Tech innovation seen as key to growth

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By Fan Feifei, Ouyang Shijia and Liu Zhihua (China Daily) 10:05, July 25, 2024

China's sharpening focus on deepening reform for fostering new quality productive forces will give strong impetus to the country's economic growth, drive industrial upgrading and offer enormous business opportunities for investors both at home and abroad, said economists, experts and company executives.

Highlighting that sci-tech innovation is a key element in the development of new quality productive forces, they called for more efforts to achieve breakthroughs in crucial technologies by investing more in fundamental research and strategic forward-looking sectors, and step up financial support for innovation-oriented technology enterprises.

Their comments came after the third plenary session of the 20th Central Committee of the Communist Party of China placed great emphasis on improving the institutions and mechanisms for fostering new quality productive forces in line with local conditions.

The resolution adopted by the key high-level meeting called for efforts to improve the systems for promoting full integration between the real economy and the digital economy.

Qu Yongyi, Party secretary of the Chinese Academy of Social Sciences' Institute of Industrial Economics, said that as a new round of technological revolution and industrial transformation is profoundly evolving, bolstering the development of new quality productive forces is of vital significance in promoting high-quality economic growth, advancing new industrialization and realizing Chinese modernization.

"For traditional industries, the injection of new production factors such as data, and the innovative allocation of original factors of production can effectively promote the deep transformation and upgrading of industries," he said.

The country's latest call to nurture new quality productive forces through a series of institutional reforms is conducive to accelerating the building of a modern industrial system and boosting its core competitiveness globally amid external uncertainties, Qu added.

He said the cultivation of strategic emerging industries and future-oriented industries plays a pivotal role in propelling the development of new quality productive forces. These industries mainly include new-generation information technology, artificial intelligence, new energy, new materials, high-end equipment, biomedicine and quantum technology.

He added that more efforts should be made to increase input in core technologies in key fields and solve bottleneck issues that hinder development in areas such as raw materials, critical components, core equipment and basic software, in order to enhance the resilience of industrial and supply chains and gain competitive advantages in the increasingly intense international competition.

Huang Hanquan, head of the Academy of Macroeconomic Research, which is affiliated with the National Development and Reform Commission, stressed the need to accelerate the forming of relations of production that are more compatible with new quality productive forces, with greater focus on deepening reforms in fields such as technology and education to create a favorable environment that encourages innovation, and to attract more high-caliber talents.

Firms' role highlighted

Huang said that more efforts should be made to give full play to the role of enterprises in bolstering sci-tech innovation, expand international cooperation and exchanges in sci-tech, and support foreign enterprises in carrying out technological research and innovative practices in cooperation with Chinese research institutes and companies.

Denis Depoux, global managing director of market consultancy Roland Berger, said the country's emphasis on developing new quality productive forces is all about the transformation of its economy, while foreign companies can play a bigger role in supporting China's transformation in fields such as automation and digitalization of industrial and supply chains.

The move will attract more investment by foreign companies to support Chinese companies' transformation and bring more new technologies to the world's second-largest economy, he added.

Li Daokui, director of Tsinghua University's Academic Center for Chinese Economic Practice and Thinking, told China Daily in an exclusive interview that new quality productive forces refer to a new development model mainly driven by new technologies, which also brings new production relations and new institutional arrangements.

Li called for greater efforts to tackle the choking points that hinder the cultivation of new quality productive forces, saying that more measures are needed to innovate in the financial system to encourage investment in tech companies, encourage cooperation between tech firms and academia, and cultivate more talent with expertise in new quality productive forces.

Justin Yifu Lin, dean of Peking University's Institute of New Structural Economics, said that China needs to further deepen reforms in the financial system so that it can better meet financing demand from economic activities.