The promotion of technological innovation in firms requires both the supply-push and the demand-pull. To accurately identify, assess, and further enhance the incentive effects of the policies of government procurement for innovation in China, this paper uses the text analysis method to identify government procurement for innovation from more than 640,000 pieces of government procurement contracts and conducts an empirical analysis based on the data of China’s A-share listed firms from 2015 to 2020. The study finds that government procurement for innovation significantly promotes corporate innovation by increasing the expected market returns, reducing R&D uncertainty, and easing financing constraints. Specifically, local government procurement for innovation, central government procurement for innovation, and procurement for innovation by universities and research institutes bring more significant innovation incentives for firms; and government procurement for innovation generates stronger innovation incentives for firms in strategic and emerging industries, private firms, and small- and medium-sized enterprises. Further analysis reveals that demand-side innovation procurement and supply-side innovation subsidies generally have mutually reinforcing synergies on corporate innovation. The policy synergies vary depending on the levels of corporate innovation and the orders of policy implementation. In terms of the levels of corporate innovation, the two-sided policies has mutually complementary effects on innovation-leading firms and mutually exclusive effects on innovation-lagging firms. From the perspective of the orders of policy implementation, the strategy of supply-side subsidies first, and demand-side procurement second is more effective in promoting corporate innovation than the strategies of demand-side procurement first and supply-side subsidies second, and supply-side subsidies and demand-side procurement concur. This study helps deepen the understanding of demand-side innovation support policies and provides an important reference for further improvement of China’s innovation incentive policies.
Since the 18th National Congress of the Communist Party of China (CPC), the quality of China’s economic development has been continuously improved. However, the year 2022 witnessed a subdued economic growth rate. The triple pressures continue to evolve, with contraction in demand as the primary contradiction facing China’s macro economy in the short term. In contrast to major economies in the world, China grapples with a low economic growth-inflation index combination, a pace of economic expansion trailing behind its potential, and a mounting unemployment rate. The impact of supply on price increases weakens, while the global industrial and supply chains are amidst continuous adjustments. Both the consumer confidence index (CCI) and the purchasing managers’ index (PMI) remain low. The expectation for the depreciation of the RMB against US dollar is weakening. In 2023, China will continue to improve the financing environment and carry out a proactive fiscal policy. Simultaneously, there is a moderation trend in the trajectory of the interest rate of the Federal Reserve System hikes. Taken together, these factors (triple pressures) are expected to mitigate the contraction in demand, thereby steering the economy toward robust growth. However, it is crucial to recognize that low economic growth in the long term may compromise the quality of economic development. The year 2023 is the first year of accelerating Chinese modernization after the 20th National Congress of the CPC. China should integrate the strategy to expand internal demand with its efforts to deepen supply-side structural reform. This can foster the coordinated growth of both economic quality and speed, making a good start for Chinese modernization.
Based on the panel data of 30 provinces (autonomous regions, municipalities) in China from 2006 to 2019, the empirical study finds that the target values of economic growth expectation can promote high-quality economic development, and there is an inverted U-shaped relationship between elastic target constraints and high-quality economic development. The elastic constraints can reduce the investment rate and improve the total factor productivity (TFP), which promotes high-quality economic development, but its mediating effect accounts for a small proportion. With the improvement of the marketization degree, the inhibiting effect of elastic constraints on high-quality economic development reduces. The analysis of the heterogeneity between the new or old normal and the levels of economic development shows that in the future, developed regions should set high target values and low elastic constraints, and underdeveloped regions should set high elastic constraints on the target values of economic growth expectation.
The entropy method is used to measure the high-quality economic development levels of 30 provinces (autonomous regions, municipalities) in China from 2011 to 2020, and the impacts of factor price distortion, technological innovation, and their interaction terms on high-quality economic development are analyzed based on Tobit regression. The results show that high-quality economic development of 30 provinces (autonomous regions, municipalities) in China is on the rise; factor price distortion has an inhibitory effect on high-quality economic development, while technological innovation has a promoting effect on high-quality economic development, and both of them have a lag effect; technological innovation level can help alleviate the negative impact of factor price distortion on high-quality economic development; and sub-regional research shows that the inhibitory effect of factor price distortion on high-quality economic development in the east is significantly higher than that in the central and western regions, but the positive effect of technological innovation and the interaction terms between the two on high-quality economic development is significantly lower than that in the central and western regions. Accordingly, it is proposed to optimize top-level design for the two-wheel drive for high-quality economic development, strengthen the primary role of enterprises in innovation to promote high-quality economic development, and optimize the market-oriented allocation of factors to improve the efficiency of resource allocation.
Addressing the prolonged stagnation in household consumption growth in China is crucial for the successful implementation of the strategy to expand domestic demand. By constructing the upgrading index of consumption structure from 2002 to 2018, it is found that the overall upgrading trend of household consumption structure in China is accelerated after 2014. Theoretical analysis and empirical results indicate that, as household consumption structures rapidly upgrade with rising incomes in China, the primary factor limiting reasonable growth in household consumption is the insufficient effective supply resulting from a mismatch between the supply structure and the demand structure. As the adjustment of the supply structure depends on the continuous optimization of investment flow, expanding effective investment is the key driving force to improve effective supply, and it is also the existing component of expanding domestic demand. Further research shows that weakening investment convergence can significantly alleviate the insufficient effective supply caused by consumption upgrading. Enhancing the scientific anticipation of policy regulations and increasing the effectiveness of investments will be beneficial for realizing the strategy of expanding domestic demand.