The emergence of new productive forces as catalysts for superior development
The term “new productive forces” has gained popularity in China after being brought up often by the country’s leaders and relevant agencies, such as local governments, in their plans for the country’s annual economic growth.
New productive forces are a new type of productive forces that are led by technological innovation and new components like data, as opposed to classic productive tools, which are driven by factors like labor, land, and money.
New productive forces could help focus on the ways and means of finding economic momentum at a time when China’s economy has been rattled by the failing real estate market, declining private investment, an aging population, and rising external geopolitical tensions, according to industry experts.
They stated that they think China’s focus on new productive forces may hasten the growth of important technologies and industries that are oriented toward the future, so fostering contemporary industrial development and assisting in the advancement of the second-largest economy in the world along the global value chain.
Xi Jinping, general secretary of the CPC Central Committee, chaired a study session of the Political Bureau of the Communist Party of China Central Committee. Xi emphasized that innovation and the rapid development of new productive forces should be encouraged as they are an intrinsic requirement and a key component of high-quality development.
Xi made the point that scientific and technology innovation is the foundation for creating new productive forces and that it may create new industries, models, and momentum.
In order for original and disruptive scientific and technological innovations to proliferate and create more momentum for the emergence of new productive forces, Xi stated that it is imperative to strengthen scientific and technological innovation, particularly original and disruptive innovations, accelerate efforts to build high-level self-reliance and strength in science and technology, and do a good job of making breakthroughs in core technologies in key fields.
“If China wants to follow the path of rapid development, the country must plan ahead on new productive forces to seize the opportunity,” stated Wei Jianguo, a former vice-minister of trade.
Wei, who is also the vice-chairman of the China Center for International Economic Exchanges, forecast that within the next five to ten years, new production forces will be crucial to the rivalry amongst the world’s economies.
“The top priority is to establish as soon as possible a unified and open technology factor market with orderly competition, complete systems and sound governance,” Wei stated.
Wei went on to say that the primary distinction between the new and traditional productive forces is that the latter do not require significant resource investments; rather, they emphasize the pivotal role that scientific and technological innovation plays, which primarily consists of strategically emerging and future-focused industries.
Former Chongqing mayor Huang Qifan held similar opinions. Developing productive services is China’s main economic modernization bottleneck, he stated in December at a symposium on new productive forces in Guangzhou, Guangdong province.
Productive services, which include cloud computing and financial and legal assistance, are industries and technology that are mostly intended to improve traditional manufacturing.
“If you have a large manufacturing sector but the proportion of productive services is low, you can only produce middle- to low-value manufacturing products,” Huang stated.
“Although we can produce the newest 5G network equipment, we are unable to utilize it. This is comparable to constructing a port without somebody to manage it or mending a road without any automobiles,” he remarked.
Both Wei and Huang’s comments outline the new productive forces and emphasize that creating future-focused industries is essential to their development.
The minister of industry and information technology, Jin Zhuanglong, emphasized the significance of coordinating technical innovation, large-scale development, and application scenarios in addition to creating new productive forces during a recent interview.
The speaker stated that China’s new goals for future-oriented sectors include artificial intelligence, humanoid robots, the metaverse, next-generation internet, 6G, quantum information, and deep sea, deep air, and deep space.
China’s industrial future plan is starting to show this year. According to Luo Zhiheng, head economist of Yuekai Securities in Guangzhou, “fields like brain-like intelligence, quantum information, and genetic technology will likely gain greater support.”
“Future industries may enter a new phase as detailed policies or action plans are expected from various ministries and commissions concerned,” said Luo.
Up to the end of January, local government work reports from every province-level area revealed their growth plans for 2024. This year, in addition to their typical economic objectives, they have made the creation of new productive forces a shared priority.
For example, the South Chinese province of Guangdong said that it will step up efforts to develop new labor forces in the integrated circuit, new energy storage, and commercial spaceflight industries. It also intends to support emerging sectors such as humanoid robotics and 6G technologies.
Anhui province in East China, which is recognized as a center for emerging technologies, said this year that in addition to emphasizing the growth of emerging industries like new energy, it will push new industrialization and create a globally competitive advanced manufacturing cluster.