The "Special Action Plan to Boost Consumption" recently issued by the General Office of the CPC Central Committee and the State Council proposes to "create effective demand with high-quality supply". This is a key tool for my country to deal with the current contradiction of insufficient domestic demand and supply structure, and is also an important task to build a new development pattern and promote high-quality development.

The Plan for the first time incorporates the three major actions of "Enhancing Service Consumption Quality Benefiting Action", "Enhancing and Upgrading Action of Bulk Consumption Quality" into the policy framework, and builds a path for two-way activation of supply and demand. The service consumption field focuses on the needs of "one old and one young", optimizes the supply of embedded services in the community and promotes the integration of elderly care and childcare with cultural tourism, medical care and other business formats; bulk consumption opens up the circulation bottlenecks of durable goods such as home appliances and automobiles through the old-for-new policy. These measures not only respond to residents' demand for consumption upgrading, but also drive upstream technology upgrades through the synergy effect of the industrial chain. The "Plan" will also include stabilizing the stock market and stabilizing the real estate market in the policy framework for promoting consumption, providing assistance to further create high-quality supply.

The upgrade on the supply side forms a benign interaction with the expansion of the consumer side. In the first two months, the added value of industrial enterprises above designated size increased by 5.9% year-on-year, 0.1 percentage point faster than the whole year of the previous year, and the added value of high-tech manufacturing increased by 9.1%, accelerating by 0.2 percentage points. This once again confirms the driving role of innovation in the supply and demand cycle: traditional manufacturing industries increase product added value through intelligent transformation, such as equipment manufacturing companies integrate digital twin technology into the production line to achieve accurate matching of customized production and consumer demand; emerging industries rely on technological breakthroughs to open up new tracks, and the rise of low-altitude tourism, "artificial intelligence + consumption" and other business formats is not only the result of supply innovation, but also provides a carrier for consumption expansion.

It should also be noted that the current capacity utilization rate of traditional industries is hovering at a low level, and oversupply and insufficient effective supply coexist in some areas. The potential for residents' consumption needs to be further released. The fluctuations in foreign demand and international trade frictions have aggravated the complexity of the economic cycle, which puts forward higher requirements for the connection between domestic supply and demand. Therefore, to achieve effective demand with high-quality supply, we need to further deepen the coordination of reform and opening up, and make breakthroughs from three dimensions: institutional reform, factor allocation, and international circulation.

Break and establish a balance to promote scientific and technological innovation, we must not only break the path inertia of traditional industries relying on low-end factors, but also establish an innovation ecosystem with enterprises as the main body. Strengthen scientific and technological innovation and improve the supply system, break through the boredom technology through the "listing and taking the lead" mechanism, and cultivate new quality productivity. Deepen the market-oriented reform of factors such as land, capital, and data, and promote the tilt of resources towards high-value-added areas. High-level opening-up forces the upgrade of the supply system, and embeds the domestic industrial chain at the top of the global value chain by participating in the formulation of international standards and attracting global innovation resources. In addition, we must accelerate the reform of income distribution, consolidate the consumption capacity foundation by increasing pension standards and improving the childcare subsidy system, optimize the institutional environment, break administrative barriers, and build a unified national market.

The stable and healthy economic development cannot be separated from the close connection between supply and demand gears. With the courage of reform of "cutting the blade inward" and the open wisdom of "expanding new" to write a practical answer to create effective demand with high-quality supply. When policy dividends fall from "paper" to "ground", and when corporate innovation shifts from "following" to "leading", the potential of a super-large-scale market will surely be transformed into lasting momentum for high-quality development. (Author: Jin Guanping Source: Economic Daily)