"The NDRC will work with relevant authorities to promptly roll out and implement incremental policies, promote coordinated effects of existing and new policies, leverage the integrated impact of macroeconomic policies, and strive for a good start to the 15th Five-Year Plan period," said Zuo Gang, Deputy Director-General of the Department of National Economic Integration of the National Development and Reform Commission (NDRC), at a press briefing on October 20.

A reporter from the Shanghai Securities News learned at the briefing that the NDRC, together with relevant departments, will adopt stronger and more concrete measures to effectively expand domestic demand going forward. The NDRC is researching and formulating the Implementation Plan for the Strategy of Expanding Domestic Demand (2026–2030) and will accelerate its issuance and enforcement.

Domestic Demand Continues to Serve as the Main Engine for Economic Growth

"Since the beginning of this year, domestic demand has continued to function as the primary driving force and stabilizer of economic growth, contributing 74.8% to economic growth in the first three quarters," Zuo Gang noted.

On the consumption front, the total retail sales of consumer goods and services rose by 2.6% year on year. On the investment side, the structure keeps improving. Investment in emerging industries as well as equipment renewal and transformation maintains sound growth momentum. Investment in intellectual property products increased by 9.3% year on year, investment in high-tech industries by 4.9%, and equipment investment by 9.7%.

"Major projects including the Yaxia Hydropower Project and the Sichuan-Tibet Railway are advancing in an orderly manner. The Pinglu Canal has been completed and put into trial navigation. Construction has started on the main works of the new water transport corridor of the Three Gorges Project and the new Guangzhou Airport," Zuo Gang disclosed. Recently, a quota of RMB 250 billion in accumulated unused local government special bond funds has been unlocked to support effective investment expansion in key areas such as the construction of the "Six Networks".

Combining investment in physical assets with investment in human capital and actively expanding effective investment constitutes a key approach to expanding domestic demand. Zuo Gang stated that authorities will advance the 109 major projects outlined in the 15th Five-Year Plan and the planning and construction of the "Six Networks" in a coordinated manner, and organize demonstration scenarios for the integrated development of the six networks. Funds from ultra-long-term special treasury bonds will be well utilized, and the disbursement of funds under new policy-based financial instruments will be accelerated to scale up support for shoring up weaknesses and strengthening strengths in people’s livelihood, scientific and technological innovation, industrial upgrading, security and resilience.

Accelerated Growth of New Growth Drivers Delivers Stronger Impetus

"New" is another keyword for China’s economy. New growth drivers are expanding at a faster pace and generating greater spillover effects. Statistics show that new growth drivers including high-end manufacturing, the intelligent economy and modern services contributed more than 40% to economic growth in the first three quarters.

In key sectors, breakthroughs have been made in tackling core and critical technologies for integrated circuits, and China ranks first worldwide in mature process production capacity. The global cumulative downloads of open-source AI large models have exceeded 10 billion. China accounts for over 90% of the global humanoid robot shipments. Outbound technology licensing of innovative drugs reached USD 130 billion in the first three quarters, close to the full-year figure of last year. The penetration rate of new energy vehicles hit 53.6%.

"The growth and expansion of emerging industries can not only directly optimize industrial structure but also accelerate the upgrading of traditional industries and foster more new growth drivers," said Ren Zhongbao, Deputy Director-General of the Department of Innovation and High-Tech Development of the NDRC. "During the 15th Five-Year Plan period, six sectors featuring high growth potential, advanced technologies and wide application coverage — integrated circuits, aerospace, biomedicine, low-altitude economy, new energy storage and intelligent robots — will be prioritized to become emerging pillar industries, so as to rapidly expand new growth drivers."

On October 20, the NDRC, together with relevant authorities, rolled out the first batch of 136 landmark major application scenario projects, which will serve as an important anchor for cultivating and opening up application scenarios. Li Chao, Deputy Director-General of the Policy Research Office and Spokesperson of the NDRC, remarked that this will further unlock the strengths of China’s super-large market and complete industrial system, facilitate deep integration of scientific and technological innovation with industrial innovation, and bring more cutting-edge technologies that once seemed unattainable onto production lines and into ordinary households.

Promoting Synergy Between Existing and Incremental Policies

Against a backdrop of deepening external shocks, prominent domestic imbalance marked by strong supply and weak demand, obvious industry divergence, and a fragile foundation for steady economic recovery, Zuo Gang said solutions will always outnumber difficulties. The NDRC will work with relevant authorities to introduce and implement incremental policies in a timely fashion, push for coordination between existing and new policies, maximize the combined effects of macro policies, and secure a good start for the 15th Five-Year Plan period.

On the one hand, the effectiveness of existing policies will be further enhanced. Authorities will coordinate the launch of major projects under the 15th Five-Year Plan and the implementation plan for the "Six Networks", deliver high-quality project preparation, review the progress of preliminary work for projects yet to break ground one by one, strengthen factor guarantee, streamline approval procedures, and coordinate relevant parties to speed up the disbursement of funds under new policy-based financial instruments. The vitality of private investment will be unleashed by introducing private capital into major nuclear power, hydropower and water conservancy projects. Policies covering the full industrial chain to boost key industries and optimize the layout of computing infrastructure will be better implemented. Systematic inspections, evaluation, renovation and upgrading of aging reservoirs will be carried out across the board, construction of early-launch projects will be accelerated, and the development of high-standard grain depots and upgrading of existing warehouse facilities will continue.

On the other hand, pragmatic and effective incremental policies will be rolled out promptly. Authorities will ensure the delivery of recently launched incremental policies, including cuts to the interest rate of the pledged supplementary lending, expansion of reloan quotas, interest subsidies for residential housing loans, and financial support for the service sector, to generate results at an early date.

Source: Shanghai Securities News