Guo Liyan: Continuously Strengthening and Leveraging the Advantages of an Ultra-Large Scale Market
The super-large market is a distinctive advantage of China's economic development and a vital strategic resource for participating in international competition. It serves not only as a stabilizer for economic operation but, more importantly, as a source of power for shaping new drivers and new advantages.
The "15th Five-Year Plan" period [1] holds a critical position as a link between the past and the future in the process of basically achieving socialist modernization. The Fourth Plenary Session of the 20th Central Committee of the Party pointed out that China's economic foundation is stable, its advantages are numerous, its resilience is strong, and its potential is great. The supporting conditions and fundamental trend toward long-term improvement remain unchanged. The advantages of the system of socialism with Chinese characteristics, the super-large market, a complete industrial system, and abundant human resources are becoming increasingly prominent.
The advantage of a super-large market is not merely reflected in economies of scale; it is a systemic advantage comprising multiple dimensions, such as expanding incremental growth, improving quality and efficiency, and smoothing circulation. During the "15th Five-Year Plan" period, China's development environment faces complex changes. Deeply understanding the essence of the super-large market advantage, and continuously strengthening and fully leveraging this advantage, is an inevitable choice for China to seize the strategic initiative amidst the global changes unseen in a century [2] and to solidly promote high-quality development.
The Source of Strong Confidence and Strategic Resolve
In the maneuvering between great powers, the market itself is a scarce resource and a major bargaining chip. The recommendations for the "15th Five-Year Plan" emphasize that "a strong domestic market is the strategic support for Chinese-path modernization." The reason it constitutes a strategic support lies in the breadth, depth, and resilience of the domestic market, which provide powerful backing for China to maintain strategic resolve and achieve high-level self-reliance and strength in science and technology. Faced with trade protectionism and external technological blockades, the super-large market can provide enterprises with alternative space for growth, accelerating breakthroughs in key technologies and the process of localization. In particular, it can provide more "patient capital" [3] and application scenarios for the long-cycle research, development, and application of "hard & core" technologies.
Relying on its large market, China has expanded its influence in global economic governance. International experience shows that economies with larger market scales possess greater discourse power and room for maneuver in international trade negotiations, standard-setting, and rule consultations. China has become an indispensable node in global industrial and supply chains. An increasing number of multinational corporations are locating key segments of their supply chains in China to be closer to end-consumption markets, reduce logistics costs, and respond quickly to changes in demand. Simultaneously, China has gradually formed market standards and business models with global influence in fields such as 5G communications, mobile payments, and new types of retail.
At the same time, a super-large market means it can satisfy diverse and multi-level demands, thereby improving the suitability of supply to demand and enhancing the balance between the two. China has a population of over 1.4 billion, including a middle-income group of over 400 million. Regional market development exhibits gradient characteristics; from cities to counties, and from the eastern region to the central and western regions, different vertical and horizontal segments are mutually supportive and complementary. This can effectively respond to external shocks and new changes brought about by domestic economic structural adjustments. In international economic and trade struggles, the supporting role of the domestic demand market for the economic fundamental state has become increasingly obvious, demonstrating strong resilience against shocks. When consumption growth in some cities slows down, there are still vast markets in third-tier cities and below, as well as in counties and rural areas, where demand potential can be further released to promote steady consumption growth.
Forming a Gravitational Field for Factor Resources
Economies of scale and the cost advantages of a market are important factors influencing the specialized division of labor. The economies of scale in a super-large market are significant, supporting a more refined, large-scale, and professional division of labor and giving rise to more efficient supply chain networks. This not only helps enhance the competitive advantage of local enterprises but also facilitates the pooling of global high-end factors [4], providing strong factor support for the development of emerging industries. For example, the rapid development of the new energy vehicle (NEV) industry in recent years, with production and sales ranking first in the world for many consecutive years, is inseparable from the supporting role of the domestic super-large market. A large market can attract high-quality resources such as domestic and foreign capital, talent, technology, and data, driving rapid breakthroughs and cost reductions in core technologies across the entire industry chain—such as the "three electric" systems (battery, motor, and electronic control) and intelligent driving—further expanding the market share of the NEV industry globally. It must also be noted that China's market possesses massive data generated by a huge consumer base and rich application scenarios. This will further enhance the investment will of global capital, attracting top scientists, engineers, and corporate R&D centers from around the world to develop in China, bringing rare development opportunities for the intelligent and digital economies.
The attraction of a super-large market is not a static advantage but a dynamically strengthening systemic advantage. In the short term, it manifests as the agglomeration and integration of existing resources and factors. In the long term, by developing new technologies and new business forms, it generates higher demand for factor upgrades, thereby continuously strengthening the market's attraction for advanced, high-quality productive factors. The more fully these factors flow and the more efficiently they are allocated, the smoother the economic circulation becomes, creating a gravitational field for global resources and factors. While gathering global high-end factors, it can further promote domestic industrial upgrading and institutional innovation, forming a positive cycle of "factor convergence—industrial upgrading—consumption upgrading—stronger attraction," thus enhancing endogenous economic momentum. Especially in fields where technology iterates rapidly, the inclusiveness of the super-large market is even more prominent. The vast market space can effectively disperse investment risks and improve the willingness for long-term capital allocation, providing more stable expected returns for high-uncertainty innovation projects. Diverse and multi-level market demand will guide enterprises to increase R&D investment, optimize supply structures, and expand product lineages, thereby continuously attracting collaborative innovation resources from home and abroad.
Nurturing Vitality and Generating Momentum
The vitality of China's market is embodied in the unceasing trial-and-error and catching-up efforts of innovative enterprises. The super-large market is an "accelerator" for the incubation of new technologies and products, which can significantly shorten the industrialization and commercialization process of innovative achievements, thereby accelerating the replacement of old drivers with new ones. Thanks to the depth and breadth of the Chinese market, new technologies and products can be quickly matched with initial users, completing the verification breakthrough "from 0 to 1." Relying on economies of scale and economies of scope, they can then quickly dilute R&D costs, gaining the opportunity to achieve continuous innovation "from 1 to N." In particular, independent innovation enterprises can rely on the huge local user base to quickly complete technological iterations, constantly polish business models, and reduce the cost of innovation trial-and-error, thereby gaining the opportunity to leap from imitative innovation to original innovation.
The vitality of China's market is contained in the process of the demand side and supply side constantly spiraling upward toward the new and the excellent. The development speed and popularity of China's mobile payments, e-commerce, and live-stream selling lead the world. Relying on massive data and rich application scenarios, China has formed unique business advantages in fields such as artificial intelligence, 5G, and big data applications. From industry leaders to small, medium, and micro-sized enterprises, and down to individual entrepreneurs, a wide-ranging, multi-level competitive landscape has been formed. Relying on digital platforms, various enterprises have significantly improved their response speed to personalized and quality-oriented needs, further activating the potential of the consumer market. Many new business forms and modules with distinct characteristics and market prospects have not only achieved rapid growth themselves but have also built up momentum to form ecosystems that empower millions of small merchants and creators. For example, relying on a large group of young consumers who prefer digital consumption, many "New China-Chic" [5] brands have emerged in fields such as cosmetics, food, and electronics. Live-stream e-commerce has also given rise to new professional forms related to immediate retail supply chains, such as hosts and operators, releasing strong economic vitality.
Comprehensive Measures to Release Potential Advantages
As the new round of technological revolution and industrial transformation develops in depth, new fields and "new tracks" [6]—such as the digital economy, intelligent economy, green economy, and "silver economy"—are constantly emerging. This provides a historical opportunity for China to leverage its super-large market advantage and promote high-quality development. To accelerate the formation of an economic development model dominated by domestic demand, driven by consumption, and fueled by endogenous growth, we must fully leverage the super-large market advantage, continuously stimulate the potential of domestic demand, and form endogenous growth momentum. At the same time, although China's market advantages are obvious, some challenges remain in the process of market development and construction, which must be objectively recognized and properly addressed. For example, local market fragmentation and local protectionism exist in some areas, affecting the overall scale effect and resource allocation efficiency. Currently, the contradiction of "strong supply and weak demand" is prominent, and the capacity for effective supply remains to be strengthened. Overcapacity in some industries coexists with insufficient high-end quality supply, making it difficult to meet the needs of consumption upgrading. There are still bottlenecks and "stuck points" restricting consumption in areas such as income distribution, market infrastructure, and coordinated regional and urban-rural development. All these factors affect the further release of potential and the bursting of vitality in the large market. In response, comprehensive measures are needed: using institutional construction to enhance market inclusiveness, using innovation-driven strategies to enhance the suitability of supply to demand, further stimulating diverse consumption vitality and multi-level market potential, strengthening the radiation and attraction of China's market, and promoting the transformation from a "large market" to a "strong market."
Advance the construction of a unified national market in depth and expand opening-up both internally and externally. Accelerate the formulation and introduction of regulations for the construction of a unified national market, focusing on achieving uniformity in property rights protection, market access, standard certification, and supervision and enforcement, breaking down various hidden barriers to ensure the free and efficient flow of factors and goods nationwide. Promote high-level institutional opening-up, align with high-standard international economic and trade rules, continuously optimize the business environment, maintain fair competition, and protect intellectual property rights. Expand the import of high-quality goods and services, successfully host China Brand Day activities and major exhibitions such as the China International Import Expo (CIIE) and the China International Consumer Products Expo (CICPE), making China's large market more inclusive, sustainable, and globally attractive.
Promote the close integration of industrial and innovation chains and continuously enhance the suitability of supply to demand. Further strengthen the virtuous cycle where competition stimulates innovation and innovation expands the market. Implement the "unveiling the rankings" [7] mechanism, organizing scientific and technological breakthroughs oriented more toward industrial and market demands, and making enterprises the main subjects of innovation decision-making and result application. Play the role of scenario-driven innovation, planning and opening a batch of major application scenarios in fields such as energy and transportation, health and medical care, and urban governance to provide broader space for the application and demonstration of frontier technologies. Deepen pilot comprehensive reforms for the market-based allocation of factors, promote the standardized and healthy development of the platform economy, and further improve market mechanisms and optimize market structures.
Promote the upgrading of consumption quality and expand the space for economic growth. The greatness of a super-large market lies in the huge population scale, but even more so in the depth of consumption potential, the richness of levels, and the novelty of models. Increase residents' income through multiple channels, implement plans to increase the income of urban and rural residents, promote the formation of an olive-shaped distribution pattern [8], and enhance residents' consumption capacity, stabilize consumption expectations, and improve the consumption environment. Promote the quality improvement and expansion of traditional consumption, accelerate the development of new types of consumption, and stimulate multi-level consumption and investment potential. Guided by green, digital, and intelligent transformation, cultivate new growth points such as smart homes, culture and sports entertainment, and elderly care. Promote the supply of diversified services, strengthen guarantees in education, medical care, elderly care, and housing, and enhance the supply side's suitability for medium-to-high-end demand. Cultivate and expand the green consumption market, improve the carbon emission rights and energy-use rights trading markets, and guide funds toward fields such as scientific and technological innovation, modern industry, and green transformation.
Strengthen coordinated regional development and release multi-level market potential. Focus on the high-quality development of regional markets, strengthen the role of the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area as sources of innovation. Accelerate the integrated development of scientific and technological innovation and industrial innovation in the Chengdu-Chongqing economic circle and the Yangtze River middle-reach urban clusters, and promote the characteristic development of county-level economies. Further improve market infrastructure, sound the modern circulation system, upgrade the "hard connectivity" of logistics and other infrastructure, and strengthen the "soft connectivity" of institutional rules such as data, credit, and supervision. Promote the formation of a strong domestic market with a larger scale, better structure, higher quality and efficiency, and more complete mechanisms.
(The author is the Deputy Director and Researcher of the Institute of Economic Research of the National Development and Reform Commission)