Expanding domestic demand is crucial not only for economic stability but also for economic security; it is not a stopgap measure but a strategic move. The complexity, severity, and uncertainty of the external environment have risen significantly. The World Trade Organization (WTO) forecasts that the growth rate of global merchandise trade volume will be only 0.5% in 2026, substantially lower than the historical average, which increases the difficulty of maintaining stable economic operation in China.
Both the central government and the Jiangsu Provincial Committee's economic work conferences have placed domestic demand at the forefront of this year's economic agenda. Expanding domestic demand encompasses two core areas: domestic consumption and investment. Tapping into the potential of domestic demand requires precise efforts in both consumption and investment dimensions. From the consumption perspective, initiatives to boost consumption should start with the high-quality supply of goods and services, but more fundamentally, they must begin with enhancing residents' consumption capacity. In recent years, consumption's contribution rate to Jiangsu's economic growth has consistently remained above 50%, with total consumption volume leading nationally. On one hand, it is necessary to continue removing unreasonable restrictions on the supply side and expand the provision of high-quality goods and services. On the other hand, fundamentally expanding consumption requires the implementation of plans to increase the incomes of urban and rural residents, treating this as a medium-to-long-term plan that requires persistent and sustained effort. Simultaneously, strengthening support for childbirth and childcare, medical and elderly care security, and educational assistance will gradually improve residents' consumption expectations.
From the investment perspective, domestic demand mainly includes investments in people's livelihoods, manufacturing, and real estate. Jiangsu should effectively utilize central government policy tools such as special bonds and projects related to "two key areas," strengthen the driving role of major projects, and increase investment in weak links related to livelihood security. At the current stage, where the urbanization rate has already reached a high level, the role of urban renewal should be emphasized to compensate for the shortfall in real estate investment. It is essential to stimulate the vitality of private investment, guiding it more towards new quality productive forces and high-quality service industries, thereby empowering the expansion and quality improvement of domestic demand through effective investment.
There is a consensus that reform is needed to generate momentum for expanding domestic demand. Local governments need to shift more resources from attracting business investment to incentivizing resident consumption, and from infrastructure investment to investments in public welfare. Building a unified national market is an important institutional tool for solving this challenge. By implementing the requirements of "five unifications and one opening," breaking down local protectionism and market fragmentation, goods and services can flow smoothly nationwide. Relying on unified market rules and standardized infrastructure can not only effectively reduce transaction costs for businesses but also fully unleash the potential of domestic demand consumption through the advancement of market integration. Meanwhile, accelerating the shift of the consumption tax collection point to the consumption end and delegating it to local governments will restructure local fiscal incentives, making the improvement of people's livelihoods and the optimization of the consumption environment an endogenous driver of local development, thereby achieving a virtuous cycle between domestic demand expansion and market unification.
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