At the same time, the Head of State stressed that “consumption is a derivative of income”. Therefore, to develop domestic demand, it is necessary “to increase the income of the population, to strengthen the consumption capacity of low and middle income groups, who have suffered the most from the coronavirus crisis”. For this, in particular, it was proposed to “reasonably develop consumer credit”.
On supporting investment activity, Xi Jinping admitted, “The expectations of private investors are now low, so the state should play a leading role.” He proposed increasing government investment in infrastructure construction, energy and hydropower engineering projects, and agriculture.
The Head of State also called for the strengthening of the “strategic support role” of public companies in the economy. To do this, he proposed to launch a new round of public sector reforms, focused on improving its competitiveness. “Low profitability and the inability to innovate in individual enterprises are inconsistent with the demands of the public sector to become stronger and bigger,” Xi Jinping said.
At the same time, he noted the invariability of the line to ensure equal rights and equal access to markets for public and private companies, as well as the course to support the development of private entrepreneurship , especially small and medium-sized enterprises, as well as as individual entrepreneurs. Xi Jinping has not forgotten the support of foreign capital. He called for further reduction of negative lists beyond which a foreign entrepreneur can invest in anything without prior approval from the authorities. The Head of State also insisted on “the guarantee of equal rights, equal access to State orders for companies with foreign capital participation, the protection of their intellectual property rights and other legitimate interests”.
Finally, in order to ensure sustainable economic growth, the Chinese president called for security in the food and energy sectors. Xi Jinping designated security in the financial sector as a separate element. To do this, he first called for solving the problems of the real estate sector, which was in a critical situation due to too much debt. “We must put an end to the systemic risks that the real estate sector creates. It seriously affects economic growth, employment, budgetary filling, the well-being of the population and financial stability. We must change the model of its development to a new, more stable one,” the Chinese head of state called.
