Deeply Grasp the Regularity Understanding of Expanding Domestic Demand

Firmly implementing the strategy of expanding domestic demand is a major deployment made by the Party Central Committee with Comrade Xi Jinping at its core, deeply grasping the laws of China’s economic operation and changes in the domestic and international environment. Since the 18th National Congress of the CPC, General Secretary Xi Jinping has delivered a series of important discourses on implementing the strategy of expanding domestic demand, profoundly answering major questions such as why and how to expand domestic demand under the conditions of a socialist market economy. The Proposal of the Central Committee of the Communist Party of China on Formulating the 15th Five-Year Plan for National Economic and Social Development, adopted at the Fourth Plenary Session of the 20th Central Committee of the CPC [1]1 The Fourth Plenary Session of the 20th Central Committee of the CPC was held in 2025, where the Proposal for the 15th Five-Year Plan (2026-2030) was adopted., emphasizes “adhering to the strategic fulcrum of expanding domestic demand” and “promoting positive interaction between consumption and investment, supply and demand, and enhancing the endogenous driving force and reliability of the domestic economic cycle.” The 2025 Central Economic Work Conference identified eight key tasks for economic work in 2026, with the top priority being “adhering to domestic demand-led development and building a strong domestic market.” China’s implementation of the strategy of expanding domestic demand adheres to the basic theories and analytical methods of Marxist political economy, is based on the reality of China’s economic operation and development, deeply summarizes the achievements of domestic and international macroeconomic theories and policies, conducts original analysis of economic circulation and supply-demand relations under the conditions of a socialist market economy, and forms a series of important regularity understandings. To continue promoting stable and healthy economic operation during the 15th Five-Year Plan period, it is necessary to deeply grasp the regularity understanding of expanding domestic demand.

坚定实施扩大内需战略，是以习近平同志为核心的党中央深刻把握我国经济运行规律和国内外环境变化作出的重大部署。党的十八大以来，围绕实施扩大内需的战略，习近平总书记发表一系列重要论述，深刻回答了社会主义市场经济条件下为什么要扩大内需、怎样扩大内需等重大问题。党的二十届四中全会通过的《中共中央关于制定国民经济和社会发展第十五个五年规划的建议》强调，“坚持扩大内需这个战略基点”“促进消费和投资、供给和需求良性互动，增强国内大循环内生动力和可靠性”。2025年中央经济工作会议确定了2026年经济工作要抓好的八个方面重点任务，其中排在首位的是“坚持内需主导，建设强大国内市场”。我国实施扩大内需战略，坚持马克思主义政治经济学的基本理论和分析方法，立足我国经济运行和发展的实际，深入总结国内外宏观经济理论和政策的成果，对社会主义市场经济条件下的经济循环和供求关系问题进行独创性分析，形成了一系列重要的规律性认识。“十五五”时期继续推动经济平稳运行、健康发展，必须深刻把握扩大内需的规律性认识。

Coordinate the relationship between aggregate supply and aggregate demand to smooth the national economic cycle. Supply and demand are two basic aspects of the internal relations of a market economy, and the relationship between them is a dialectical one of both opposition and unity. Without demand, supply cannot be realized, and new demand can give rise to new supply; without supply, demand cannot be met, and new supply can create new demand. China’s socialist economic system can effectively overcome the profound contradiction under the capitalist system between the unlimited expansion of production and the relatively narrow demand of the working people with purchasing power, providing strong support for market development. Implementing the strategy of expanding domestic demand requires coordinating the relationship between aggregate supply and aggregate demand, organically combining the strategy of expanding domestic demand with deepening supply-side structural reform. It is necessary to strengthen demand-side management, focusing on expanding consumption demand supported by income, investment demand with reasonable returns, and financial demand with principal and debt constraints, accelerating the cultivation of a complete domestic demand system; at the same time, deepen supply-side structural reform, address the structural mismatch between supply and demand in some areas, and use autonomous and controllable, high-quality supply to adapt to and meet existing demand, creating and leading new demand. Efforts should be made from both the supply and demand sides simultaneously, with coordination and cooperation, to form a higher-level dynamic equilibrium where demand drives supply and supply creates demand, achieving a virtuous cycle of the national economy.

统筹好总供给和总需求的关系，畅通国民经济循环。供给和需求是市场经济内在关系的两个基本方面，两者间是既对立又统一的辩证关系。没有需求，供给就无从实现，新的需求可以催生新的供给；没有供给，需求就无法满足，新的供给可以创造新的需求。我国实行的社会主义经济制度，能够有效克服资本主义制度下存在的生产无限扩大和劳动人民有支付能力的需求相对狭小的深刻矛盾，为市场的发展提供强有力支撑。实施扩大内需战略，必须统筹好总供给和总需求的关系，把扩大内需战略同深化供给侧结构性改革有机结合起来。既要加强需求侧管理，着力扩大有收入支撑的消费需求、有合理回报的投资需求、有本金和债务约束的金融需求，加快培育完整内需体系；又要深化供给侧结构性改革，解决部分领域供需结构性错配问题，以自主可控、高质量的供给适应满足现有需求，创造引领新的需求。要从供需两端同时发力、协调配合，形成需求牵引供给、供给创造需求的更高水平动态平衡，实现国民经济良性循环。

Adhere to domestic demand-led development and build a strong domestic market. Implementing the strategy of expanding domestic demand is an inherent requirement for maintaining the long-term sustained and healthy development of China’s economy and meeting the people’s ever-growing needs for a better life. Accelerating the cultivation of a complete domestic demand system is an important foundation for smoothing the national economic cycle and strengthening the dominant position of the domestic economic cycle. General Secretary Xi Jinping pointed out: “In today’s world, the scarcest resource is the market.” China has a population of over 1.4 billion, with a per capita GDP of over 10,000 US dollars, making it the world’s largest and most promising consumer market. The huge market size is a great advantage for China. Especially with the development of new technologies such as artificial intelligence, the optimization and upgrading of residents’ consumption combined with modern technology and production methods contains enormous growth potential. Therefore, it is necessary to seize the strategic fulcrum of expanding domestic demand, making production, distribution, circulation, and consumption rely more on the domestic market, and continuously improve the adaptability of the supply system to domestic demand.

坚持内需主导，建设强大国内市场。实施扩大内需战略，是保持我国经济长期持续健康发展、满足人民日益增长的美好生活需要的内在要求。加快培育完整内需体系，是畅通国民经济循环、增强国内大循环主体地位的重要基础。习近平总书记指出：“当今世界，最稀缺的资源是市场。”我国拥有14亿多人口，人均国内生产总值1万多美元，是全球最大最有潜力的消费市场，庞大的市场规模是我国的巨大优势，尤其随着人工智能等新技术的发展，居民消费优化升级同现代科技和生产方式相结合，蕴含着巨大增长空间。为此，必须抓住扩大内需这个战略基点，使生产、分配、流通、消费更多依托国内市场，不断提升供给体系对国内需求的适配性。

Enhance the fundamental role of consumption in economic development. Consumption is an important engine of China’s economic growth and a lasting driving force for economic development. Adapting to changes in the people’s needs, striving to run various livelihood undertakings well, and making the people’s lives better and better are the fundamental purpose of socialist production and the starting point and ultimate goal of smoothing the domestic economic cycle. General Secretary Xi Jinping pointed out: “The most fundamental way to expand consumption is to promote employment, improve social security, optimize the income distribution structure, expand the middle-income group, and solidly promote common prosperity.” It is necessary to combine expanding consumption with improving the quality of people’s lives, adapt to the actual needs of different income groups, and use high-quality supply to enhance residents’ consumption capacity and willingness. During the 15th Five-Year Plan period, based on the actual situation of China’s economic development, we should accelerate the cultivation of a complete domestic demand system, further strengthen demand-side management, release domestic demand potential, expand residents’ consumption, and raise the level of consumption, making the construction of a super-large domestic market a sustainable historical process.

增强消费对经济发展的基础性作用。消费是我国经济增长的重要引擎，是经济增长的持久动力。适应人民群众需求变化，努力办好各项民生事业，让老百姓日子越过越好，是社会主义生产的根本目的，也是畅通国内大循环的出发点和落脚点。习近平总书记指出：“扩大消费最根本的是促进就业，完善社保，优化收入分配结构，扩大中等收入群体，扎实推进共同富裕。”要把扩大消费同改善人民生活品质结合起来，适应不同收入群体实际需要，以高质量供给提高居民消费能力和意愿。“十五五”时期应根据我国经济发展实际情况，加快培育完整内需体系，进一步加强需求侧管理，释放内需潜力，扩大居民消费，提升消费层次，使建设超大规模国内市场成为一个可持续的历史过程。

Play the key role of investment. Investment is one of the most active factors in social reproduction and a key means of expanding reproduction and enhancing supply capacity. It can both form current demand and lay the foundation for future consumption expansion by creating employment and increasing income. To expand domestic demand, it is necessary to give full play to the fundamental role of consumption and the key role of investment, promoting positive interaction between consumption and investment. Adhere to the close integration of investment in things and investment in people, directing more resources to livelihood fields such as education, employment, medical care, and social security, and investing in people’s capacity enhancement, health maintenance, career development, and potential development, releasing consumption potential, guiding effective investment, continuously consolidating the foundation of domestic demand, and enhancing endogenous development momentum. Give play to the guiding and driving role of government investment and policy incentives for the whole society’s investment, effectively responding to economic cyclical fluctuations. Government investment should increase efforts in laying foundations, benefiting the long term, filling shortcomings, and adjusting structure. Relax market access for private investment, encourage and attract more private capital to participate in major national projects and projects to fill shortcomings. Comprehensively improve the investment environment, form good investment expectations, and stimulate the investment vitality of the whole society.

发挥投资的关键作用。投资是社会再生产中最活跃的因素之一，是扩大再生产、提升供给能力的关键手段，既能形成当期需求，又能通过创造就业、增加收入为未来消费扩张奠定基础。扩大内需，必须充分发挥消费的基础作用和投资的关键作用，促进消费和投资良性互动。坚持投资于物和投资于人紧密结合，将更多资源投向教育、就业、医疗、社会保障等民生领域，投入人的能力提升、健康维护、职业发展和潜力开发中，释放消费潜力、引导有效投资，不断夯实内需基础，增强发展内生动力。发挥政府投资和政策激励对全社会投资的引导带动作用，有效应对经济周期性波动。政府投资要在打基础、利长远、补短板、调结构上加大力度。放宽民间投资市场准入，鼓励和吸引更多民间资本参与国家重大工程和补短板项目建设。全面改善投资环境，形成良好投资预期，激发全社会投资活力。

Expanding domestic demand is a complex systematic project that requires comprehensive measures. In the process of social production and reproduction, the four links of production, distribution, exchange, and consumption are an interconnected whole. Among them, production is the starting point and the dominant link; distribution and exchange are intermediate links; consumption is the end point. Achieving the organic connection of the four links of social reproduction is key to smooth economic circulation. The development of production directly determines the supply capacity and degree of satisfaction of domestic demand; whether the strategy of expanding domestic demand can succeed ultimately depends on the level of development of production. The distribution system determines residents’ income levels and consumption capacity; it is necessary to improve the income distribution system and strengthen social security to enhance residents’ income levels and consumption capacity. Exchange is the intermediary for realizing the transfer of commodities from the production end to the consumption end; it is necessary to strengthen the construction of a modern circulation system, build a high-standard market system, and consolidate the important foundation of economic circulation. Consumption is the end point of social reproduction and also the starting point of new production; it is necessary to vigorously boost consumption and prioritize expanding consumption. Only by precisely unblocking the blockages in each link and enabling the organic connection of each link can smooth economic circulation be achieved.

扩大内需是一个复杂的系统工程，需要综合施策。社会生产和再生产过程中，生产、分配、交换、消费四个环节是相互联系的整体。其中，生产是起点，是起支配作用的环节；分配和交换为中间环节；消费是终点。实现社会再生产四个环节的有机衔接是经济循环畅通的关键。生产的发展直接决定内需的被供给能力与满足程度，实施扩大内需战略能否成功最终取决于生产的发展水平。分配制度决定居民收入水平和消费的能力，要完善收入分配制度、加强社会保障，增强居民的收入水平和消费能力。交换是实现商品从生产端到消费端的中介，要加强现代流通体系建设，建设高标准市场体系，夯实经济循环的重要基础。消费是社会再生产的终点，同时也是新的生产的起点，要大力提振消费，把扩大消费摆在优先位置。只有精准打通各环节堵点，使各环节有机衔接，才能实现经济循环畅通。

Improve the systems and mechanisms for expanding domestic demand. To cultivate a complete domestic demand system and smooth the domestic economic cycle, it is necessary to adhere to a problem-oriented approach, make full and good use of reform as the key move, break through stubborn diseases in systems and mechanisms through institutional innovation, and deeply tap the potential of domestic demand. Make effective institutional arrangements in rationally guiding consumption, savings, investment, etc., form a market-led endogenous growth mechanism for effective investment, and improve the long-term mechanism for expanding consumption. Formulate and implement plans to increase urban and rural residents’ income, raise the share of residents’ income in national income distribution, raise the share of labor remuneration in primary distribution, and achieve synchronization of residents’ income growth with economic growth and synchronization of labor remuneration growth with labor productivity growth. Improve the social security system, steadily promote the equalization of basic public services, and increase support for childbirth and child-rearing. Clean up unreasonable restrictions in the consumption field, expand the supply of high-quality goods and services, improve the systems and mechanisms for high-level opening up, better connect the domestic and international markets, and achieve a domestic economic cycle as the mainstay and mutual promotion of domestic and international dual cycles.

完善扩大内需体制机制。培育完整内需体系、畅通国内大循环，必须坚持问题导向，用足用好改革这个关键一招，通过制度创新破除体制机制中的顽瘴痼疾，深挖国内需求潜力。在合理引导消费、储蓄、投资等方面进行有效制度安排，形成市场主导的有效投资内生增长机制，完善扩大消费长效机制。制定实施城乡居民增收计划，提高居民收入在国民收入分配中的比重，提高劳动报酬在初次分配中的比重，实现居民收入增长和经济增长同步、劳动报酬提高和劳动生产率提高同步。健全社会保障体系，稳步推进基本公共服务均等化，加大生育养育支持力度。清理消费领域不合理限制措施，扩大优质商品和服务供给，健全高水平对外开放体制机制，更好联通国内国际两个市场，实现以国内大循环为主体、国内国际双循环相互促进。

(Author: Mao Xiaohua, Associate Researcher at the School of Marxism, Shandong University)

（作者：毛小骅，系山东大学马克思主义学院副研究员）