The Central Economic Work Conference pointed out that "vigorously boosting consumption, improving investment efficiency, and expanding domestic demand in all aspects". Investment is both a current demand and a future supply. The investment that plays a role in economic growth refers to effective investment. Blind investment, repeated investment, and ineffective investment not only fail to drive economic growth, but also lead to capital waste, broken capital chains, and even systemic financial risks. The key to expanding investment lies in expanding effective investment and improving investment efficiency. This can not only meet current demand, but also create new demand, promote economic growth from both the demand and supply sides, and is an important policy direction for macroeconomic regulation next year. Expanding effective investment and improving investment efficiency have been proven through practice to be important ways to cope with downward pressure and promote sustained economic growth. One of the important reasons for China's tremendous economic success over the past 40 years of reform and opening up is the sustained large-scale investment in key areas and industries. Expanding effective investment and improving investment efficiency can promote the improvement of total factor productivity and economic growth from multiple aspects such as promoting technological progress, labor transfer, human capital accumulation, and opening up to the outside world. According to estimates, for every 10% increase in investment in China, the growth rate of total factor productivity can increase by 1.2%. Since the reform and opening up, China's investment has grown at an average annual rate of over 16%, driving an average annual GDP growth of 3.6 percentage points and contributing an average annual rate of 37% to economic growth. Especially since the 18th National Congress of the Communist Party of China, China's investment rate has remained above 40%, with an average annual GDP growth driven by investment of 2.3 percentage points and an average annual contribution rate of 41% to economic growth. During the response to SARS, the international financial crisis and the COVID-19, China has timely introduced major measures to expand effective investment, which has played a key role in stabilizing economic growth. Since the beginning of this year, under the complex domestic and international situation, the downward pressure on the economy has increased. The Party and the state have focused on key areas and key links, played the guiding and driving role of government investment, fully mobilized the enthusiasm of private investment, and vigorously launched a package of incremental policies that are both beneficial to the current and long-term. By promoting effective investment and steadily expanding, it has effectively reversed market expectations and boosted the investment confidence of business entities. From January to October, despite a 10.3% decline in real estate investment, overall investment achieved stable growth, and the economic operation remained stable with progress. Expanding effective investment and improving investment efficiency are important means to address the current shortage of total demand and fill the gaps and weaknesses in economic and social development. Currently, facing a more complex domestic and international environment, China urgently needs to actively expand domestic demand by increasing investment. On the one hand, there is still a problem of insufficient investment in China's overall output, and there are many weaknesses that urgently need to be addressed, such as insufficient supply of universal resources such as education, healthcare, and elderly care, heavy urban renewal tasks such as the construction and renovation of urban underground pipelines, and a gap in the development level of emerging and future industries compared to some developed countries. On the other hand, the problem of structural investment shortage in China is still quite prominent. Unlike some industrialized countries that commonly face constraints on productivity growth such as a lack of large-scale investment opportunities and relatively insufficient investment, although there may be structural overcapacity in certain fields and regions, China still has a large number of potential investment opportunities. China is currently in a critical period of building a modern infrastructure system, and there is still room for investment in optimizing infrastructure structure and functions. For example, the level of infrastructure connectivity and coordination in China needs to be improved, and the pressure of traffic congestion in large cities is increasing. However, infrastructure construction in central and western regions, rural areas, and remote areas still needs to be strengthened. Increasing investment in relevant fields and accelerating project construction can inject new impetus into promoting high-quality economic and social development. Expanding effective investment and improving investment efficiency are important drivers for better strengthening the mutually reinforcing relationship between consumption and investment, promoting mutual promotion and a virtuous cycle between consumption and investment. They are also important means and key links for coordinating the expansion of domestic demand, deepening supply side structural reform, and promoting high-quality development. Marx, when discussing the relationship between consumption and production in Capital, pointed out that production and consumption have a direct identity, "production is consumption, consumption is production"; Production creates and determines consumption. 'Production produces consumption'. Production not only creates consumer goods, but also creates consumers. From the perspective of the process of social reproduction, production is the truly active factor and the 'dominant factor'. Consumption, as the goal of production, is an 'internal factor' of the social reproduction system; Consumption has a huge counter effect on production. 'Consumption produces production', and consumption is the 'conceptual intrinsic motivation' of production. Investment can provide products, scenarios, and conditions for consumption, and the expansion of consumption scale and quality upgrading can also promote the release of investment demand and lead the optimization of investment structure. Consumption can provide the foundation and direction for effective investment and long-term economic growth, while investment is the key to providing supply for effective demand to achieve economic growth, support income, and consumption. Further breaking through the bottlenecks and blockages that hinder the positive interaction and cycle between consumption and investment can stimulate potential consumption, expand effective investment, and achieve a good interaction between investment and consumption in a "1+1 GT; 2" manner. Next year and for a longer period of time, China will still be in a critical period of transforming its development mode, optimizing its economic structure, and transforming its growth drivers. Expanding effective investment and improving investment efficiency are still prerequisites for carrying out production and creating employment, and are important levers for macroeconomic cross cycle and countercyclical regulation and promoting stable economic growth. Looking ahead to 2025, with the acceleration of a number of tangible and effective reform measures such as stimulating the vitality of business entities and revising the negative list of market access, which will promote sustained and healthy economic development, the policy synergy effect will be further released, jointly promoting stable investment growth and continuous structural optimization, providing strong support for stimulating endogenous growth momentum of investment and promoting high-quality economic and social development. Expanding effective investment and improving investment efficiency are important supports for promoting the basic realization of socialist modernization. China is currently in a critical period of seizing opportunities from the technological revolution and responding to the restructuring of the global industrial chain. In order to successfully achieve the goal of basically realizing socialist modernization by 2035 and building China into a socialist modernized strong country by the middle of this century, it is still necessary to maintain a considerable investment intensity, moderately increase central budget investment, strengthen the coordination between finance and public finance, effectively drive social investment with government investment, and effectively stimulate investment vitality. China's manufacturing industry, especially in the fields of high-end manufacturing, equipment manufacturing, and intelligent manufacturing, still requires significant investment to promote innovation driven development and build a modern industrial system. According to World Bank data, in 2019, China's mid to high end manufacturing industry accounted for 41.5% of the manufacturing industry, while the United States, Japan, and Germany accounted for 47.1%, 56.6%, and 60.7%, respectively. China still has a certain gap compared to developed countries. There are still many shortcomings in China's productive service industry, such as bottlenecks in industrial software, artificial intelligence algorithms and computing power, and high logistics and financial intermediary costs. Investment in these areas is also of great significance for improving total factor productivity and developing new quality productivity. At the same time, in order to solve the key and difficult problems that hamper the construction of Chinese path to modernization, and focus on the implementation of national major strategies such as rejuvenating the country through science and education, innovation driven, new urbanization, and the Yangtze River Economic Belt, as well as security capacity building in key areas such as food, energy resources, and industrial chain supply chain, we still need to focus on increasing investment, giving greater support to "two major" projects, and planning the "fifteenth five-year plan" major projects as soon as possible. We must adhere to the combination of project construction and supporting reforms, continuously improve relevant policies, plans, and institutional mechanisms, further improve investment mechanisms, optimize the investment environment, and enhance investment efficiency. For example, there are still 170 million migrant workers and their accompanying families who have not yet settled in cities and towns in China, and the removal of soft and hard constraints on them, such as the reform of the registered residence system, the reform of the social security and provident fund system, and the construction of affordable rental housing, will bring a lot of investment opportunities and huge space for productivity growth, laying a solid foundation for achieving the second centennial goal on schedule. Author: Wu Sa (Deputy Director of the Economic Research Institute of the National Development and Reform Commission)