Expanding Rural Demand from anUrban-Rural Integration Perspective:Potentials and Pathways

Wei Houkai, and Lu Qianwen*

Rural Development Institute (RDI), Chinese Academy of Social Sciences (CASS), Beijing, China

Abstract: The countryside is both a priority and a challenge in China’s efforts to increasedomestic demand. The growth of rural demand is essential in strengthening urban-ruraland broader domestic economic circulations. The consumer spending of rural householdswill expand faster than that of urban households if their incomes grow at a reasonable rate.China’s efforts to become an agricultural powerhouse and to create a livable countrysideis expected to turbocharge investment demand, and quality-oriented rural industrialdevelopment will unleash more urban and rural consumer demand. However, barriers tourban-rural integration have stifled rural consumer demand. These barriers are reflected inthe deceleration and instability of the growth of income of the urban and rural households,social security gaps for rural residents, insufficient rural industrial development,insufficient rural supply capacity, and insufficient rural infrastructure revenues, as well asan undersupply of goods and services for rural residents. Rural consumer demand shouldbe increased for the betterment of life for urban and rural residents under urban-ruralintegration. The government should adopt a combination of policy paths and instrumentsto increase rural incomes and boost rural demand, upgrade the rural consumer market,and encourage investment in rural development. Agriculture and the countryside shouldeffectively integrate into the broader domestic economic circulation to smooth urban-ruraleconomic circulation.

Keywords: Strategy to expand domestic demand, rural demand, urban-rural integration,

JEL Classification Code: E61, O18, R10

DOI: 10.19602/j.chinaeconomist.2023.07.01

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