The fifteenth five-year programme for the national economic and social development of the people's republic of china sets out the need to build a strong domestic market and accelerate the construction of a new development landscape, requiring “a strong bond between people's livelihood and consumption, investment in goods and investment in people”. At present, our economy is generally stable, but there is room for improvement in terms of supply structure, factor allocation and demand structure. A greater focus on investing in people, improving the quality of human capital and the income-generating capacity of the population are key initiatives to build the domestic demand base and increase the efficiency of supply suitability and factor allocation. A strong link between investment in goods and people would provide stronger structural support for accelerating the construction of a new development landscape。
Promote mutual reinforcement of material capital inputs and human capacity-building to optimize supply structures
The essence of the supply structure issue is the compatibility between supply quality efficiency and the requirements of high-quality development. Investing in people is a key variable in overcoming the problem and promoting the optimization of supply systems. In a new stage of development, the marginal effects of growth, which rely solely on the expansion of material capital investment, are diminishing, and the optimization of supply systems is increasingly dependent on the degree of synergy between the improvement of material conditions and the enhancement of human capacities. Maintaining a strong link between investment in goods and people, so that material capital inputs and human capacity-building are mutually reinforcing, is an inherent requirement for improving the quality and competitiveness of supply systems。
First, the effectiveness of material capital investment depends on the match between the level of worker capacity and the capital structure. Advanced equipment, digital technology and modern infrastructure are important material conditions for productive activities, and capital inputs can be converted into real productivity only if workers have the appropriate technical understanding, operational proficiency and organizational synergy. If capacity-building lags behind capital upgrading, it can easily create structural contradictions that combine capital deepening with capacity lags, leading to underutilization of equipment, inadequate release of technological potential and limited productivity gains. The improvement of the vocational education system, the development of life-long skills training mechanisms, and the promotion of a dynamic link between skills upgrading and job needs will enhance the ability of workers to adapt to new technologies, processes and practices, transform material capital investments into full factor productivity improvements and provide continuous support for the optimization of supply structures。
Second, the accumulation of human capacities determines the depth and sustainability of the upgrading of supply structures. In the new stage of development, the optimization of the supply system is no longer dependent primarily on the expansion of the number of elements, but on the endogenous dynamics of knowledge accumulation, technological progress and organizational efficiency. Improved educational systems, improved scientific and technological capabilities and an optimized environment for human growth can provide the institutional basis for the improvement of the quality of human capital, as well as long-term support for the optimization of industrial structures. Increased and steady investment in education, scientific research, public services and the building of innovative platforms can help to create sustainable mechanisms for talent development and capacity-building that will allow knowledge, technology and management experience to accumulate and translate into new productive capacities. The more capacity builds, the more solid the foundation for a factor-driven shift from supply systems to endogenous-driven development models and the more dynamic the expansion of supply structures from scale to quality。
Finally, innovation capacity enhancement is a key hub for the restructuring and structural leapfrogging of supply systems. In the process of optimizing supply structures, innovation is not simply technological improvement, but a systematic reshaping of production patterns, industrial organization patterns and value creation patterns. Science, technology and innovation rely on both the physical conditions of r & d facilities, experimental platforms and digital infrastructure, as well as the knowledge reserves created by the accumulation of high-quality talent and sustained capacity, an innovation-generating mechanism that essentially embodies a close link between material inputs and capacity-building. Only when material inputs are combined with human capacity development can the chain of innovation be seamlessly linked, and scientific and technological results be scaled and embedded into the operation of industrial systems. Upgrading supply systems, characterized by synergistic innovation, not only enhances industrial competitiveness and risk resilience, but also enhances the resilience of supply systems to changes in domestic demand structures and provides a solid supply base for building new development patterns。
Promote synergy between physical capital structure and human resources structure dynamics and increase factor allocation efficiency
The issue of factor allocation is essentially an efficiency constraint resulting from insufficient synergy between the composition and distribution of material capital and human resources. The key to enhancing factor allocation efficiency is promoting a smoother dynamic synergy between physical capital and human resources at the sectoral, regional and institutional levels, allowing continuous interaction between capital investment towards change and human resource capacity enhancement。
At the industry level, the degree of synergy between the physical capital structure and the human resources structure directly affects the efficiency of industrial systems. There are significant differences between industries in terms of technological intensity, capital patterns and demand at the talent level. With the accelerated growth of new industries and the accelerated transformation of traditional industries, the division of labour has deepened, capital investment has been re-engineered with industry configurations, and human resource structures have been adjusted in the process of fragmentation and redistribution. If the direction of capital expansion does not match the structure of the supply of human resources, there is a risk of concentration of capital in technology-intensive areas with insufficient expertise, or structural deviations in labour-intensive areas with relatively abundant human resources and slower capital investment, leading to a loss of resources and efficiency. The coordinated promotion of capital upgrading and the optimization of human resources structures and the efficiency of factor combinations can be achieved only if the direction of industrial development is further linked to the depth of the talent development system and capital flows are channelled into a synchronized adjustment mechanism with the upgrading of skills structures。
At the regional level, the spatial synergy between the physical capital structure and the human resources structure directly affects the allocation of factor efficiency. In the context of the accelerated adjustment of regional development patterns, the direction of capital and population movements is changing and spatial distribution patterns are significantly different. Some net-inflow areas have a high concentration of capital and talent, and the pace of industrial upgrading lags behind the pace of factor-based accumulation, with declining marginal returns emerging; some net-out-of-population areas face a combination of continued human resource outflows and stock capital deposits, with insufficient industrial carrying capacity and weak development incentives. This spatial imbalance combines excessive concentration of elements with idle resources and weakens the overall effectiveness of synergistic development between regions. Thus, in areas of net inflow, capital investment should be optimized in the direction of industrial upgrading, matching the structure of the supply of human resources with the structure of investment; in areas of net outflow, the development of stock asset inventory and niche industries should be driven by resource endowments and the established industrial base, and the attraction and carrying capacity of suitable talent should be enhanced. This reduces space mismatches and enhances the efficiency of the configuration of elements in the larger space。
At the institutional level, the availability of factor market rules and systems determines the degree of synergy between the physical capital structure and the human resources structure. Capital flows, talent allocation and industry layout are often influenced by systemic factors such as administrative fragmentation, market access restrictions and inadequate incentives, resulting in higher cost of matchmaking and limited pace of structural adjustment. The quality of supply in the system determines whether synergy can be transformed from a phased match to a long-term stabilization mechanism. The improvement of an integrated, open and competitive system of factor markets, the development of mechanisms for the protection of property rights and the distribution of proceeds, and the optimization of institutional arrangements for talent evaluation and mobility have helped to reduce systemic frictions in the interface between capital and human resources, optimize the interaction of capital investment towards structural adjustment and human capacity structures in an environment of stable expectations and reasonable incentives, and provide continuous guarantees for the synergy of factor structure dynamics。
Insisting on synergies between improved material supply and capacity enhancement and optimizing demand structures
The problem of demand structure is manifested both in the room for upgrading at the consumption level and in the lack of stability in the engine of domestic demand growth. Essentially, investing in people and increasing the income capacity of the population are the basis for driving demand structural upgrading. In the context of the construction of a new development landscape dominated by large domestic cycles and mutually reinforcing domestic and international cycles, it is important to promote synergies between the improvement of material supply and the enhancement of capacity, and to link the upgrading of production systems with the growth of income for the population。
Increasing the income capacity of the population is fundamental to the upgrading of the demand structure. The continued increase in consumption capacity stems from the increased capacity of workers to participate in quality development and the optimization of income distribution patterns. As industrial upgrading and technological progress accelerate, if workers'skill levels are commensurate with the upgrading of industrial structures, they will contribute to more stable and sustainable income growth, thereby increasing the scale of consumption demand at the medium and high levels. At the same time, improved income distribution structures have helped to expand the size of middle-income groups and to increase the breadth and resilience of overall consumption. The education and training system should be improved, life-long learning mechanisms improved, the quality of employment improved and income growth stabilized, the capacity structure of workers should be brought into line with the evolution of the economic structure, and the income base of the population should be consolidated, providing a lasting impetus for consumption from basic security to quality enhancement and service development。
Improving the consumer environment and the supply of public services are important conditions for unleashing the consumption potential. Even with steady increases in incomes, it is difficult to generate a sustained expansion of consumer demand if public services are not adequately secured and consumption expectations are unstable. The accessibility and stability of basic public services, such as education, health care and old age, have a direct impact on the population's expenditure structure and the tendency to save; spending pressures such as housing, childcare and so on over the long term can squeeze consumption space. At the same time, the quality of the supply of new consumer practices and services determines whether the upgrading of consumption by the population can be achieved smoothly. It is only when public services are more balanced, social security is improved and the consumer landscape is richer that the population can move from preventive savings to rational consumption and drive the consumption structure to a higher level。
Building institutional mechanisms conducive to capacity accumulation and structural matching is a long-term guarantee that investment in people is translated into an engine of demand upgrading. The growth of the income capacity of the population and the improvement of the consumer environment can have sustained structural effects only if embedded in a stable and predictable institutional framework. Labour market systems should be improved, mechanisms of synergy between the education system and industrial structures optimized, and resource allocation efficiency should be enhanced so that people's capacities are aligned with the direction in which economic structures evolve, and so can be linked to capacity and income growth and consumption upgrading. Investing in people is not only a matter of financial investment or accumulation of human capital, but also an institutional arrangement that drives the transformation of the development approach and is deeply underpinning the continuous upgrading of demand structures and the steady expansion of domestic demand systems。
(by yang sing, research fellow, chinese institute of modernization and new forms of civilization, people's university of china, assistant professor, school of economics. Published in the original language in the daily light, edition 06 of 24 april 2026
Original link:
The daily light
Yang sung: investing in people is key to shaping a new development landscape lift
