Consumption supports a unified national market
The Yangzhou Port in Jiangsu Province facilitates supply chains’ resilience, May 13. Photo: CFP
The domestic market is the foundation of a country’s economic development, supporting the circular flow of production, distribution, circulation, and consumption. It reflects a country’s level of openness and international competitiveness. Consumption can not only effectively drive the expansion of market scale, and changes in production and lifestyles, but also shift the economic development model and enhance the domestic market’s influence. The guideline on accelerating the establishment of a unified domestic market, jointly issued by the Communist Party of China Central Committee and the State Council, eyes a comprehensive push for the country’s market to shift from being big toward becoming powerful. Consumption support is an objective requirement for building a unified national market.
China urgently needs to start with the market system, market environment, industrial structure, business model, and opening up to the outside world, to promote the comprehensive development of consumption and the formation of a powerful domestic market.
We should improve the market system to stimulate consumption and consolidate the factorial foundation of our large domestic market. Development of the labor market supports the growth of consumer markets. It is necessary to deepen reform of the household registration system, guide the orderly flow of labor factors, and enhance the consumption capacity of urban and rural residents by expanding employment.
At present, market segmentation still exists in China, with large disparities between regions and urban and rural areas, which reduces effects of scale. To build a unified, open, competitive, and orderly domestic market, we should focus on breaking local protectionism and market barriers, accelerate the planning of the unified domestic market and its standard system, and promote the free flow and efficient allocation of products and factors of production.
We can achieve economies of scale by optimizing the consumption structure and upgrading consumer services to realize simultaneous growth in the quality and quantity of our large domestic market. At present, China’s economic development has reached a new stage where we rely on the domestic market to enhance international competitive advantages. The large scale of the consumer market can not only bring an innovation-testing ground for production enterprises, but also effectively reduce the marginal cost of production and achieve economies of scale.
We should support service consumption upgrades with service industry development. As industrialization progresses, the service industry’s importance to the economy will continue to rise. We will adjust the industrial structure, improve the investment structure, innovate product technology, and develop services that suit the needs of each consumer group, optimize effective supply, and promote growth in service consumption.
We should develop new business forms and models to consolidate the foundations for consumption. Digital technology innovation will bring more market changes. At present, the total amount and growth rate of China’s digital economy are among the highest in the world. Integration of the digital economy and the real economy has accelerated. Data has become an important factor of production, providing a new driving force for economic circulation. We should comply with development trends for the new round of sci-tech revolution, accelerate the development of new technologies, activate the potential of data factors, promote construction of integrative and innovative digital infrastructure, and promote its applications in new scenarios.
We should improve the level of opening up, enhance the attractiveness of consumer markets, and create a sound external environment for the domestic market’s development. The growth of the domestic market is inseparable from close relationships with international markets in the fields of trade, investment, finance, and the flow of natural persons. With our continuous improvement of the level of opening up, China has become the world’s largest exporter of goods and the second largest importer of goods. China’s economy is the backbone of economic globalization and expands the space for world economic growth. Expanding opening up will further enhance the influence of China’s market.
We should further promote high-level opening up, relax market access in service fields, create a good business environment, enhance China’s attraction to technology, talent, and funds in international markets, and form a “siphon effect” drawing in various high-quality factors at home and abroad. We should build the central cities of international consumption into an important window for China’s opening up, highlighting the comprehensive strength of China’s history, culture, and modern commercial civilization, and enhance its attractiveness to overseas tourists.
Guan Lixin is the deputy director of the Institute of Circulation and Consumption at the Chinese Academy of International Trade and Economic, the Ministry of Commerce.
Edited by ZHAO YUAN