The 2024 Central Economic Work Conference pointed out that "China's economic foundation is stable, with many advantages, strong resilience, and great potential, and the supporting conditions and basic trends for long-term improvement have not changed", and listed "vigorously boosting consumption, improving investment efficiency, and expanding domestic demand in all aspects" as the top nine key tasks that need to be done well in 2025. Consumption, investment, and exports are the three driving forces behind economic growth, with consumption and investment being domestic demand and exports being external demand. In the first three quarters of 2024, the economy grew by 4.8%, with final consumption expenditure, total capital formation, and net exports of goods and services driving GDP by 2.4%, 1.26%, and 1.14%, respectively. It can be seen that domestic demand is the fundamental driving force for China's economic development. From the perspective of the relationship between consumption and investment, potential consumption and effective investment are never separated, but complement and support each other. On the demand side, the industrial upgrading brought about by consumption upgrading on the supply side will generate new investment demands; On the supply side, effective investment can not only meet high-quality consumer demand, but also further lead and create new consumer demand. When consumption expands or investment grows, consumption and investment will promote further expansion of investment and consumption through their interaction, forming a virtuous cycle of mutual promotion between investment and consumption. To address the current issue of insufficient domestic demand, efforts need to be made to vigorously boost consumption, increase investment returns, and form a strong synergy between potential consumption and effective investment to accelerate the expansion of domestic demand. Vigorously boosting consumption and establishing a long-term mechanism conducive to expanding household consumption, the proportion of final consumption expenditure to GDP in developed countries is generally around 80%. In 2023, the final consumption of Chinese residents will account for 56% of GDP, with vast room for improvement in the future. To vigorously boost consumption, it is necessary to establish a long-term mechanism that is conducive to expanding household consumption. Promote income growth and burden reduction for low - and middle-income groups, and enhance residents' consumption capacity. On the one hand, further improve the reform of the factor distribution system, increase residents' wage income and property income; On the other hand, we will deepen the reform of the individual income tax system and further expand the scope and intensity of individual income tax deductions. In addition, continuously increasing the policy combination effect of consumer vouchers will further stimulate the vitality of the consumer market. Take multiple measures to tap into consumer potential and focus on improving residents' consumption levels. From the perspective of consumption structure, the low proportion of final consumption expenditure of Chinese residents to GDP is mainly reflected in insufficient service consumption. To this end, we should innovate diversified consumption scenarios, strive to expand service consumption, continuously deepen reforms in education, elderly care, medical care, health and other fields, and further improve the quality of service consumption. Vigorously develop the first-time economy, ice and snow economy, and silver economy, promote the development of cultural tourism industry, provide residents with richer consumption scenarios, and enhance their consumption level. Continuously optimizing the consumption environment and further enhancing consumer willingness. A good consumption environment can boost consumer confidence and increase willingness to consume. To this end, we should continue to promote the formulation and revision of national and relevant industry standards in the field of livelihood consumption, especially in key areas of service consumption such as accommodation, catering, and housekeeping, and continuously improve the quality of residents' consumption. Guide enterprises to operate with integrity and compliance, give full play to the important role of government regulation in regulating market order, strengthen departmental linkage, severely crack down on false advertising, price fraud, unfair terms and other chaos, and create a consumer environment that reassures the public. Establish a dispute resolution mechanism to promptly and effectively respond to reasonable consumer demands. Continuously deepen the special action on consumption and strengthen the implementation of the "two new" policies. Since July 2024, 300 billion yuan of ultra long-term special treasury bond has been used to strengthen support for large-scale equipment renewal and consumer goods trade in, effectively promoting the accelerated release of consumption potential. By making good use of the central finance and super long term special treasury bond support funds, all regions have made overall efforts to promote the exchange of cars for "energy", home appliances for "intelligence", home furnishings for kitchens and bathrooms for "renewal", and electric bicycles for "old for new", and have achieved positive results in promoting consumption. According to data from the Ministry of Commerce, as of December 9, 2024, the total number of cars exchanged for new in China has exceeded 5 million. Improving investment efficiency, establishing an endogenous growth mechanism for effective investment, and increasing investment returns are the clear directions for the investment field at this Central Economic Work Conference. This means reducing ineffective and inefficient investment and establishing an endogenous growth mechanism for effective investment will be the key work in the future investment field. Optimize investment structure and focus on expanding effective investment. On the one hand, gradually phasing out investment projects in areas with excess capacity and redundant construction, and reducing the proportion of investment in these areas; On the other hand, we will focus on key core technologies, digital infrastructure, strategic emerging industries, and further increase investment efforts. Special attention should be paid to regional differences in optimizing investment structure, with emphasis on investment based on the industrial advantages and development foundations of the eastern, central, and western regions. Intensify support for "dual" projects and further expand investment and financing channels. In promoting the implementation of major national strategies and security capacity building projects in key areas, we will increase the investment of ultra long term special treasury bond. Make good use of the leverage role of government guided funds in major projects, further attract various financial institutions and social capital to participate in major project construction, strengthen the cooperation between finance and government, and establish a new mechanism for government and social capital investment and financing cooperation. Further enhance policy incentives and stimulate the vitality of private investment. Strengthen the implementation of policies and measures to promote the development of private capital investment and financing, and enhance the enthusiasm of private capital. Optimize the investment environment and maintain a fair market competition order. Simplify the investment approval process, improve project approval efficiency, and effectively manage various irregularities in investment attraction. To solve problems in the investment process of enterprises with one-stop and full chain service standards, reduce institutional transaction costs, and create a fair and competitive investment market environment. Accurate matching of supply and demand, realizing the benign mutual promotion of consumption and investment. Consumption plays a fundamental role in driving economic growth, and effective investment plays a key role in it. Effective investment can meet consumers' higher-level consumption, and high-quality consumption is also an important force driving effective investment. We should accelerate the formation of a situation where potential consumption and effective investment promote each other. In the first three quarters of 2024, in terms of fixed assets investment, investment in high-tech industries increased by 10.0% year on year, of which investment in high-tech manufacturing and high-tech service industries increased by 9.4% and 11.4% respectively; In terms of household consumption, basic living expenses are relatively stable, while upgraded goods consumption continues to improve, with retail sales of communication equipment and sports and entertainment products increasing by 11.9% and 9.7% respectively. This indicates that a situation is emerging in China where potential consumption and effective investment mutually promote each other. To accelerate the formation of a virtuous cycle of mutual promotion between consumption and investment, it is necessary to establish a real-time dynamic adjustment mechanism for precise supply-demand matching. On the demand side, fully leverage the fundamental role of consumption. At present, there is a clear trend of consumption upgrading, with the continuous emergence of digital consumption, service consumption, and green consumption, which have a positive impact on investment scale and structure. From the perspective of consumer terminals, changes in consumer demand will motivate investment entities to adjust their production structure and change their investment direction. The rapid changes in the investment and financing market are aimed at adapting to new consumer demands. On the supply side, further leverage the crucial role of effective investment. On the one hand, effective investment can promote the improvement and expansion of residents' consumption quality. With the continuous improvement of residents' quality of life, only by adjusting the supply structure of service products in a timely manner can we continuously meet higher-level service consumption needs; On the other hand, effective investment can lead and drive new service consumption. When investment brings better service products and a better consumption environment, it can effectively stimulate consumption potential and lead new consumer demands. Coordinate the dynamic balance of supply and demand, and form a mutually reinforcing mechanism. Efforts should be made to resolve the contradiction between supply and demand, unblock the bottlenecks in the circulation of consumption and investment, drive effective investment growth with potential consumption demand, and drive high-quality consumption with effective investment, continuously meet the people's aspirations for a better life, and ultimately form a virtuous mutual promotion mechanism between consumption and investment. Authors: Fang Honglin (Researcher at Heilongjiang Academy of Social Sciences), Wang Pengfei (Associate Professor at Luoyang Normal University)