The latest CPC Central Committee plenum laid out measures to foster new and quality productive forces in pursuit of high-quality development.
High-quality development is China’s primary task in building a modern socialist country in all respects. For this purpose, at its third plenary session in July this year, the 20th Central Committee of the Communist Party of China (CPC) declared its resolve to “improve the institutions and mechanisms for fostering new quality productive forces in line with local conditions… Relevant rules and policies will be improved to accelerate the formation of relations of production that are more compatible with new quality productive forces, and to channel various types of advanced production factors toward the development of new quality productive forces. These steps will help realize a significant increase in total factor productivity.”
This decision reflects the CPC leadership’s acute understanding of the mechanisms and systems underpinning the development of Chinese socialism. High-quality development cannot be achieved without deepened reforms, which will remove institutional obstacles to the development of new quality productive forces, create new growth drivers, and harness strengths.
Productive forces in this context refer to the ability of human beings to transform nature to their benefit in the production process. They consist of three key elements: labor, subjects of labor, and means of labor, which form an organic system based on interactions within and between them. Of the three elements, laborers are the main body of productive forces. The means of labor are an important benchmark of the development of productive forces, and subjects of labor are what labor is applied to. Productive forces advance in tandem with the progress of science and technology. When new technologies emerge, workers' abilities improve, means of labor get upgraded, and subjects of labor undergo changes, all of which lead to revolution in the optimization and integration of the three. As a result, productive forces are raised to a higher level. Productive forces provide the material foundation for human society and are the key factor and decisive force that drives human history forward.
Relations of production are economic relations formed in the production process. They determine the way in which the means of production are possessed, used, and distributed, and hence have an important bearing on the development of productive forces. Productive forces determine relations of production, and vice versa. The development of productive forces demands changes in relations of production that will make the latter better adapt to the former. Without timely adjustments in relations of production, the development of productive forces will consequently be held back. Therefore, relations of production must be modified and transformed as required by changes in productive forces to facilitate their growth. This is why reform is needed.
The fundamental task of Chinese socialism is to tap and develop productive forces. The reason why China's economic development can keep making historic strides is that the CPC has continuously deepened its understanding of the laws underpinning the development of productive forces, and on this basis guided them to reach new heights. As China strives to further deepen reform comprehensively, it aims to rectify the relations of production that are not keeping pace with the expansion of productive forces, further harness and develop productive forces, and promote all-round economic and social progress, thereby achieving high-quality development.
Workers examine a turbine at the factory of wind turbine maker Goldwind in Yancheng, Jiangsu Province.
Fostering new quality productive forces is the requirement and focus of China’s pursuit of high-quality development. New quality productive forces are characterized by a substantial increase in total factor productivity, innovation, and quality. They are in essence advanced productive forces.
Through scientific and technological innovation and breakthroughs, new quality productive forces can promote the transformation and upgrading of economic structure and improve production efficiency. After being translated into industrial innovation, they can turbocharge the rise of emerging industries and the transformation of traditional industries, enhancing economic competitiveness and sustainable development. New quality productive forces facilitate green development, which is conducive to coordinated development of the economy and the environment. In short, in fostering new quality productive forces, China aims to optimize resource allocation, stimulate the creativity of market entities, advance high-quality development, and consequently achieve steady economic growth and all-round social progress.
To foster new productivity, what is needed first is to strive for innovations and breakthroughs in science and technology. Innovations are the key to improving productivity, and revolutionary technological breakthroughs are an important means of creating new quality productive forces. The development of such productive forces in science and technology and broad application of new technologies, procedures, and materials can significantly improve productivity, promote the transformation of an economic growth model, and allow China to achieve high-quality development.
Second, sci-tech innovation must be efficiently translated into industrial execution. The application of research output to real productivity will lead to both the rise of emerging industries and the deep transformation and upgrading of traditional industries. Sci-tech innovation is the source of new quality productive forces, but it has to be translated into real productivity through industrial innovation. In other words, on the basis of sci-tech innovation, a country can improve and upgrade its industrial structure, build up emerging industries, transform traditional industries, improve production efficiency, and finally foster newer and more advanced productive forces.
Third, accelerating green development is also important. New quality productive forces are green productive forces. In accelerating green development, the aim is to strike a balance between economic development, resource utilization, and the environment. Under the philosophy of green development, China encourages the application of green technologies and the development of green industries, strives for more efficient use of resources and better environmental protection, and pursues sustainable economic development.
At its third plenary session, the 20th CPC Central Committee stressed the need to accelerate the formation of relations of production that are more compatible with new quality productive forces, and declared to further deepen reform comprehensively. The fundamental purpose of such reform is to calibrate the relations of production incompatible with new quality productive forces, thereby unleashing the full potential of these productive forces. Institutional design and policy arrangements should be refined to continuously stimulate the creativity of market entities, build up growth momentum, and promote deep integration of sci-tech innovation and industrial innovation. This will improve productivity and boost high-quality development.
A visitor checks out a Mate XT foldable mobile phone at a Huawei store in Yantai, Shandong Province, on September 10, 2024.
In this regard, the focus lies on three main issues.
First, the provision of better institutional arrangements to mobilize advanced production factors. Concentrating advanced production factors on new quality productive forces is important for improving total factor productivity. By comprehensively advancing reform of the systems and mechanisms concerning educational, scientific, and technological personnel, the training, management, and flow of these professionals will be improved, cultivating a highly competent and innovative workforce for the development of new quality productive forces. There should also be continuous streamlining of government administration, delegation of power, improved government services, and reduced costs to create a better business environment and stimulate the creativity of enterprises. In particular, protection of intellectual property rights should be further enhanced to ensure fair competition.
Second, creating an enabling innovation environment for the formation of new quality productive forces. Through policy guidance and by leveraging market mechanisms, the concentration and circulation of innovation resources will be promoted to prompt the formation of a robust innovation ecosystem. In particular, it is necessary to strengthen collaboration between the government, enterprises, research institutes, and the private sector to create a good environment for innovation, ensure synergy for innovation, and jointly promote the development of new quality productive forces.
Third, providing strong financial support for the development of the real economy. The financial market plays an important role in supporting the development of new quality productive forces. To that end, angel investments, venture capital, and private equity investment should be encouraged and regulated. In addition, government investment funds should play a better role, and patient capital be encouraged so as to provide long-term, stable financial support for innovative enterprises and emerging industries. Reform of the financial system should be deepened. Financial innovation should be carried out in a steady manner, along with the optimization of financial resource allocation, and the improvement of financial services for the real economy. It should be ensured that government investment funds effectively play their important role in steering capital toward new quality productive forces. Special funds can be established to support scientific and technological innovation, industrial upgrading, and green development, guiding private capital to flow to new quality productive forces.
YIN ZHICHAO is vice president of the Capital University of Economics and Business and a researcher with the Beijing Research Center for Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.
