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[Hunan Daily] How to Realize Hunan’s Development during “14th Five-year Plan”? Let’s Listen to the Expert

2020-09-18 17:27:52

Working Towards Higher-level Dynamic Balance Between Supply and Demand

 

Liu Siwei

 

At a symposium of experts in economic and social fields, General Secretary Xi Jinping, whilst referring to “constructing a new development pattern mainlybasedonthe unimpeded flows in the economy”, emphasized that “we should improve the adaptability of the supply system to domestic demands, so as to form higher-level dynamic balance with the characteristics of demand-led supply and supply-created demand”-this is a new profound and insightfulconclusion made by General Secretary Xi on the relationship between supply and demand in China’s market in the new era and phase, and a new strategic positioning of the supply-demand balance in the market.

Such higher-level dynamic supply-demand balance is a requirement for adapting to the new phaseto address social principalcontradictions, a requirement for building the new development pattern, and also an urgent requirement for deepening the supply-side structural reform to promote the realization of high-quality development. Itis imperative to conscientiouslyimplementthis latest important conclusion made by General Secretary Xi while formulating the “14thFive-year” plan of Hunan Province.

 

Giving Full Play to the Leading and Direction Roles of Market Demand so that SupplyReally Follows Market Demand

To exert the leading and direction roles of market demand,it is necessary to closely cling to the strategicfocus of expansion of domestic demand.To deepen the distribution system reform, increase the middle-incomepopulation inHunan Province, further increasetheincomeoflow-income groupsand enlargethe market capacity, it is necessary tokeep an eye on changes in market demand signals. We should seek opportunities of expanding effective supply frommarket demand changes, letmarket demand driveinnovation and adjustmentofsupply, and avoid resourcemisallocationor ineffective supply caused byadivorce from the market.

For example, asearly as2016, Hunan Province, based on the cognition that themasses havean enormous demand for medical devices with the increase in consumption onhealth, took the initiative to introducethe 13th Five-Year Development Plan for the Medical Device Industry of Hunan Province. From 2015 to 2019,the number of medical device manufacturers increased from 312 to 446 throughout the province with the compound annual growth rate of the totalindustry output of up to 18.2%.Whenmedical supplies were urgently needed due to spread of COVID-19 at home and abroad, all the medical device manufacturers in Hunan resumed workand production in February, and a total of RMB8.395 billion of various medical supplies were exported from January to June, increasing by 489.12% year-on-year.

Itproves that with the insight into market demand changes, we can seize the initiative to expand market supply. While workingout the “14thFive-year” plan, especially the industry plan, it is crucial to obtain the market demand change signals of allindustries and various products through big data analysis and determine the strategic positioning and goals of industries subject to valid market demands.

 

Speeding up Sci-tech Innovation and Technological Achievement Transformation, and Improving the Adaptability of the Supply System to Changes in Domestic Demand

 

Inorder to achieve high-level dynamic supply-demand balance, it is essential to enhance the adaptability of the supply system to changing, diversified and multi-level domestic demands. China is currently marching towards the new phase of building amoderately prosperous society in all respects: on one hand, theproportion of enjoying-type and development-type consumption demands goes up; on the other hand, the intelligentand digital investment demands scale up. Therefore, it is necessary to provide a growing number ofhigh-quality andeffective supply in order to change the situationthat upscale supply is mainly dependent on importfrom developed countries.

 

Growth of effective domestic supply relieson sci-tech innovation, so it is compulsory to vigorously enhance the independentinnovation capacity and winthe critical battleof key and core technologies.In recent years, Hunan has arranged and constructed a batch of significant product innovation projects focusingon emerging and competitiveindustrialchain; the first half year of 2020 has witnessed robustgrowth of new products, andspecifically, lithium-ion batteries,industrialrobots, servers, sensors, smartwatches, semi-conductorphotoelectric deviceshave saw increase of yield respectively by 31.8%, 96.4%, 53.7%,620%,250% and 76.3%. The leading companySany Groupsuccessfullylaunched the world’s largest 4,000-toncrawlercrane, symbolizing that the full range of importedcrawler cranes has been replaced by those“Made in China”.

While making the 14thFive-year Plan, it is especially required to constantly and closely keep sci-tech innovation as the central task, continuously strengthen, extend and replenishthe 20 emergingand competitive industrialchains including engineering machinery, advanced railwaytraffic equipment, aerospace, electronicinformation, new materials, bio-pharmaceutical, greenfood, etc., andenhancethe adaptability of competitive industry and product supply systems of Hunan todomestic investment and consumption demands, and further increase the market share.

 

Striving to Launch New High-level and High-quality Supply and Improving the Dynamic Role of Supply to Create and Release Demand

 

Demand is the motivation and goalof supply; in turn, new high-level supply can create, lead and cultivate new demands.

Viewed fromboth the economic and market history, new-generation consumer goods fromevery revolution of science and technology and industrialrevolutionhave triggered, created and generateda series of new consumption demands. Withthe popularity of mobile Internet technologies in recent years, a series of new products and supply have created new consumption demands; from QQ, WeChat and Weibo to Tiktok, Kuaishouand Toutiao, service supply items launchedbyportal websites haveinitiatedspendingspreesinwaves. During the past five years, the contribution of consumption to national economy has keptat around 60%, which is closelyassociatedwith the continuous innovation ofInternet service supply items and the stimulation of consumption innovation.

Therefore, Hunan should bring the creationand impetuseffects on demand from new high-level supply into full play while making the 14thFive-year Plan. It is imperative to highlight the awareness of “Xiang (Hunan)” products, strengthen thebrand strategy, constantly introducenew high-level and high-quality supply, create and generate new demands industriously, and ultimately ensurean unimpeded flowof“Xiang (Hunan)” productsin the domestic and internationaleconomies.

 

InvigoratingCirculationbyEvery Possible Means and Allowing Circulation to PlayaCrucial Role in Promoting Dynamic Balance between Demand and Supply

 

In order to form anew pattern of benignnational economic circulation, domestic demand expansion is the strategic centerand invigoration of market circulation is the keylink.

Under the conditions of market-oriented economy, dynamic balance between demand and supply cannot be automatically realized but via the circulation link. Circulation can speed up the combination between supply and demand temporally, regulate such combination spatially, and optimize such combination structurally.

Therefore, while making the 14thFive-year Plan, Hunan should enable modern logistics to fully play its role as a linking bridge and a circulation promoter in the economy: we should build bettercirculation infrastructure and accelerate the developmentof the modern logistic system; reconstructthenetwork pattern of the circulation industry withorderly competition,regionalcoordination and efficient benefaction to people in line with new demands, new technologies and new demand-supply trends; conducttargeted connection with the Internet, innovate new modes and business forms of thebrick-and-mortar retail industry, and openup the demand-supply combination point at circulation ends; energetically promote the integrativedevelopment between the urban and rural circulation industries and reconstruct the modern rural circulation system with the upgrading of the rural E-commerce asa breakthrough point; actively support R&D and application of big data, cloud computing, AI and blockchaintechnologies in the circulation field, boost thedeepintegration between logistics, businessflow,information flowand fund flow, impelnew consumption models ofall sorts to match supply and demand sides more efficiently, exploitthe supply advantages of local featured industries, and ultimately facilitate the dynamic balance betweensupplyanddemand.

(The author is a professor and the Director of the Academic Committee of Hunan University of Technology and Business)

Source: Hunan Daily, the 7thEdition datedSeptember10, 2020


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