Logic and Path of Combining Domestic Demand Expansion with Deepening of Supply-Side Structural Reform

Abstract

The fifth plenary session of the 19th Central Committee of the Communist Party of China (CPC) puts forward the organic combination of the implementation of the domestic demand expansion strategy with the deepening of supply-side structural reform, and scientifically reveals the internal logic of this organic combination and the realization paths, which is of great significance to the implementation of the new development concept and the construction of a new development pattern. First, this paper provides a theoretical explanation for the organic combination of the domestic demand expansion strategy with the supply-side structural reform by analyzing why the traditional policies for expanding domestic demand are ineffective in the new development stage of China. Second, this paper elaborates the internal logic of this organic combination from two aspects. (1) The base point of the domestic demand expansion strategy must be placed under the main line of the supply-side structural reform. (2) The two should be interconnected and are mutually reinforcing, so as to form a higher level of dynamic equilibrium in which the demand leads the supply and the supply creates the demand. Third, this paper analyzes the huge space for the organic combination of the domestic demand expansion strategy with the supply-side structural reform from the perspective of releasing consumption potential and creating new demand, and on that basis proposes the realization paths of their organic combination.

Keywords

domestic demand expansion strategy / supply-side structural reform / organic combination / internal logic / realization path

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