Two Sessions | Tsinghua University School of Economics and Management Associate Professor and Deputy Director of the China Institute of Fiscal and Taxation Wu Binzhen: Improve institutional design and strengthen coordination to guide more social resources to "invest in people"

The government work report states that this year’s fiscal expenditure will continue to maintain a substantial scale, with ongoing efforts to optimize the expenditure structure, paying more attention to supporting consumption, investing in people, and ensuring people’s livelihoods. How can we better promote the integration of “investment in physical assets” and “investment in people”? During the 2026 National People’s Congress, Securities Times interviewed Wu Binzhen, Associate Professor of Economics at Tsinghua University School of Economics and Management and Deputy Director of the China Fiscal and Taxation Research Institute.

Wu Binzhen said that the government work report repeatedly mentions enhancing policy coordination, listing boosting consumption, investing in people, and safeguarding people’s livelihoods side by side, which reflects this coordination. “Investing in people” is closely related to residents’ income growth, which can enhance residents’ risk resistance and serve as a long-term mechanism to boost consumption. At the same time, safeguarding education, healthcare, elderly care, and childbirth welfare is also an embodiment of “investment in people,” which can effectively ease residents’ worries, reduce precautionary savings, and enable residents to truly “dare to consume and want to consume.”

Regarding the deployment to closely combine “investment in physical assets” and “investment in people,” Wu Binzhen believes this actually represents a substantive shift in policy orientation. In the past, investment emphasized material capital, such as infrastructure and industrial projects, focusing on supply-side stimulation of the current economy. Now, emphasizing “investment in people” highlights demand-driven growth, focusing on improving human capital and health capital, fostering long-term momentum while maintaining growth.

On the future direction of integrating “investment in physical assets” and “investment in people,” Wu Binzhen told Securities Times that he expects focus on three dimensions:

First, in terms of institutional design, establishing a fiscal fund adjustment mechanism that allows “money to follow people,” encouraging investment in physical assets that is people-centered. Wu further analyzed that deepening the “people-land-money” linkage mechanism across regions is expected to promote fiscal funds closely tied to the permanent resident population. Based on balanced per capita infrastructure and public service expenditures, breaking household registration barriers can also ensure funds follow people. Meanwhile, investments in quality communities, schools, and hospitals will increase with population inflow, incentivizing physical capital to serve people, and population migration will also drive consumption.

Second, in terms of technological change, making forward-looking and targeted investments in both people and physical assets. In the face of a new round of technological revolution, there is a need to increase subsidies for skills training, building a lifelong learning system based on community colleges or learning centers. Additionally, support for helping unemployed and low-income groups should be strengthened.

Wu Binzhen stated that high-quality talent is the most critical variable in current national competition. There is a need to quickly improve the quality and capacity of higher education, encourage social capital participation, optimize university layouts, and promote university reforms in a categorized manner.

Regarding population, Wu suggests continuing to build a fertility-friendly society, increasing childcare subsidies, universal preschool care, and extending free preschool periods. While investing in physical infrastructure like community elderly care or childcare facilities, efforts should also be made to strengthen training for caregivers and other human investments. Improving livelihoods while promoting service consumption and developing the silver economy.

Third, in terms of fiscal, financial, and social security policy coordination, there is potential to guide more social resources to “invest in people” through evaluation linkage incentives. Specifically, Wu believes that compared to traditional infrastructure, some education, healthcare, and elderly care projects have long return cycles and require more policy support. This can be achieved through special bonds, PPP models, tax incentives, and other means to attract private capital. Meanwhile, policies such as subsidies can reduce household expenditures in these areas, releasing more consumption potential.

To improve employment environment, it is important to avoid overburdening enterprises due to increased social welfare. Wu suggests considering tax reductions or deferrals for social security contributions for enterprises employing youth and migrant workers to increase employment and investment.

In optimizing evaluation systems, Wu recommends including indicators such as consumption or income growth and human capital accumulation in local government assessments to encourage greater emphasis on human development.

Wu Binzhen told Securities Times that, in summary, by improving institutional design, optimizing structures, and strengthening coordination, we can better realize the integration of “physical assets” and “people,” boosting consumption, improving livelihoods, and cultivating new growth drivers, thereby laying a solid foundation for high-quality development.