Cao Yuanzheng: Increasing the income of low- and middle-income groups is the first priority of demand-side management by 2035

Beijing News (reporter Hou Runfang) At the recent monthly research and judgment meeting of the China Development Research Foundation Primus Macro Forum, Cao Yuanzheng, chairman of the Board of Directors of BOCI International Research Co., Ltd. and member of the Academic Committee of the Primus Macro Forum, said when talking about the topic of "demand-side management", although China has bid farewell to absolute poverty, the lower middle-income group is still the main body of the population, with nearly 1 billion people. For this majority of the population, although there is a high marginal consumption tendency, income is still a hard constraint on consumption, and the lack of final demand with the ability to pay is still the biggest reality in China. Raising incomes for low- and middle-income groups is the number one priority for demand-side management by 2035.

So, how to raise the income of low- and middle-income groups and boost the consumption of this group? In Cao Yuanzheng's view, accelerating the development of urbanization and enabling more peasants to go to the city to work is an effective way to increase the income of the low-income class. "On the one hand, while accelerating the process of urbanization and creating more employment opportunities to increase the income of low-income families, we should establish and improve rural collective land, including homesteads, into the market to increase the property income of low-income families; on the other hand, while accelerating the process of urbanization of migrant workers, we should improve their marginal consumption tendencies through the transfer of state-owned equity to social security." These should all be the focus areas of demand-side management during the 14th Five-Year Plan period. Cao Yuanzheng said.

Cao Yuanzheng also pointed out that from the perspective of income stratification, there are objectively two Chinas. One is the above-mentioned low- and middle-income China, and the other is the middle- and high-income China, which has a population of more than 400 million. For the latter group, having a car and a house, the ability to pay is no longer a hard constraint compared to the previous group. Instead, they need new supplies, especially services. In other words, the constraint on their consumption is high-quality services, which are concentrated in the provision of children's education, medical health and old-age services.

"Given that the population of this group has already surpassed the population of the United States and will continue to double in the next 15 years to 800 million to 900 million, more than the current population of Europe, the United States and Japan combined, China will become the country with the largest middle-income group." Therefore, both now and in the future, it is important to manage the important aspects of precaution for the demand side. Cao Yuanzheng further suggested that the government should increase investment in preschool education, compulsory education, public health facilities including hospitals, and old-age facilities. At the same time, opening up the related service areas and allowing private and Sino-US joint ventures and sole proprietorships not only meet the current consumption of middle- and high-income groups, but also lay the foundation for the arrival of future service-oriented societies. More importantly, human capital enhancement is both to expand supply and to create demand. Only by upgrading human capital can the economy be sustainable and spiral steadily.

Beijing News reporter Hou Runfang Editor Li Weijia Proofreader Wang Xin