Rural demand is a tremendous force driving economic transformation and development

Overcapacity is a prominent problem in the current new normal of China's economic development. At present, whether in the energy industry, processing and manufacturing industry, or the construction and building materials industry, there exists overcapacity to varying degrees. Overcapacity creates large stockpiles of surplus products. Digesting overcapacity and providing space for consumer demand for surplus products is an important task in the transformation and upgrading of industries and enterprises. At present and for some time to come, in expanding consumer demand, the focus should be placed on expanding rural demand.

I. Rural demand is an important driving force for economic transformation and development

To digest overcapacity, it is necessary to combine the elimination of overcapacity with the consumption of surplus products. On the one hand, it is necessary to compress or eliminate overcapacity through adjusting the economic structure; on the other hand, it is necessary to consume or digest surplus products by tapping into social consumer demand. China's rural areas contain tremendous consumer demand. If we can expand consumer demand in rural markets, we can promote the digestion of overcapacity or products, and create market space for industrial transformation and upgrading so that industries and enterprises can shed their burdens and move forward with light packs. Therefore, expanding rural demand is not only a major measure for advancing modern agriculture, narrowing the urban-rural gap, and promoting the integrated development of urban and rural areas, but also an urgent need for responding to the new challenges of the new normal of economic development, digesting overcapacity and products, and promoting transformation and upgrading.

Expanding rural demand has tremendous potential and realistic possibilities. China's agriculture and rural areas remain the weak link in the synchronized development of the "four modernizations." The weak link is both a gap and, more importantly, a driving force for demand and development. In recent years, China has implemented policies to strengthen agriculture, benefit farmers, and enrich rural areas, carried out the guideline of coordinated urban-rural development, and implemented industry nurturing agriculture and cities driving rural areas, which has powerfully advanced the process of urban-rural integration and accumulated and expanded the scale of agricultural and rural development demand. Under the new normal of economic development, we must not only persist in industry nurturing agriculture and cities driving rural areas, but also implement agriculture digesting overcapacity and rural areas providing space for transformation and upgrading.

Rural demand at the present stage has been accumulated and formed through China's long-term rural reform and development. We should see not only the "eleven consecutive increases" in grain production and the "eleven consecutive years of rapid growth" in farmers' incomes, but also the "eleven consecutive expansions" in rural consumer demand. Since the reform and opening up, and especially in recent years, China's implementation of policies to strengthen agriculture, benefit farmers, and enrich rural areas has not only powerfully and effectively supported agricultural and rural development, but also cultivated tremendous consumer demand in rural areas. Looking at it now, the process of implementing policies to strengthen agriculture, benefit farmers, and enrich rural areas and cultivating, accumulating, and forming rural demand coincided with the arrival of the new normal of China's economic development. The policies to strengthen agriculture, benefit farmers, and enrich rural areas have not only promoted agricultural and rural development, but also accumulated and provided demand momentum for economic development under the new normal. Now is the time to tap into and bring out the "eleven consecutive expansions" in rural demand, so as to drive the digestion of overcapacity and products, promote enterprise transformation and upgrading, and spur sustained economic growth.

The golden period of China's agricultural and rural reform and development is precisely the best and most critical period for expanding rural demand and unleashing consumption potential. It should be noted that China's rural areas have tremendous demand for industrial goods and daily necessities, and some surplus products are precisely suited to rural demand at the present stage. By channeling some overcapacity or products to agriculture and rural areas on a market basis, guided by demand, and linked by policy, we can turn surplus to good use, turn waste into treasure, and save resources. This is not only an important measure under the new normal for industry nurturing agriculture and cities driving rural areas, but also a new measure for agriculture digesting overcapacity and rural areas providing space for transformation. We should treat usable overcapacity or products as valuable social wealth, use them to nurture agriculture and drive rural areas, and let them play their role of making the best use of everything; at the same time, we should use the tremendous potential consumer demand in rural areas to digest overcapacity and drive enterprise transformation and upgrading, making it an important force for promoting economic growth.

II. Innovating the concepts for expanding rural consumer demand

Against the background of the new normal of China's economic development, to implement the strategy of expanding domestic demand, we must first re-examine and treat rural consumer demand from a broader perspective. Rural consumer demand at the present stage displays more distinctive features than before and holds a more important position and role than before. It can be said that rural demand is a treasure; once brought out, its effect is extraordinary.

Rural demand is an important potential economic resource of China, characterized by stage-specificity, potentiality, sustainability, and diversity. The potential and driving force of rural demand are tremendous and immeasurable. The formation and changes of rural demand depend on the orientation of agricultural and rural policies and the level of agricultural and rural economic development. Precisely because of the success of China's agricultural and rural policies and powerful and effective macro-control, the potential of rural consumer demand has been cultivated, accumulated, and formed. China's rural demand has a solid foundation, broad fields, numerous types, and enormous scale. Whether in modern agriculture construction, rural residents' housing construction, agricultural and rural infrastructure construction, or rural ecological environment construction, agricultural product circulation system construction, and rural social undertakings development, tremendous potential consumer demand is contained. For this valuable resource of rural consumer demand, we should develop it while cultivating it, utilize it while protecting it, and expand it while utilizing it, so that it plays its fundamental driving role in economic development under the new normal.

At present, China's rural consumer demand has undergone profound changes in both "quantity" and "quality." As the integrated development of urban and rural areas advances steadily, the pace of modern agriculture construction accelerates, and farmers' income levels continue to rise, the consumption level and quality of rural demand have improved simultaneously. The composition of rural consumer demand has become more diversified and varied compared with traditional consumer demand, consumption fields are increasingly broadened, consumption varieties are constantly increasing, and consumption levels have markedly risen. In modern agricultural consumption, the application of traditional technology and equipment is shifting toward modern material and technical equipment, and agricultural technology is shifting from single-item application to assembled integration; in farmers' daily-life consumption, there is a shift from low-level livelihood security to higher levels such as nutrition and health; in residents' housing consumption, there is a shift from earth-and-wood structures to brick-and-tile structures and reinforced concrete structures, and from dispersed and scattered living to concentrated rural communities; in village construction consumption, there is a shift from simple rural and township road construction to public service facility construction, and toward beautification, greening, and pollution control. These profound changes in the quality and quantity of rural demand indicate that the total volume of rural demand is continuously expanding, and demand's pulling power on the economy is gradually strengthening. The consumer demand for economic transformation and upgrading released by rural areas is precisely the space and market for the transformation and upgrading of China's industries and enterprises. If we seize the changes in rural consumer demand, we can create new momentum and new opportunities under the new normal of economic development.

The tremendous consumer demand in rural areas is an economic advantage unique to China that some countries cannot match. China is large in size, and within that, agriculture and rural areas are large in size, and the demand of agriculture and rural areas is large in size. China's rural areas are vast in territory and large in population, with a strong momentum of diversified and varied daily-life consumption; China's agricultural sector is broad and deep, and traditional agriculture is accelerating its transformation toward modern agriculture, with modern agriculture releasing greater and more lasting consumer demand than traditional agriculture; China's coordinated urban-rural development is accelerating, and the organic combination of new urbanization and new rural construction means tremendous demand for rural infrastructure construction and ecological environment construction; rural reform is continuously deepening, cultivating new agricultural operating entities and operating systems such as family farms, farmers' cooperatives, leading industrialization enterprises, and joint-stock cooperative economic organizations, and a new operating system featuring intensification, large-scale operation, specialization, and standardization is gradually being established, which will certainly release new consumer demand. All of this will constitute rural consumer demand with Chinese characteristics at the present stage. This is an extremely favorable condition for some industries and enterprises to respond to the challenges of internationalized competition, overcome the market, resource, and environmental pressures they face, and achieve transformation, upgrading, and revitalized development.

⟦NL> III. Using policy to connect overcapacity with rural demand

Policy is the guarantee for tapping into and releasing rural demand. At present, on the one hand, China's overcapacity and surplus products urgently need to find an outlet; on the other hand, the tremendous demand of agriculture and rural areas cannot be met. To resolve the disconnect between outlets and demand, the key is to formulate a series of policy measures to release the potential of rural demand and effectively connect overcapacity with consumer demand. Through effective demand-expansion policy measures, we should transform rural demand into measures and strength for responding to the international economic downturn and insufficient demand, transform rural demand into an engine for economic transformation and upgrading, and transform rural demand into a new growth point for economic development under the new normal.

It is necessary to innovate policies and measures for expanding rural consumer demand. At present, both China's economic development and agricultural and rural development face new opportunities and challenges. What is important is to formulate policy measures for tapping into and expanding rural consumer demand. In recent years, in response to the global economic crisis and insufficient domestic demand, a number of policies for expanding domestic demand have been formulated in succession. However, it should be noted that the intensity of policy measures for tapping into and expanding rural demand is still insufficient, and some policy measures are not fully suited to the current needs of expanding rural demand. Starting from the realistic needs of current economic development and based on the structural changes and characteristics of rural demand, we should formulate and introduce policy measures for expanding rural demand.

It is necessary to make policies for expanding rural consumer demand an important component of the policies to strengthen agriculture, benefit farmers, and enrich rural areas. As economic development enters the new normal, agricultural and rural development has also entered a new normal. Constraints such as the "price ceiling" on agricultural products, the "cost floor" of agricultural production, the capping of agricultural subsidies under the "amber box policy," and the "red light" for agricultural resources and ecology are intensifying, and the policy space in these areas is already very limited. Under such circumstances, it is suggested that new policies and new measures for expanding rural consumer demand be studied and formulated; this can serve as an important option for expanding the space for rural policy development. First, study and formulate policy measures to support the renovation and construction of rural residents' housing. Support rural residents in improving their living conditions and environment, and guide farmers to build new housing, plan rationally, save resources, occupy less arable land, and save energy and reduce emissions. Second, study and formulate support policies for the construction of rural roads and field roads. The "last kilometer" problem in rural road construction from townships to villages and in rural field road construction remains unresolved and should be given special investment and support as a priority in national transportation projects and rural infrastructure construction. Third, study and formulate investment policies for high-standard farmland construction. Strengthen the construction of high-standard farmland with guaranteed yields despite drought or excessive rain, increase investment in farmland irrigation technology and equipment and water-saving facilities, and accelerate the pace of high-standard farmland construction. Fourth, study and formulate support policies for facility agriculture construction. Make facility agriculture a priority in modern agriculture construction, support the development of facility vegetables and facility horticulture, and increase investment in modern agriculture demonstration zones and facility base construction. Fifth, study and formulate support policies for the construction of a modern agricultural product circulation system. China's agricultural product circulation system construction lags behind. From the current situation, agricultural product production capacity has markedly improved, while circulation capacity has grown slowly, severely constraining the level of integration of production, processing, and marketing. Policy measures should be formulated to support a modern agricultural product circulation system, promote effective connection between production and marketing, and achieve balanced market listing of agricultural products. Sixth, study and formulate policies to support the development of new agricultural operating entities. Leaning agricultural development support policies toward new agricultural operating entities, and increasing support for new agricultural operating entities such as large grain-growing households, family farms, farmers' cooperatives, leading enterprises in agricultural industrialization, and joint-stock economic cooperative organizations. Seventh, study and formulate policy measures to support agricultural informatization construction. Agricultural informatization is an important component of modern agriculture construction. China has tremendous demand for informatization and Internet of Things applications in agricultural production, processing, management, circulation, and other links. Through strengthening informatization construction, we should improve decision-making capacity in agricultural production, operation, and management, raise agricultural labor productivity and resource utilization efficiency, and enhance agricultural competitiveness. Eighth, study and formulate policies for rural ecological environment protection and construction. Support green agriculture development, encourage the application of organic fertilizers and biological pesticides, and implement protection and compensation for arable land and freshwater resources. Use policy to guide rural garbage and pollution treatment, and support the rural "four renovations" (renovating water supply, renovating stoves, renovating toilets, and renovating livestock pens). Guide the comprehensive processing and utilization of crop straw and vigorously develop agricultural biomass energy.