BEIJING: China has laid out a top-level road map dedicated to accelerating the development of new quality productive forces, which officials and analysts said could better sustain long-term economic expansion as the world’s second-largest economy shifts toward new growth drivers.
The latest guidelines, jointly released on Friday by the Communist Party of China Central Committee and the State Council, China’s Cabinet, place greater emphasis on sci-tech innovation and its closer integration with industry, as well as stronger institutional support.
Developing new quality productive forces — a concept first proposed in 2023 — is “an intrinsic requirement and an important focus” of high-quality development, the guidelines say.
Authorities have acknowledged emerging challenges in putting the concept into practice, including poorly planned investment, neglect of upgrades to traditional industries and insufficient attention to reform.
To keep the process on the right track, the guidelines stress the importance of innovation-driven development, reform and measures tailored to local conditions, and following the approach of “establishing the new before abolishing the old”, an official from the National Development and Reform Commission said when elaborating on the document.
In line with those principles, the document sets out 19 measures in five areas, with technological innovation topping the agenda. Priorities include strengthening “original and disruptive innovation” and speeding up the commercialization of research findings. Companies are assuming a central role in innovation, with their research and development spending estimated to account for more than 77 percent of China’s total in 2025, according to the National Bureau of Statistics. That is close to the level of developed economies.
The guidelines seek to further strengthen that role, calling for the establishment of a corporate R&D reserve system and a higher rate of additional tax deductions for R&D expenses.
Furthermore, corporate R&D projects that meet national strategic needs will be designated as national projects under established procedures, the guidelines say.
Li Chao, chief economist at Zheshang Securities, said he sees room for the additional R&D tax deduction rate for technology companies to rise from 100 percent to 120 percent.
The measures mark a major shift from government-led to business-led allocation of innovation resources, said Fu Yifu, a researcher at Jiangsu Su Merchants Bank.
As companies assume a greater role in innovation, more targeted government intervention is required to strike the right balance between government and the market, the NDRC official said. Authorities should focus on correcting market failures and ensuring fair competition, while curbing wasteful spending and copycat projects.
The push for technological innovation also goes hand in hand with efforts to upgrade China’s industrial base.
“Developing new quality productive forces involves not only fostering emerging and future industries but also upgrading traditional sectors,” the NDRC official said.
To that end, the guidelines back companies’ use of digital, smart and green technologies to upgrade traditional industries, while seeking to foster new pillar industries and establish mechanisms to sustain investment growth and share risks in future industries.
In particular, the document gives priority to advancing the “AI Plus” initiative to expand AI applications across sectors. It also stresses the need to establish systems for technology monitoring, risk alerts and emergency response to ensure that AI is “safe, reliable and controllable”.
The parallel focus on upgrading traditional industries and fostering new ones points to a more coordinated approach to industrial policy, offering a practical path for China to improve its economic structure while maintaining overall stability, said Fu from Jiangsu Su Merchants Bank.
On the institutional front, the guidelines promote patient capital for early-stage technology ventures and support stock market listings by eligible technology companies. Researchers will also face fewer barriers to moving between universities, research institutes and businesses.
Greater openness is also a key part of the innovation push, as major economies step up investment in frontier technologies. The guidelines encourage foreign venture capital firms to expand in China and support the development of global innovation networks.
For Dekra, a German testing, inspection and certification company, China’s advances in AI, digital and green technologies are underpinning its continued expansion in the country, said Kilian Aviles, executive vice-president of the company and head of its Asia-Pacific operations.
Dekra has upgraded and expanded key laboratories in Shanghai, Suzhou in Jiangsu province, Guangzhou in Guangdong province and Hefei in Anhui province.
China’s technological advances are also enabling Dekra to “bring proven solutions developed in China to markets across the Asia-Pacific and beyond”, Aviles said. –The Daily Mail-China Daily news exchange item
