This year’s Boao Forum for Asia (BFA) Annual Conference officially concluded on March 29, after four days of heated discussions among representatives from across the globe on Asia’s development strategies for 2024 and beyond.
Amid a wide spectrum of trending topics, a novel concept stood out in this year’s agenda: new quality productive forces.
But the concept was not just a buzzword that randomly made its way into almost every BFA panel.
Over the past few months, it has become a key phrase in China’s economic lexicon that has set out to permeate every aspect of everyday life and reshape the country’s economic landscape in profound ways.
Switching gears
In the context of China’s economic development, new quality productive forces refer to innovation-led, advanced productivity that is freed from traditional economic growth models and productivity development paths, features hi-tech, high efficiency and high quality, and aligns with the country’s new development philosophy that underscores innovative, coordinated, green, open and inclusive development for all.
These forces encompass the adoption of advanced technologies such as artificial intelligence (AI), big data, cloud computing, and the Internet of Things to enhance productivity, efficiency, and competitiveness across various industries.
The concept was first proposed by President Xi Jinping during his September 2023 visit to Heilongjiang, China’s northeasternmost province, where he stressed the need for a new development model powered by innovation in hi-tech sectors.
In March, the phrase was highlighted in this year’s government work report, approved at the annual national legislative session, which promises that China will strive to modernize its industrial system by harnessing new drivers of growth.
“China has long been a global powerhouse for traditional labor-intensive manufacturing. However, we are losing hold of this advantage,” Justin Yifu Lin, Dean of Peking University’s Institute of New Structural Economics, said during a BFA discussion panel.
Stressing that China no longer retains its traditional competitive strength, Lin also noted a trend in which investment is moving from the country’s low-end manufacturing sector to high-value-added industries.
The shift up the value chain is most clearly demonstrated by the evolution from China’s traditional export pillars of clothing, furniture and home appliances, also referred to as the “old three,” to the “new three” categories: electric vehicles, solar cells and lithium-ion batteries.
These emerging industries have replaced the old standbys, marking a significant transition.
According to an annual report on Asia’s economic outlook released by the BFA on March 26, exports of the “new three” generated an impressive 1.06 trillion yuan ($149 billion) in 2023, surpassing the 1-trillion-yuan ($147 billion) mark for the first time.
“As long as we keep up industrial upgrade and muster domestic and foreign investment to drive new quality productive forces, China can still maintain stable economic growth amid great global uncertainties,” Lin said.
Digital 2.0
The theme “digital intelligence” was a prominent feature during this year’s BFA discussions about new quality productive forces, with several panels focusing specifically on the rise of AI and the many opportunities and risks it entails.
“For centuries, we relied on an economy that centers around land and other limited natural resources. For this reason, the previous three industrial revolutions (the transition to steam power, electricity and information technology, respectively) were all focused on a more efficient use of these resources,” Yuan Hui, founder and CEO of Xiao-i, a Chinese cognitive intelligence company known for launching the world’s first chatbot in 2004, said at the forum.
In his view, digital intelligence offers an opportunity to break away from the limitations of natural resources. “We have entered the age of the digital economy, which is built upon data. Data is not only unlimited but also increases over time,” he added.
“There are so many interesting examples of how digital technologies are adapted to everyday life in China, from personalized recommendations powering the world’s largest e-commerce market to streamlined logistics and robots serving food in restaurants,” Kyoung Mu Lee, a professor of computer engineering at Seoul National University in the Republic of Korea, told Beijing Review.
“China is more advanced in terms of AI application, while the U.S. focuses more on fundamental algorithms,” he noted, stressing that there is no “better or worse” in how a country approaches AI.
“Each country has its own unique strength when it comes to digital growth, and no country or company can monopolize access to AI technologies. All countries should be open to data science cooperation and direct AI toward benefiting the greater good,” Yuan told Beijing Review.
Breaking boundaries
As China undergoes a digital revolution reshaping daily life, work and interactions, emerging strategic sectors like quantum computing, renewable energy, and deep space exploration are key frontiers for deploying advanced productive forces.
“The rapid development of AI technologies can not only accelerate the development of quantum computing, but also contribute to the search for nuclear fusion energy by unlocking new materials and new testing conditions,” Lee said. “The synergy of these three sectors will drive us toward an innovation tipping point that promises explosive growth.”
The emphasis on new quality productive forces will also help China fine-tune its use of other types of renewable energy.
Despite China’s global lead in clean energy production, there is still a lot of work to be done, multiple speakers at the forum said, citing the need to use green technologies to increase the conversion rate of solar energy, generate new energy storage solutions and predict when the sun will shine and the wind will blow.
“Plus, as technologies continue to evolve, it has also allowed us to voyage deeper into space and push the boundaries of human reach,” Zhang Keke, Director of the Macao Institute of Space Technology and Application, said at the forum.
In 2020, China launched Tianwen-1, the country’s first independent interplanetary mission to Mars, consisting of an orbiter, a lander and a rover.
According to Zhang, Mars used to have liquid water and an atmosphere, but has evolved at a faster pace.
“With the help of frontier technologies, we may one day recreate the magnetic field of Mars and transform it into a habitable planet for humans,” he said.
As scientific breakthroughs allow China to venture into unknown territories, the incorporation of new quality productive forces into its economy also presents a possible solution for addressing societal concerns.
According to Aho Esko, former Prime Minister of Finland, an aging population is one of the most fundamental challenges facing China—and the world. “I’m optimistic that new technological tools can assist in increasing productivity and generating new solutions to this issue,” he said at the forum.
Looking ahead, the ability to master these new tools will be the key for every individual and every enterprise to win the race toward a sustainable, tech-savvy future, Yuan concluded. –The Daily Mail-Beijing Review news exchange item
