From Zhang Peng
The communique issued by the third plenary session of the 20th Central Committee of the Communist Party of China, which was held in July, highlighted the need to “deepen supply-side structural reform, improve incentive and constraint mechanisms for promoting high-quality development, and strive to create new growth drivers and strengths”.
The Chinese economy is transitioning from fast-paced, quantitative growth to high-quality development, with the focus now being on improving total factor productivity and promoting innovation-driven growth to meet the socioeconomic needs and advance Chinese modernization.
Following the 18th National Congress of the CPC in 2012, China made innovation the primary driving force of economic development. On the supply side, China has made some remarkable achievements. Thanks to new technological and industrial breakthroughs, China’s new industrialization policy has boosted traditional industries and given rise to new industries.
In the first half of this year, 39 out of the 41 major industrial sectors achieved growth, with the added value of high-tech manufacturing industries increasing by 8.7 percent year-on-year and investment in high-tech industries growing by 10.6 percent year-on-year.
New industries and new infrastructure have advanced the digitalization of industries, and are helping develop new quality productive forces such as 5G and artificial intelligence facilitating the upgrading and transformation of traditional industries while nurturing new industries.
On the demand side, new consumption is becoming mainstream, with the consumption pattern showing distinct signs of customization and diversity. Also, in the first half of this year, per capita disposable income increased to 20,733 yuan ($2,910), up 5.4 percent year-on-year, which is higher than the GDP growth rate. While traditional consumption of goods and services, including restaurants and takeouts, remain strong, consumption of new products and services, including tourism, digital, green and health-related products, has been boosting consumption growth. The development of social productive forces and the improvement in labor productivity determine an economy’s progress, and only continuous promotion of technological innovation, productive forces and labor productivity can lead to sustained and healthy socioeconomic development.
In fact, innovation has become the primary driving force of high-quality development in China. Innovation can also help meet Chinese people’s growing need for a better life, and address the unbalanced and inadequate economic development problem.
New quality productive forces are advanced productive forces, which help achieve technological breakthroughs and can innovatively configure production factors and promote industrial upgrading.
Despite the complex and volatile international situation, opportunities outweigh challenges for China. The fundamental advantage of China’s high-quality development, a huge market of over 1.4 billion consumers, has not changed. By adhering to people-centric principles, promoting innovation, upgrading industries and improving governance, the country can advance high-quality development and achieve Chinese modernization.
Although China’s population is rapidly aging, the country can achieve sustainable development by exploiting the second demographic dividend, that is, new sources of economic growth, and more robustly promoting innovation. For that, China needs to increase investment in the education sector, especially in basic education and vocational education, and raise the overall level of human resources. It should also make good use of the opportunities created by new technological and industrial revolutions to expedite economic structural adjustments, and promote cross-regional, cross-industrial and cross-occupational labor mobility.
Industrial transformation, too, can promote innovation. Since enterprise-driven innovation plays a key role in high-quality development, China should improve the mechanisms for developing new quality productive forces and leverage enterprises’ advantages to achieve economic growth. –The Daily Mail-China Daily news exchange item
