The "15th Five-Year Plan" proposal, adopted at the Fourth Plenary Session of the 20th CPC Central Committee, explicitly stated that "we must adhere to the principle of closely integrating improving people's livelihoods with promoting consumption, and investing in both material and human resources." From the "Government Work Report" at the Two Sessions early last year to the "15th Five-Year Plan" proposal, and then to the recently held Central Economic Work Conference, this important proposition has been continuously deepened. Consequently, my country's investment philosophy is evolving and undergoing a profound transformation from simple factor expansion to a synergistic development of both material and human capital, which is of great significance for achieving high-quality development and comprehensively building a modern socialist country.
Innovative measures to address complex challenges at home and abroad
Human beings are the most active, dynamic, and decisive element among all factors of production. They occupy a central position in economic activities and management practices. The subjective initiative, innovative ability, and comprehensive quality of laborers are the core driving force for the development of productive forces. Marx and Engels attached great importance to human beings and their development, emphasizing that improving and developing human capabilities is an inherent requirement for promoting human and social development. Marx envisioned a communist society as a "free association of individuals," which presents a new picture of "realizing the all-round development of human beings." "Investing in people" is an inevitable requirement for realizing the free and all-round development of human beings. Examining the concept of "investing in people" requires a deep understanding of its distinct characteristics and practical orientation within the context of social development and historical processes, revealing the realistic background and historical inevitability of its formation and emergence.
"Investing in people" refers to allocating more resources to areas related to people's livelihoods, such as education, employment, healthcare, and social security, focusing on enhancing people's capabilities, health, career development, and potential, thereby driving high-quality economic development through the release of consumption potential and the improvement of human capital. Human capital is key to economic growth, and the essence of "investing in people" is to transform "human resources" into sustainably value-added "human capital" by improving people's knowledge, skills, health, and social adaptability. This investment emphasizes developing people's inherent potential and improving labor productivity, thereby promoting economic growth. In practice, emphasizing "investing in people" is a strategic choice made in response to new changes in economic and social development.
Meanwhile, the concept of "investing in people" is a major innovative move by my country to address complex domestic and international challenges. Against the backdrop of an accelerating restructuring of the global innovation landscape and profound adjustments to industrial and supply chains, competition in comprehensive national strength has shifted from traditional resource endowment to competition in innovation capabilities and high-level talent. The World Intellectual Property Organization's "Global Innovation Index 2025" shows that China has entered the top 10 of the UN's annual ranking of the most innovative countries for the first time. Although included in the "talent champion" group, China still lags behind developed countries and regions in various indicators. To achieve the grand goal of building a science and technology powerhouse, it is necessary to further increase investment in innovation resources and accelerate talent cultivation. The concept of "investing in people" is a strategic response to how to seize opportunities and meet severe challenges in this era, and it is also an inevitable choice for achieving high-level scientific and technological self-reliance, enhancing national core competitiveness, and seizing the commanding heights of international competition.
Achieving dual empowerment through investment in things and investment in people.
The 15th Five-Year Plan proposed the important strategy of "closely integrating investment in things and investment in people," providing guidance for my country to further optimize its investment structure, cultivate a strong domestic market, and stimulate economic growth during its high-quality development stage. Investment, as one of the "three driving forces" of economic development, directly impacts the steady and sustainable development of the economy. Human capital can activate people's creative potential, helping economic development shift from traditional factor-driven to human capital-driven growth, achieving exponential growth in investment returns and increasing people's consumption capacity. Therefore, "investing in people" is proposed in contrast to "investing in things," reflecting an investment philosophy that considers both things and people, and representing an improvement over past investment models, capacity expansion models, and even the entire development model. However, emphasizing "investing in people" does not mean neglecting or weakening "investing in things," but rather closely integrating the two. It represents an enhancement and optimization of my country's current investment philosophy, direction, and priorities, achieving an organic unity between economic and social development and the comprehensive development of people. Promoting the close integration of investment in things and investment in people requires building a collaborative mechanism with a systems thinking approach to achieve a two-way synergy between the carrying capacity of "things" and the empowerment of "people."
First, we will strengthen top-level overall planning and incorporate both into the overall development plan. When planning material investment projects such as new infrastructure and high-end manufacturing, we will simultaneously plan vocational education bases and skills training centers, and promote the "talent preparation before industry develops" model to ensure that industry and education resonate in tandem.
Second, optimize the allocation of investment structure. Material investment should focus on key areas such as new infrastructure and projects that improve people's livelihoods, increasing balanced investment between urban and rural areas. Human capital investment should precisely align with industry needs, conducting specialized training in digital technology, high-end equipment, and other areas to improve the matching degree between the labor force and the market.
Third, innovate collaborative mechanisms. Leverage the guiding role of fiscal funds, using tools such as tax incentives and special bonds to encourage enterprises to simultaneously increase investment in equipment upgrades and employee training. Establish a collaborative evaluation system for both equipment and personnel, incorporating the effectiveness of human capital improvement into investment assessments to avoid prioritizing equipment over personnel.
Fourth, we will facilitate the flow of factors of production and break down barriers to talent mobility. We will improve the incentive mechanism for skilled personnel, promote the concentration of human resources in key industries, and form a diversified and collaborative pattern of government guidance, market dominance, and social participation, so as to fully unleash the effectiveness of material capital and the dividends of human capital and inject lasting momentum into high-quality development.
Investing in people and promoting their all-round development
"Investing in people" no longer views people merely as "tools" for achieving development, but emphasizes that the realization of human value and the improvement of well-being are the goals of development itself. It aims to achieve the all-round development of people and the all-round progress of society by improving people's abilities and qualities, protecting their basic rights, and meeting their diverse needs.
On the one hand, the core of modernization is the modernization of people, and the key to achieving this lies in shaping values and establishing development orientation. The 2025 Government Work Report explicitly proposed promoting more financial resources to be "invested in people" and serve people's livelihoods, supporting expanded employment, increasing residents' income and reducing their burdens, and strengthening consumption incentives to form a virtuous cycle of economic development and improved livelihoods. Anchoring itself to development needs and people's expectations, "investing in people" will effectively alleviate concerns, stabilize social expectations, and boost consumer confidence. In particular, through consumption guidance, it can incentivize investment entities to focus on investment directions with reasonable returns, adjust production structures, reduce ineffective and inefficient investments, and form a smoother investment-consumption cycle.
On the other hand, "investing in people" is an urgent need for moving towards high-quality development. my country's economy has shifted from a stage of high-speed growth to a stage of high-quality development. The traditional development model, mainly driven by resource input and factors of production, is unsustainable and must shift to a high-quality development model led by innovation. Therefore, we must move beyond short-sighted development models that focus on material gains while neglecting people, and instead engage in long-term planning and continuous investment. We must further increase investment in areas such as education, healthcare, employment, elderly care, housing, and security, and through the organic synergy of economic and social policies, ensure that the fruits of development benefit all people more broadly and equitably, continuously improve and develop people's livelihoods, and effectively enhance the people's sense of gain, happiness, and security.
Currently, my country's population development has entered a new era, with the traditional demographic dividend gradually diminishing. Simultaneously, global industrial competition is shifting from a "capital-intensive" to a "talent-intensive" model. To drive the transformation of my country's economic growth mechanism and achieve innovation-driven and demand-driven growth, it is imperative to increase investment in people, promote human capital accumulation, and generate a "human capital dividend." Only in this way can we build long-term economic competitiveness and gain strategic initiative in the new round of technological revolution and industrial transformation. By investing in human capital and cultivating more highly skilled workers, the overall productivity and innovation capacity of society will be greatly enhanced, thus laying a solid foundation for common prosperity for all people.
Authors: Ma Xiaofen (Lecturer, School of Journalism, Renmin University of China), Chen Xinguang (Distinguished Professor, School of Economics, Shanghai University)
