THE NEXT LEAP
New quality productive forces reshape China’s economic landscape
On March 6, when participating in a deliberation with fellow lawmakers from Jiangsu Province in east China, who were attending the Second Session of the 14th National People’s Congress (NPC), China’s top legislature, in Beijing, President Xi Jinping stressed developing new quality productive forces amid the country’s accelerated efforts to foster new growth drivers and promote high-quality development.
Earlier at the opening meeting the NPC session on March 5, Premier Li Qiang said the country will strive to modernize the industrial system and develop new quality productive forces at a faster pace.
The concept of new quality productive forces was first proposed by Xi during his September 2023 visit to Heilongjiang, China’s northeasternmost province. At a group study session of the Political Bureau of the Communist Party of China Central Committee last December, Xi said, with innovation playing the leading role, new quality productive forces mean advanced productivity that is freed from traditional economic growth mode and productivity development paths, features hi-tech, high efficiency and high quality, and comes in line with the new development philosophy.
New quality productive forces are driven by revolutionary technological breakthroughs, innovative allocation of production factors, and deep industrial transformation and upgrading, he added.
Technological innovation
Viewed through an economic lens, new quality productive forces will bring about significant changes to how growth is defined. For over four decades, China’s economy thrived on low-cost labor and high investment, and strong external demand. However, this model is now unsustainable due to rising costs, shifting demographics and international economic imbalances. The future demands a shift toward innovation-driven, high-quality development.
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In addition to enhancing industrial processes through innovation, these new quality productive forces will aim to be adaptive, to pioneer global industry evolution and create new competitive advantages. This new approach better aligns with China’s long-term goals for high-quality development.
The technology-industry collaboration is crucial and requires adaptive strategies at all levels of government. National and local authorities will play complementary roles in integrating innovation into economic policies and local development.
Jiang Pengju is vice mayor of Changzhou in Jiangsu and a member of the China Zhi Gong Party, one of the eight non-Communist political parties in China. He is also a member of the 14th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), the country’s top political advisory body.
Reflecting his commitment to fostering innovation at the local level, one of the nine proposals Jiang submitted at the Second Session of the 14th CPPCC National Committee, which took place in Beijing from March 4 to 10, is about deepening reform of the science and technology system to coordinate scientific and industrial innovation.
Jiang envisions a future where the seamless synergy between scientific breakthroughs and industrial application propels local development. In his proposal, he advocates a holistic strategy that encompasses the alignment of innovation goals, the integration of research and commercialization of academic outcomes, and the optimization of investment policies.
“In practical terms at the local level, reforming the science and technology system involves a diverse mix of elements, including platforms, innovators, supportive policies and robust institutional structures. All these components need to align to truly advance innovation, cultivate a t hriving ecosystem, and enhance the overall efficiency of the innovation process,” Jiang told Beijing Review.
Industrial upgrading
The industrial sector stands as a tangible symbol of productivity evolution, with the upgrading and enhancement of core industries playing a pivotal role in catalyzing significant leaps in productivity. Emerging strategic sectors and future-oriented industries like artificial intelligence are becoming the new bedrock and direction for industrial evolution and longterm growth. These sectors are distinguished by their exceptional efficiency, fervent embrace of innovation, technological sophistication, high-value output, and expansive potential, laying a fertile ground for the emergence and expansion of the new quality productive forces.
In recent times, China has seen a remarkable surge in these strategic
emerging industries, which contributed over 13 percent of the nation’s GDP in 2022. Notably, these sectors, which include electric vehicles (EVs), lithium-ion batteries and photovoltaic products, have witnessed rapid advancement, as well as the competitive edge in burgeoning domains like the digital economy.
With over three decades of dedication to the automotive sector, 60-year-old Zhang Xinghai stands as both a witness and a catalyst for the industry’s upgrading. The company he founded in the southwestern municipality of Chongqing, SERES, mirrors his journey—transcending its initial focus on automotive components to emerge as a frontrunner in the realm of sophisticated, intelligent and eco-friendly EVs.
Zhang has devoted the past year to visiting over 100 enterprises within the automotive industry, gaining an in-depth understanding of the sector’s challenges and contemplating solutions, culminating in the formulation of his proposals tabled at this year’s CPPCC National Committee session.
Zhang’s proposals particularly focus on the high-quality development of China’s intelligent connected EV industry. He emphasizes the crucial role of cultivating a high-caliber workforce across the entire spectrum of electrification and intelligent systems, as well as fortifying supply chain synergies.
“The development of intelligent connected EVs is crucial for China’s automotive industry to foster new quality productive forces. This calls for collaboration between all enterprises in the sector. The integration of intelligence and electrification is restructuring the supply chain, presenting great opportunities for Chinese automotive supply chain enterprises,” Zhang wrote in one proposal.
Talent support
Zhou Yuan, another member of the 14th CPPCC National Committee and a private entrepreneur, shares a story similar to Zhang’s.
In a group interview in Beijing on February 29, Zhou, CEO of Zhihu, China’s largest online Q&A platform, similar to Quora, underscored the intrinsic agility and proactive nature of private enterprises in navigating and harnessing emerging trends and opportunities, regardless of their initial scale. These enterprises are not merely participants but vital testing grounds for innovative concepts and frameworks, he said, adding that they spearhead the creation of new business models and formats, infusing the market with fresh momentum.
Zhou articulated a compelling vision where, in terms of both diversity and magnitude, private enterprises stand as a major driving force behind the cultivation of new quality productive forces, setting the stage for a dynamic and evolving industrial landscape.
Zhou also observes a burgeoning cohort of “new professionals” within China’s workforce. These are well-educated individuals, equipped with a blend of scientific knowledge, cultural acumen and specialized skills. Their arenas are the cutting-edge sectors of advanced manufacturing and the service industry. This group, projected to burgeon to a staggering 400 million, is distinguished by a commitment to continuous learning and skill enhancement. They stand as the backbone propelling the development of new quality productive forces with their expertise and innovative capabilities.
“From my observations, it’s clear that there’s been a significant crossindustry movement of professionals within China. This exchange is swiftly transferring skills, perspectives, and knowledge from one sector to another, creating what we call the knowledge dividend,” Zhou said.
Zhou emphasized the importance of meticulously understanding the unique attributes and requirements of the “new professionals.” He called for the provision of specialized services aimed at enhancing the professional skills of this group, a focal point of his proposals submitted at this year’s CPPCC National Committee session.
He posited that recognizing and nurturing these professionals are key elements in facilitating China’s shift from relying on its demographic advantage to leveraging a dividend based on an increasingly sophisticated workforce. Such a strategic pivot is anticipated to be a driving force behind future industrial progress, cultivating a new era of new quality productive forces, Zhou concluded.