Recently, the Central Economic Work Conference and Political Bureau Meeting have responded positively and guided social expectations, proposing to strengthen unconventional counter-cyclical adjustments and intensify the coordination of various policies, which is conducive to breaking deflation and forming a positive feedback effect.
The main reason for the current macroeconomic imbalance lies in the demand side, not the supply side. When the Central Economic Work Conference assigns key tasks for the next year, expanding domestic demand is given top priority. The most important thing to solve the serious imbalance in China's macro-economy is to focus on domestic demand, quickly reversing the long-term accumulation of major obstacles that restrict the expansion of domestic demand.
Macro policies that focus on domestic demand put forward higher requirements for institutional and mechanism reform. Under the current system in our country, local governments bear the main economic development tasks. In the past, the benefits of local government's supply-side investment were localized, but now the benefits of demand side may not necessarily be localized. Therefore, the top-level design at the central level is particularly important.
Macro policies that focus on domestic demand should further enhance the policy effectiveness. On the one hand, the meeting emphasized the precision of macro-economic policy tools on the basis of more proactive fiscal policy and moderately loose monetary policy. On the other hand, the meeting proposed to improve investment efficiency, pay more attention to benefiting people's livelihood, promote consumption, and increase momentum.
