目的看，经济发展最终是为了实现人民幸福安康，投资于人是提升人民福祉、促进人的全面发展的重要举措。从发展过程看，在经济扩张阶段，投资于人可以增加高素质劳动力供给；在经济收缩阶段，通过当期调整、错期储备、跨期释放，投资于人可以发挥逆周期和跨周期调节作用。上世纪末，面对亚洲金融危机冲击，我国启动大规模高校扩招，既缓解了就业压力，又为21世纪中国经济腾飞储备了数千万高素质人才。当前，百年变局加速演进，世界变乱交织、动荡加剧。我国市场和资源“两头在外”的国际大循环动能明显减弱，外需空间的结构性收缩已经成为长期趋势。在此背景下，加大教育、医疗、“一老一小”、社会保障等民生领域投入，不仅可以在外部环境的不确定性中给广大人民群众带来更多保障，而且可以通过加快塑造现代化人力资源，激发需求侧活力，增加改善型消费需求，孕育新的有效投资，有效对冲外需萎缩和投资放缓带来的需求缺口，促进消费和投资、供给和需求良性互动。

The return on investing in people runs through the entire life cycle of workers, characterized by current investment, long-term appreciation, and multi-party benefits. Unlike physical capital, once human capital is formed, it is integrated with the person, does not diminish with use, but rather continues to appreciate through repeated practice. Investing in people also has a distinct spillover effect. By increasing investment in areas such as education, health, and social security, it not only enhances people’s capacity for all-round development but also spills over into improvements in enterprise efficiency, industrial structure upgrading, and social civilization and progress, transforming into a lasting driving force for economic growth. Therefore, investing in people is work that lays foundations, benefits the long term, and builds momentum for the future. Its value formation has a significant long-cycle characteristic, often taking more than a decade or even decades to show results. China has the institutional advantage of concentrating resources to accomplish major tasks. Scientifically formulating and successively implementing five-year plans is an important experience of our Party in governing the country, highly consistent with the value orientation and inherent laws of investing in people. We must correctly handle the relationship between short-term macroeconomic balance and long-term sustainable growth, maintain historical patience and strategic resolve, make investing in people a more distinct reform orientation, deeply embed investing in people into the economic and social policy system, promote the establishment and improvement of a long-term mechanism for investing in people, comprehensively raise the level of human capital investment, and drive high-quality economic and social development.

投资于人的回报贯穿劳动者全生命周期，具有当期投入、长期增值、多方受益的特点。和物质资本不同，人力资本一旦形成，便与人融为一体，不随使用而损耗，反而在反复实践中持续增值。投资于人还具有鲜明的外溢性，通过加大教育、健康、社会保障等领域投入，不仅提升人的全面发展能力，而且外溢为企业效率提升、产业结构升级、社会文明进步，转化为经济增长持久动力。因此，投资于人是一项打基础、利长远、增后劲的工作，其价值形成具有显著的长周期特征，往往要十几年甚至几十年才能看到成效。我国具有集中力量办大事的制度优势，科学制定和接续实施五年规划是我们党治国理政一条重要经验，高度契合投资于人的价值导向和内在规律。我们要正确处理宏观经济短期平衡和长期可持续增长之间的关系，保持历史耐心和战略定力，把投资于人作为更加鲜明的改革取向，将投资于人深度嵌入经济社会政策体系，推动建立健全投资于人的长效机制，全面提高人力资本投资水平，带动经济社会高质量发展。