Economy

Persist in focusing the development of the economy on the real economy

2026-01-12   

The "Proposal of the Central Committee of the Communist Party of China on Formulating the 15th Five Year Plan for National Economic and Social Development" (hereinafter referred to as the "Proposal") passed at the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China has made comprehensive arrangements for China's economic and social development during the "15th Five Year Plan" period. Among them, "building a modern industrial system and consolidating and strengthening the foundation of the real economy" is listed as the first strategic task, emphasizing "adhering to the focus of economic development on the real economy". This highlights the fundamental position of the real economy in China's economic development, providing clear guidance for promoting high-quality economic development during the 15th Five Year Plan period. The real economy is the foundation of a country's economy, a direct reflection of social productivity, and the basis of a country's comprehensive national strength. From the theoretical logic of Marxist political economy to the practical experience of the CPC in leading economic work, to the strategic choice to deal with the current complex economic situation, developing the real economy has always been the key to achieving national prosperity and people's happiness. At present, the world is undergoing accelerated changes over the past century, with intertwined turmoil and deepening development of the changing side, while the chaotic side is becoming more prominent. During the "15th Five Year Plan" period, China will be in a period of strategic opportunities and risks, as well as an increase in uncertain and unpredictable factors. Developing the real economy is an important support for addressing the complex domestic and international economic situation, resolving prominent contradictions and problems faced by high-quality development, and maintaining stable and rapid economic development. The inevitable requirement for building a modern industrial system is emphasized by General Secretary Xi Jinping. Accelerating the construction of a modern industrial system supported by the real economy is crucial for us to win strategic initiative in future development and international competition. Currently, a new round of technological revolution and industrial transformation is accelerating internationally, posing severe challenges to the international economic and trade order. The world economy lacks growth momentum, and China is also facing problems such as unbalanced and insufficient development, insufficient effective demand, bottlenecks in the domestic circulation, and arduous tasks in the transformation of old and new energy sources. Therefore, it is necessary to accelerate the construction of a modern industrial system, give full play to the leading role of technological innovation, adhere to the direction of intelligence, greenness, and integration, optimize and enhance traditional industries, cultivate and strengthen emerging and future industries, promote the high-quality and efficient development of the service industry, build a modern infrastructure system, promote the benign interaction between consumption and investment, supply and demand, and enhance the endogenous power and reliability of the domestic circulation. General Secretary Xi Jinping pointed out that China's economy started with the real economy and also relies on the real economy to move towards the future. The "Proposal" clearly proposes that the modern industrial system should be "based on advanced manufacturing industry as the backbone", because the real economy, especially the manufacturing industry, is the lifeline of the national economy and the material and technological foundation of economic and social development. During the 14th Five Year Plan period, the overall scale of China's manufacturing industry remained the world's largest for 15 consecutive years, with the total industrial added value increasing from 31.3 trillion yuan to 40.5 trillion yuan, and the manufacturing added value increasing from 26.6 trillion yuan to 33.6 trillion yuan. At the same time, China's manufacturing industry still faces deep-seated structural problems such as a shortage of high-end products and an excess of low-end products, as well as significant pressure for green and digital transformation. To seize the initiative in development, we must firmly focus our efforts on the real economy, fully leverage the engine role of technological innovation in driving the development of the real economy, promote the upgrading of traditional industries through intelligent and green technological transformation, consolidate the position and competitiveness of key industries in global industrial division of labor, develop strategic emerging industry clusters, stimulate trillions or even larger markets, and open up new tracks for future industries to create new economic growth points that lead sustainable development in the future. At the same time, we should optimize the allocation of factor resources, promote the flow of scientific and technological resources, financial resources, and talent resources to the real economy, and form a modern industrial system that deeply integrates innovation chain, industry chain, capital chain, and talent chain. The realistic foundation for building a high-level socialist market economy system is a more fair and dynamic market environment, optimized resource allocation efficiency, and maximized benefits, all of which serve to create real trading partners and demand carriers for the real economy. The Proposal proposes to accelerate the construction of a high-level socialist market economy system and enhance the driving force for high-quality development. The socialist market economy system provides institutional support for the real economy by optimizing resource allocation, improving the institutional environment, and stimulating innovation vitality. The healthy development of the real economy is the stability and resilience foundation for the high-level development of the socialist market economy system. From the perspective of fully stimulating the vitality of various business entities, on the one hand, to strengthen and optimize state-owned capital and enterprises, enhance core functions, and improve core competitiveness, we must adhere to the foundation of the real economy, closely focus on strategic security, industrial leadership, national economy and people's livelihood, public services and other functions, and increase the layout of forward-looking strategic emerging industries and other fields; On the other hand, more than 90% of private enterprises are concentrated in physical industries such as manufacturing, construction, and wholesale and retail. The longer the physical industry chain and the more specialized the division of labor, the more scenes private enterprises can enter. Only then can the "two unwavering" be better adhered to and implemented. From the perspective of accelerating the improvement of the market-oriented allocation system and mechanism of factors, only when real economic projects are implemented and started, can production factors such as land, capital, labor, and technology form prices through market mechanisms such as supply and demand and scarcity. Only then can a unified construction land market, a well functioning capital market, a smoothly flowing labor market, and an efficient technology market be established in urban and rural areas. Building a unified national market is an inherent requirement for constructing a high-level socialist market economy system, in which the real economy plays a fundamental and driving role. Real economy enterprises facilitate the smooth flow of factors and goods across the country through cross regional layout of production capacity, warehousing, and marketing networks; Leading enterprises in the industry have taken the lead in formulating internal control indicators as group standards, which have been elevated to industry standards through supply chain replication and promotion; Synchronize the cross regional integration of logistics, inventory, demand and other data flows in the large-scale production process of goods, and break down regional information barriers. In his explanation of the "Proposal," General Secretary Xi Jinping pointed out that "based on the prominent problems of increasing downward pressure on the domestic economy and insufficient effective demand at the current stage, the draft of the Proposal proposes goals such as a significant increase in household consumption rate and a sustained strengthening of the driving force of domestic demand for economic growth." When discussing the strategic basis of expanding domestic demand, the "Proposal" clearly states that "new demand leads new supply, and new supply creates new demand. Developing the real economy is not only a strategic focus of supply side structural reform, but also an important way to boost domestic demand. Through multiple mechanisms such as stabilizing employment, increasing income, creating new supply, guiding effective investment, and optimizing distribution structure, the key links in the domestic cycle of "production income consumption" can be connected. Firstly, the development of the real economy can effectively stimulate domestic demand through the dual driving force of investment and consumption. On the one hand, investment in the real economy, especially in manufacturing and infrastructure construction, can create a large number of job opportunities, increase residents' income, and thus enhance their consumption ability. On the other hand, the high-quality development of the real economy can provide better products and services, meet the needs of residents for consumption upgrading, and further stimulate consumption potential. Secondly, there is a positive interaction between the real economy and the domestic demand market. On the one hand, the development of the real economy needs to rely on a huge domestic demand market. The "Proposal" proposes to coordinate the promotion of employment, increase income, stabilize expectations, reasonably increase the proportion of public service expenditure in fiscal expenditure, enhance residents' consumption ability, and provide broad development space for the real economy. On the other hand, by deepening the supply side structural reform, optimizing the industrial structure, and promoting the deep integration of the real economy and the digital economy, we can expand the supply of high-quality consumer goods and services, better adapt to changes in domestic demand, promote the expansion and upgrading of commodity consumption, and form a virtuous cycle of mutual promotion between supply and demand. In addition, fully leveraging the strategic guidance role of national development planning, implementing more proactive macroeconomic policies, and relying on the coordinated support of fiscal and monetary policies to promote the development of the real economy will also more effectively enhance the driving force of the real economy on domestic demand. In recent years, Chinese enterprises have faced many challenges in the complex domestic and international economic situation, which is an important means to alleviate the production and operation difficulties of enterprises. On the one hand, the uncertainty of the global economic situation continues to increase, the risk of recession in developed economies rises, and international trade frictions continue to escalate. On the other hand, the potential for domestic demand needs to be further unleashed. In addition, the continuous increase in operating costs, fluctuations in raw material prices, rising labor costs, and high financing costs have further squeezed the profit margins of enterprises. In the current complex and ever-changing economic situation, adhering to the development of the real economy is an important means to alleviate the difficulties faced by enterprises in production and operation. Technological innovation, as the core driving force of the real economy, can inject new vitality into enterprises. China continues to increase investment in cutting-edge technologies such as artificial intelligence, big data, cloud computing, and new energy, promote the transformation and industrial application of scientific and technological achievements, cultivate high-tech enterprises and strategic emerging industries with global competitiveness, further enhance the technological content and product added value of enterprises, and strengthen market competitiveness. Adhere to the direction of intelligent development, promote the deep integration of digital economy and real economy, and bring new development opportunities for enterprises. Through digital transformation, enterprises can achieve intelligent production, supply chain collaboration, and marketing innovation, effectively reducing costs, improving efficiency, and enhancing competitiveness. Adhering to the direction of green development, enterprises will increase investment in energy conservation and emission reduction, resource recycling, environmental protection technology research and development, promote green and low-carbon production methods, meet market demand for green products, enhance social image and market competitiveness, and further explore new market space. Adhering to the direction of integrated development, strengthening industrial synergy and international cooperation, will significantly enhance China's position in the global industrial chain. By building industrial clusters and collaborative innovation ecosystems, enterprises can closely collaborate with upstream and downstream of the industrial chain, achieve resource sharing and complementary advantages, and effectively solve many problems in production and operation. Chinese path to modernization is the modernization of common prosperity for all people. The 'Proposal' emphasizes the need for all people to take solid steps towards common prosperity. The real economy involves multiple business formats, covers a wide range, and benefits a wide range of development outcomes. It is the source of wealth creation and the largest employment container and innovation driver. From the perspective of employment, the development of the real economy is an important way to absorb labor. The transformation and upgrading of traditional industries and the rise of emerging industries have provided workers with more diversified employment opportunities. The high-quality development of the manufacturing industry has stabilized traditional employment positions, while also generating new job demands through technological innovation. At the same time, the platform economy, as an important carrier for the integration of the real economy and the digital economy, absorbs a large number of flexible employees and becomes a new engine for employment growth. Relevant data shows that the platform economy continuously enhances the sense of achievement of flexible employment personnel by optimizing resource allocation and promoting inclusive growth. From the perspective of income growth, the stable development of the real economy is closely related to the growth of residents' income. In 2024, with the continuous improvement of the real economy, especially the industrial sector

Edit:He Chuanning Responsible editor:Su Suiyue

Source:outlook

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