Unleashing demand

Meanwhile, officials have pledged a number of demand-side policies to boost domestic consumption and investment, such as creating more jobs, improving the social security system and expanding middle-income groups.

Chen Fengying, a research fellow at the China Institutes of Contemporary International Relations, said the recovery in demand has so far lagged behind that of supply in China since the COVID-19 outbreak, underlining the need to ramp up policy efforts to boost domestic demand, especially consumption.

"For the economy to achieve a self-sustaining, strong recovery, policymakers must ramp up demand-side measures to boost consumption," Chen said, pointing out that retail sales from January to November dropped 4.8 percent year-on-year.

"For the sake of ensuring the security of development amid external uncertainties, efforts to boost domestic demand should also be stepped up," said Luo Zhiheng, chief macroeconomic analyst at the research institute of Yuekai Securities.

His words echoed Xi's remarks in an article published on Nov 1 in Qiushi Journal, which said the pandemic may intensify waves of de-globalization, and expanding domestic demand will help the Chinese economy achieve sustainable development against this backdrop.

With a population of 1.4 billion and per capita GDP exceeding $10,000, China has the world's largest and most promising consumer market. The upgrading of household consumption, combined with modern technology and modes of production, will create huge room for growth, Xi said in the article.

Luo said that the consistent reform measures would overcome the bottlenecks constraining domestic demand, while short-term stimulus would have few long-term benefits but sizable side effects, Luo said.

Improvements in the tax and transfer payment regime are expected to boost the income of low-income residents, he added.