New route: A motorist passes a line of electric scooters for sale in Hangzhou, Zhejiang province. The country is adopting new strategies to counter the real estate slump that has dogged the economy the past few years. — AP
BEIJING: A focus on supporting innovation in strategic emerging sectors, future industries and traditional industries will be high on the agenda as China advances its economic structural reforms.
Economists and entrepreneurs said that they aim to cultivate new, high-quality productive forces and facilitate a transition from traditional growth drivers to innovative ones.
They said the new quality productive forces will serve as a key driver for boosting the country’s economic growth in the coming years.
This will counterbalance the real estate slump, hasten the construction of a contemporary industrial framework, and foster superior development in the future.
Huang Hanquan, head of the Chinese Academy of Macroeconomic Research, said that fostering new quality productive forces is vital in promoting high-quality economic growth, boosting total factor productivity, and realising Chinese modernisation.
“Various regions and departments across China have embraced this approach to drive economic progress, which will significantly accelerate technological innovation, enhance industrial application and facilitate the shift of growth drivers from old to new ones,” Huang said.
According to a new report, despite geopolitical headwinds that are affecting China’s economic growth trajectory and momentum, the nation is achieving success by boosting investment in science and technology.
It is also refocusing its efforts to enhance capabilities in emerging industries, including artificial intelligence, autonomous vehicles and electric vehicles, which are key to reinvigorating China’s growth engine.
According to the Milken Institute’s Best-Performing Cities China Index, cities that were home to a significant number of tech hubs displayed a high level of economic resilience.
According to the report, Chinese cities that have strategically invested in emerging technologies will continue to thrive, even as the broader economy faces challenges.
Huang called for more efforts to achieve breakthroughs in core technologies by investing more in fundamental research, tackling choke points, and stepping up reforms in science and technology, and education.
He said that more efforts should also be made to advance reforms in the market-based allocation of production factors, allowing factors such as land, labour, capital and technology to flow freely and efficiently to fields of new quality productive forces.
Looking ahead, Huang said the country should foster new pillar industries, including next-generation information technology, new energy vehicles and materials, to offset the impact of the decline in real estate on China’s economy and create new growth drivers.
Huang’s remarks came after a resolution adopted in July at the third plenary session of the 20th Central Committee of the Communist Party of China placed significant emphasis on improving the institutions and mechanisms for fostering new quality productive forces in line with local conditions.
Justin Yifu Lin, dean of Peking University’s Institute of New Structural Economics, said that regions with development gaps should measure their progress compared with their past, rather than shifting their focus to the pursuit of success in frontier activities.
There are two types of new quality productive forces: one that invents new technologies and one that applies them, Lin said.
Therefore, applying new technologies in traditional sectors should be treated as part of the drive to harness new quality productive forces, he added.
“Regions with gaps in development should use new technologies to improve productivity. It’s essential to follow the principle of seeking truth from facts and develop according to competitive advantages,” Lin said.
China must better leverage the role of the market and tap the opportunity of technological innovation to enhance productivity.
This is so as it stands at the same starting line with other countries for the Fourth Industrial Revolution, which is an opportunity that China “cannot afford to miss”, he said.
The nation, which recently released a guideline to improve its market access system, is taking solid steps to optimise its business environment and foster new quality productive forces.
This marks the country’s key push to implement the resolution adopted at the third plenary session.
The guideline details 10 measures, including improving the negative list management model, strengthening the coordination of policies for domestic and foreign-funded enterprises, and optimising the market access environment for new forms of business and new sectors.
Liu Qiao, dean of Peking University’s Guanghua School of Management, said that opening-up and deeper institutional reforms will create room for improvement in resource allocation efficiency, leading to an increase in the growth rate of total factor productivity.
Liu noted that the path to new quality productive forces involves expanding into industries and fields that can enhance productivity and form new quality productive forces.
Lin added that there are two paths to achieving this objective.
“The first involves leveraging revolutionary technological changes to foster strategic emerging industries and future endeavors.
“This includes sectors associated with energy transition and digital transformation, as well as future-oriented industries like quantum computing and AI-driven big data.
“These will generate new momentum, accelerating total factor productivity growth. The second includes opportunities brought about by transformation and the upgrading of traditional industries.”
“Currently, the productivity in China’s agricultural and services sectors, for example, is relatively low, offering significant potential for increasing total factor productivity,” he said.
Global executives praised China’s reform initiatives, saying that they present opportunities for global stakeholders.
Nancy Wang, country manager at LinkedIn China, said that China’s vigorous pursuit of new quality productive forces centered on technological advancement, sending a signal of China’s readiness to face the challenges of globalisation.
Victor Tsao, vice-president of open-source solutions provider Red Hat and general manager of Red Hat Greater China, said: “We believe that through further reform and opening-up, and optimising the business environment, China will continue to attract more foreign enterprises.” — China Daily/ANN
