Increasing people's incomes key to consumption

Editor's note: China's Government Work Report released on Thursday listed the expansion of domestic demand as a priority. National Business Daily spoke to Ma Jiantang, former secretary of the Party Leadership Group of the Development Research Center of the State Council, on how long-term mechanisms can be established to boost consumption. Below are excerpts of the interview. The views don't necessarily represent those of China Daily.

The government is committed to creating over 12 million urban jobs this year, demonstrating its resolve to increase people's income through employment. But policies should be tailored to different groups. For young people, encouraging innovation and entrepreneurship is one way to help increase their income.

Strengthening the social security system is equally important. The government should provide greater income support through cash transfers and consumption subsidies to retirees and vulnerable groups who are no longer able to work, reflecting the people-centered nature of the socialist system.

China's relatively high savings rate and comparatively low consumption are partly cultural, but they also reflect people's concerns about future expenses. Increasing government investment in services for both the elderly and children, such as childcare, education, healthcare and elderly care, can help ease these concerns and make households more willing to spend.

In recent years, consumption among young people has displayed new characteristics, with branded products and events such as rural sports competitions attracting widespread enthusiasm and stimulating spending. These examples suggest that well-designed consumption scenarios can also effectively unleash consumer potential.

Plus, the consumption needs of those aged between 60 and 70 deserve greater attention. Their demand spans healthcare services, tourism and opportunities for continued learning or pursuing hobbies. Addressing these needs may require policy adjustments, such as improving vacation arrangements to support tourism or allowing greater participation of foreign-funded hospitals to enhance healthcare services.

High-quality consumer demand has not yet been fully met, especially in the area of services. In sectors such as high-quality childcare, education and healthcare, long waiting times and reliance on personal connections indicate insufficient supply and institutional barriers. Expanding market access and encouraging both private and foreign investment in these areas would help increase the availability of high-quality services to better meet people's needs.

Investment should also not be overlooked. Expanding the supply of services, meeting consumption demand, building new infrastructure and improving people's quality of life all require substantial investment. While the scale of funding arrangements is significant, the key lies in improving investment efficiency and ensuring that funds are used effectively.

Future investment should therefore combine investment in physical assets with investment in people. On the one hand, major infrastructure projects should continue to advance.

On the other hand, greater attention should be paid to investment across the entire life cycle, covering childbirth, child care, education, training, employment, elderly care and even end-of-life care. Such efforts involve not only physical infrastructure but also institutional and social investment.