Investing in People: What It Means and How to Do It

The Outline of the 15th Five-Year Plan (2026-2030) sets out major arrangements for investing in people with a view to advancing Chinese modernization across the board. This major strategic measure, put forward by the CPC Central Committee based on its accurate assessment of China’s economic and social development trends and its resolve to address unbalanced and inadequate development, provides essential guidance for implementing the strategy of expanding domestic demand and increasing effective investment during the 15th Five-Year Plan period.

Investment is a vital engine of economic and social development. The proposal to invest in people is a response to the new demands of China’s economic and social development as it enters a new stage, marking a major shift in the CPC’s investment philosophy. On the one hand, after decades of rapid economic growth, traditional infrastructure investment in China has passed its peak. Meanwhile, manufacturing is in urgent need of transformation and upgrading, as some sectors face overcapacity while investment in traditional industrial capacity expansion remains sluggish. On the other hand, notable weak links remain in public services, such as education, medical services, eldercare, and childcare. While there is considerable room for further investment in these areas, failing to address them will not only affect people’s daily lives but also limit domestic demand potential. Government investment should therefore shift further from the economic domain toward social services and public welfare, with a greater focus on areas most vital to people’s daily lives, so as to make basic public services increasingly accessible and equitable. This is essential to meeting people’s aspiration for a higher quality of life and promoting well-rounded personal development.

There is growing consensus today that we must invest in both physical assets and people. However, some local authorities still fail to fully grasp the relationship between the two, and in particular, misunderstand what investing in people truly entails. This can lead to poorly targeted or even misguided policies, undermining the effective implementation of the CPC Central Committee’s decisions and plans. In light of this, a deeper understanding is required in the following three aspects regarding investing in people.

First, investing in people is itself a form of investment, not merely spending on individuals

One view holds that investing in people is synonymous with human capital investment, encompassing primarily education, skills training, and the like. While human capital is certainly important for economic development, it does not fully capture the meaning of investing in people, nor is it a sufficient answer to the pressing issue of insufficient effective demand that we face today. It is a misconception to view investment in physical assets and investment in people simply in terms of“hardware” and“software.” The Outline of the 15th Five-Year Plan, in its section on“Building a Robust Domestic Market and Accelerating Efforts to Create a New Pattern of Development,” explicitly states that China will combine investment in physical assets and investment in people. The aim is to use new demand to drive new supply, thereby enhancing the internal momentum of the domestic economy and ensuring its reliable performance. The purpose of investing in people is to expand domestic demand. As a form of investment rather than consumption, it is a part of efforts to expand effective investment, and should not be simply understood as “spending on individuals.” Investing in people is, in essence, an investment. It is an investment that will deliver results in both physical assets and people’s wellbeing. The two dimensions are integrated and unified within the concept of “investment.” Bringing them into close alignment means optimizing the investment structure, with a greater share of government investment going to public welfare, so as to improve the overall efficiency of investment and enable it to meet the needs of the population.

Second, investing in people means making an investment in people, not merely spending on them

Another view argues that, at the policy level, the understanding of investment has broadened beyond physical assets, encompassing social welfare measures, such as raising rural pension benefits and improving public services, which were once regarded merely as expenditures. However, classifying all such people-related spending as investing in people would overextend the definition of investment. Investing in people refers to investment for promoting people’s well-rounded development, rather than merely spending money on them. Investment and expenditure are two distinct concepts. In economic terms, investment refers to activities undertaken by economic actors to obtain future returns, which essentially sacrifices current consumption in exchange for greater future value. Expenditure, by contrast, may include spending that boosts personal consumption, such as fiscal transfer payments and increases in basic pension benefits for urban and rural residents. In actual economic practice, government investment and government expenditure are handled through two separate systems: investment is administered by development and reform departments, while expenditure is administered by fiscal departments. Hence, not all fiscal spending on people counts as investment in people. Raising the share of government investment and fiscal spending on people’s wellbeing are two distinct objectives. The former pertains to optimizing the structure of government investment, while the latter aims at optimizing the structure of fiscal expenditure within the government budget. They are distinct not only conceptually but also in terms of their practical policy implications.

Investment in education, healthcare, employment, housing, and other social sectors is integral to investment in people.
1. Students from Qingdao Technical College attend a robotics practical training course, March 26, 2026. PHOTO BY XINHUA REPORTER LIZIHENG
2. Xiong’an Xuanwu Hospital in Xiong’an New Area, Hebei Province, May 4, 2024. PEOPLE’S DAILY / PHOTO BY WANG ZIRUI
3. Job seekers talk with recruiters at a job fair held at Hunan Normal University, April 18, 2026. PHOTO BY XINHUA REPORTER CHEN ZHENHAI
4. The Modian old street in Hefei, Anhui Province, January 31, 2026. PHOTO BY XINHUA REPORTER ZHANG DUAN

Third, investing in people means making an investment in people’s wellbeing, not merely spending on social welfare programs

Yet another view suggests that investing in people means ensuring people’s wellbeing, that is, simply handing out cash and spending on the public. This undoubtedly misreads the intention of the CPC Central Committee. Investing in people is by no means synonymous with spending on social welfare programs. The 2026 government work report explicitly states that more will be done to optimize the spending structure so that fiscal funds are used more cost-effectively, with priority given to boosting consumption, investing in people, and raising living standards. Clearly, investing in people here is placed alongside boosting consumption and ensuring people’s wellbeing, and therefore should not be confined to projects that overlap with ensuring people’s wellbeing. In fact, since the implementation of the 14th Five-Year Plan (2021- 2025), China has consistently prioritized ensuring and improving people’s wellbeing in its fiscal spending. Fiscal expenditures on people’s wellbeing have accounted for over 70 percent of total expenditure in the national general public budget, with cumulative spending in this area reaching nearly 100 trillion yuan. In some localities, especially at the primary level, the vast majority of government expenditure is allocated to people’s wellbeing. Given the current difficulty in maintaining a balanced budget, particularly in light of the limited fiscal capacity of some local governments, treating all wellbeing programs as investment in people and blindly pursuing excessively high standards would amount not merely to a conceptual misinterpretation but also to policy distortions. In practice, this could foster irrational public expectations and impose undue pressure on local public finances.

Faced with the prominent challenge of insufficient effective demand and the imbalance between strong supply and weak demand, promoting investment in both physical assets and people is an important direction and strategic task for expanding domestic demand and building a strong domestic market during the 15th Five-Year Plan period. This year marks the first year of the 15th Five-Year Plan. The government work report has identified “well-rounded personal development” as one of the three major priority investment areas for this year. Following the guidelines of the Outline of the 15th Five-Year Plan and the government work report, we should identify the entry points where investment in physical assets and investment in people can be effectively combined. As such, the focus should be on addressing pain points, bottlenecks, priorities, focal points, and emerging hot topics, so that investment in people truly delivers tangible results.

First, increase investment to address pain points in social sectors that affect people’s wellbeing

Currently, it is imperative to increase government investment in social sectors, such as education, medical care, services for eldercare and childcare, and other areas that affect people’s wellbeing. For instance, given regional disparities and an overall shortage of senior secondary school places, efforts should be made to expand such supply, with particular emphasis on improving the basic conditions of county-level regular senior secondary schools, so as to ease public concerns over school choice. To address inadequate inpatient conditions that fall short of patients’ needs, support will be provided for hospitals to renovate wards, converting four-bed and above rooms to two- or three-bed rooms. In response to the growing demand for eldercare, support should be given to upgrading the quality and renewing the equipment of public eldercare facilities, and to advancing age-friendly and barrier-free retrofits of public facilities.

Second, increase investment to address bottlenecks in granting permanent urban residency to people moving from rural areas to cities

Granting permanent urban residency to people moving from rural areas to cities in a well-conceived and systematic manner is a key task for the 15th Five-Year Plan period. At present, a major bottleneck in this process is that many public services and social welfare programs remain tied to household registration. Once rural migrants obtain urban residency, this directly adds to the fiscal burden on local governments, particularly with regard to education and housing. With a focus on regions with population inflows, efforts should be made to expand the supply of government subsidized housing, improve regular senior secondary schools, and extend access to public rental housing for eligible urban residents without local household registration. We should also, in light of local conditions, relax exam eligibility requirements for children of rural migrant workers, so that they can take secondary school entrance examinations in their current place of residence. By doing so, we can better ensure their equal access to basic education.

Third, increase investment in priority projects for developing modern metropolitan areas

Developing modern metropolitan areas is a key direction for advancing people-centered new urbanization during the 15th Five-Year Plan period. Building efficient and accessible intercity commuting networks is a prerequisite for fostering tiered and well-coordinated industrial ecosystems and accessible and shared living circles. Such networks are also a core priority for developing modern metropolitan areas. The focus should be on improving metropolitan commuting efficiency and unlocking intercity routes to relieve traffic bottlenecks. To this end, efforts will be made to accelerate the completion of intercity railways such as the Beijing-Binhai New Area Intercity Railway and the Shenzhen International Airport-Dayawan Intercity Railway, make use of existing rail lines to operate inter-city and suburban rail services, and build a number of national expressway ring roads for major metropolitan areas.

Fourth, increase investment in tackling focal points for high-quality urban renewal

Advancing urban renewal is a key initiative for enhancing the quality of urbanization. Priority should be given to the development of projects for ensuring the safety of urban infrastructure lifelines, and accelerating the renovation of aging pipelines and dilapidated urban housing. The 15th Five-Year Plan period will see formidable tasks and a vast number of projects in this field. For example, with regard to pipeline renewal, we need to build and renovate about 200,000 kilometers of urban gas pipelines, 175,000 kilometers of drainage pipelines, 175,000 kilometers of water supply pipelines, 100,000 kilometers of sewage pipelines, and 120,000 kilometers of heating pipelines. For dilapidated housing, we need to renovate some 500,000 urban units and 115,000 old residential areas. Meanwhile, we will renovate urban villages—former rural settlements incorporated into expanding cities—in a steady and orderly manner. We will also upgrade around 1,500 old urban blocks and former factory areas. All these projects require significant investment and are key measures for improving people’s wellbeing.

Fifth, increase investment in current hot topics in cultural tourism infrastructure

Vigorously developing cultural tourism to deliver a better quality of life for the people is an important dimension of investing in people. Greater efforts should be made to improve public tourism services and enhance the visitor experience. To this end, we should accelerate the improvement of tourism infrastructure and further develop public service facilities, such as tourist service centers (tourist information centers), tourist transport hubs, public tourism service information platforms, and public restrooms. Support will be provided for high-quality outdoor recreation destinations to upgrade supporting facilities for public services and emergency rescue. An initiative will be launched to double the number of electric vehicle charging facilities within three years, and the construction of consumption infrastructure including charging facilities, parking lots, and tourist routes will be accelerated.

Yin Yanlin is Member of the National Committee of the Chinese People’s Political Consultative Conference and Deputy Director of its Committee on Economic Affairs.

(Originally appeared in Qiushi Journal, Chinese edition, No. 12, 2026)