Huang Wenyi and Hu Leming: The "Changes Unseen in a Century" from the Perspective of Long Economic Waves
In June 2018, Xi Jinping noted at the Central Conference on Work Relating to Foreign Affairs: "At present, China is in its best period of development since modern times, while the world is undergoing profound changes unseen in a century. These two trends are synchronized, intertwined, and mutually reinforcing." [1] The notion that "the Party Central Committee coordinates the overall strategy for the great rejuvenation of the Chinese nation and the profound changes unseen in a century" [2] has become the epochal background for advancing the cause of Chinese-path modernization. How should we understand this important thesis? Academic research has primarily focused on the starting and ending points of these "profound changes," their primary characteristics, and their impact on China. There is a general consensus that further research is needed on the theoretical connotations and practical relevance of these "profound changes unseen in a century."
We believe this thesis represents a fundamental understanding of the current state of global economic development. In December 2016, Xi Jinping noted in his speech at the Central Economic Work Conference: "In studying the economic situation, we must look both backward and forward, 'knowing the future by reviewing the past and discerning the hidden by observing the manifest' [1], and understand things from the starting point of long-term cycles of economic development and the broad context of global politics and economics." [5] The theory of long waves in the economy is a relatively effective analytical tool for "knowing the future by reviewing the past and discerning the hidden by observing the manifest." It can provide a new perspective for a scientific understanding of the "profound changes unseen in a century," allowing us to accurately judge and grasp the current developmental trends of the global economy and the specific paradigms of human socio-economic development. This is of significant benefit for China to better respond to these profound changes.
I. The Evolutionary Process and Current State of the Global Economy from the Perspective of Long Waves
Long waves in the economy refer to periodic economic fluctuations with a duration of approximately 50 years, consisting of an expansionary and a contractionary phase. Academic research on this began as early as 1847 with the British scholar Hyde Clarke. Systematic study commenced at the turn of the 20th century. In the 1920s, the Soviet scholar Nikolai D. Kondratieff conducted empirical research on the long cycles of the capitalist economy, proposing what Joseph A. Schumpeter later named "Kondratieff waves." Academic research on long waves often exhibits "counter-cyclical" [2] characteristics relative to economic performance. Over the past half-century, Neo-Schumpeterian and Marxist scholars have advanced the development of long-wave theory by innovating research methodologies. [6]
Summarizing previous research, we believe that starting from the fundamental movement of the productive forces and the relations of production, constructing an analytical framework that emphasizes the fundamental role of productive forces while integrating technological revolution and institutional change is a viable approach to studying long waves. By tracing the development of long waves as they have unfolded through the industrial revolutions, we can understand the evolutionary process and current position of the global economy's century-long changes.
1. The evolutionary process of the global economy from a long-wave perspective
Human society has so far experienced three consecutive industrial revolutions: the first industrial revolution (from the 1760s to 1870), the second industrial revolution (from 1870 to the 1970s), and the third industrial revolution (beginning in the 1970s). Each industrial revolution lasts roughly a century and unfolds through two Kondratieff long waves, following a "W-shaped" trend.
Periodicity is a basic characteristic of long waves. Each industrial revolution roughly passes through four stages: installation, deployment, synergy, and maturity. [6] The basic paradigm for the unfolding of each industrial revolution is as follows: it originates during a long-wave depression when the achievements of the previous industrial revolution have been exhausted. This is a transitional period where old and new techno-economic paradigms alternate, belonging to the installation phase of the industrial revolution. It is characterized by slow growth in total output and a stage of intense structural adjustment in society. As emerging technologies diffuse and leading industries grow, a deployment phase follows, characterized by the rapid development of new industries driven by capital, leading the economy into an expansionary long wave. However, if other industries, technologies, and organizational institutions fail to follow suit effectively, structural imbalances occur, forcing the industrial revolution from an expansionary into a contractionary long wave. At this point, the industrial revolution enters the synergy phase, characterized by structural reshaping. During this period, the economic-technological and socio-institutional spheres continuously couple, eventually allowing social production to achieve structural balance once again. With the establishment of a new balanced structure, the industrial revolution enters its maturity phase—a golden age where the economy grows in a suitable manner and enters an expansionary long wave. Simultaneously, however, this is also a process where the developmental momentum of that revolution’s "techno-economic paradigm" is fully released and eventually moves toward exhaustion in the next stage, harboring the "embryo" of the next industrial revolution. The first industrial revolution began during the proto-industrialization stage. The second industrial revolution was triggered by the massive demand for "energy-power-transportation" across the entire industry created by the first, as well as an unprecedented demand for large-scale production of heavy industrial products and materials.
Based on the above paradigm, we can trace the development of the three industrial revolutions. In the 1760s, the British textile worker James Hargreaves invented the Spinning Jenny, triggering a chain reaction of invention and innovation (e.g., the subsequent water frame, the spinning mule, and the power loom). These innovations launched the installation phase of the first industrial revolution, and the world economy entered the downward wave of the first Kondratieff cycle. In 1776, James Watt built the first steam engine of practical value; its application to the textile industry after improvements in 1785 propelled the great development of cotton textiles, [8] driving the first industrial revolution into its deployment phase and forming the expansionary wave of the first Kondratieff cycle. After 1790, excessive expansion in cotton textiles led to overproduction and triggered an economic crisis. Around 1825, the first industrial revolution was forced into the synergy phase, while the world economy entered the downward wave of the second Kondratieff cycle. During this period, new technologies originally used in cotton textiles began transferring to other industries, driving adjustments in institutional arrangements and production organization, and social production began to couple. By roughly the 1850s, the first industrial revolution entered its maturity stage, and the economy grew rapidly, ushering in the upward wave of the second Kondratieff cycle.
After 1870, the growth momentum of the first industrial revolution significantly waned, and the installation phase of the second industrial revolution began. The techno-economic paradigm of the first industrial revolution still held some sway while the new paradigm was rising; the confrontation between the two led to a "depressive depression" [3] in the world economy, which entered the downward wave of the third Kondratieff cycle. With continuous innovation and diffusion of steel-making, internal combustion engines, and electrical power, the electrification of factories gave birth to large corporations and Taylorism in corporate management. The rapid expansion of emerging sectors like steel, electricity, oil, and automobiles pushed the second industrial revolution into its deployment phase around 1893, and the world economy entered the expansionary wave of the third Kondratieff cycle. However, the structural imbalances caused by the rapid development of emerging industries became increasingly severe. The economic crisis of 1913 brought the second industrial revolution into its synergy phase. This was an era filled with war and turmoil, and the world economy entered the downward wave of the fourth Kondratieff cycle. During this period, the needs of war objectively promoted technological changes and organizational adjustments across various industrial fields; Fordist assembly line production gradually became dominant. After World War II, the second industrial revolution quickly entered its maturity phase, initiating the expansionary upward period of the fourth Kondratieff cycle—the "Golden Age" of the world economy, especially for Western countries.
2. The historical position of the current global "profound changes in a century" within long waves
Human society is currently still in the stage of the third industrial revolution, which originated from the "stagflation" crisis of the Western capitalist world in the 1970s. The arrival of "stagflation" marked the end of the second industrial revolution and the entry into the installation phase of the third, corresponding to the downward wave of the fifth Kondratieff cycle. Emerging technologies represented by electronic chips, computers, and the internet expanded rapidly driven by financial capital, pushing the third industrial revolution into its deployment phase in the early 1990s and forming the upward wave of the fifth Kondratieff cycle. This wave of capital carnival came to an abrupt halt with the 2008 international financial crisis. Consequently, the third industrial revolution entered its synergy phase and the downward wave of the sixth Kondratieff cycle—a period of profound structural adjustment that human society has not yet exited. It is estimated that the synergy phase of the third industrial revolution and the downward wave of the sixth Kondratieff cycle will end around 2030, transitioning into the maturity phase of the third industrial revolution and the upward wave of the sixth Kondratieff cycle.
The synergy phase of an industrial revolution is a "turbulent period" of structural reshaping. During this period, leading and secondary technology clusters, along with corresponding institutional arrangements and organizational systems, develop deeply and fuse together, constantly reshaping the "balanced structure" of social production. [9] Each industrial revolution contains two Kondratieff waves corresponding to two rounds of technological revolution, representing different developmental paradigms: technologically, they correspond to different waves of revolution; industrially, to different industrial systems; institutionally, to different regimes of accumulation and management models; and spatially, to shifts in the global economic center and landscape. Entering the 21st century, "clusters of innovation" [4] have begun to emerge. New energy power technologies; connection technologies such as 5G, the Internet of Things (IoT), and blockchain; manufacturing technologies like 3D printing, intelligent manufacturing, and new materials; and corresponding flattened, decentralized, networked, and platform-based production organizations are tending toward deep integration and wide diffusion. Various fields of social production are continuously adjusting toward coupling, preparing for the next expansionary phase. The "century" in the so-called "profound changes in a century" is more of a general reference to time; it refers to the massive historical changes "currently occurring" or "about to occur" in the balance of power between Eastern and Western civilizations, as determined by the economic base, across the long historical process of several such century-long shifts.
II. Developmental Trends of the Current Global "Techno-Economic Paradigm"
Currently, the third industrial revolution is in its "second half." The leading technology groups composed of connection, energy, and manufacturing technologies will develop and integrate deeply, driving profound adjustments in production methods, management models, industrial systems, and the international economic landscape, ushering in the expansionary long wave of the maturity phase of the third industrial revolution. Carlota Perez argues that every technological revolution inevitably triggers a shift in the "techno-economic paradigm," which she defines as a "best-practice model" representing the most effective way a specific technological revolution can be applied. [11] The essence of an industrial revolution is the replacement of the old techno-economic paradigm with the new—a fundamental change in the original developmental paradigm of the socio-economic system. [12] Therefore, examining the developmental trends of the techno-economic paradigm in the current historical stage—as well as the upcoming maturity phase of the third industrial revolution and the upward wave of the sixth Kondratieff cycle—helps us grasp the developmental paradigms of the current global "profound changes in a century." This includes three aspects: the energy and technology paradigm, the institutional and organizational paradigm, and the resulting global economic geography and industrial division of labor.
1. Developmental trends of the energy and technology paradigm
Connecting technologies, energy technologies, and manufacturing technologies together constitute the key technologies of the industrial revolution. Connecting technologies include transportation and information-communication technologies; they are an easily overlooked but vital force in driving the processes of successive industrial revolutions and promoting the progress of human society. The Third Industrial Revolution is, first and foremost, a revolution in connecting technologies with information technology at its core. The progress of information-communication technology, represented by the Internet, has brought about significant changes in the productive forces, living conditions, and social order of the entire society. Currently, the ability of technology to transform connectivity continues to strengthen. With the continuous advancement of technologies such as cloud computing, big data, and 5G communications, Artificial Intelligence (AI), blockchain, and the Internet of Things (IoT) are driving disruptive changes in the way human society connects. In the future, people, organizations, terminals, and devices will be connected in various ways—from simple to complex, from unidirectional to bidirectional, and from fixed to mobile—and connecting technologies will create massive internet economies.
The Third Industrial Revolution is characterized by the replacement of centrally extracted and converted fossil energy (such as coal and petroleum) with distributively collected and converted renewable energy (such as wind and solar power). This renewable energy is converted into electricity on-site and transmitted to users through intelligent regional power grids. This transformation in the mode of energy production and conversion drives changes in energy transmission, distribution, and utilization, giving rise to "flat" intelligent energy networks. This revolution in energy production and utilization will allow humanity to build a harmonious partnership with nature. Humans will no longer arbitrarily seize resources from or discharge waste into nature, nor will they disrupt the rhythms of the earth's biosphere cycles. Instead, they will return to their rightful place within the biosphere’s ecosystem. Economic and social development will organically integrate with the natural biosphere, facilitating human society's entry into the era of ecological civilization.
Regarding manufacturing technology, many scholars firmly believe that the focus of the new round of technological and industrial revolution is the construction of "smart factories." This involves utilizing AI-based Cyber-Physical Systems (CPS) to achieve intelligent and digital manufacturing, empowering real-world factories with data from the informational world, realizing an all-encompassing seamless connection across manufacturing value chains, and achieving more efficient, rapid, and ideal modes of production. Currently, through the efforts of various nations, human society is stepping into an "AI society." For instance, through digitalized intelligent production, Germany’s Volkswagen has reduced the energy consumption of manufacturing a single engine by 67% and pollutant emissions by 70%. In the future, as AI technology continues to proliferate and integrate into the production systems and industrial chains of the whole society, human society will truly enter the "Intelligent Society": smart factories, smart production, smart logistics, smart buildings, smart grids, smart governance, and smart consumption. This will thoroughly transform people's modes of production and lifestyles; humanity will liberate not only its hands, but its brain.
2. Trends in the Transformation of Institutions and Organizational Modes
The world today "is in an era where challenges emerge one after another and risks increase by the day." [19] The aftershocks of the 2008 financial crisis persist, and coupled with the global COVID-19 pandemic that erupted in 2020, world economic growth—particularly in Western developed countries—is sluggish. Western countries, led by the United States, pursue unilateralism and trade protectionism, while international cooperation faces dilemmas. Simultaneously, more and more people are beginning to question the capitalist system. [20] Capitalist institutions were once synonymous with the "perfect system," and Francis Fukuyama even proposed the "End of History." However, starting with the global financial crisis triggered by the U.S. subprime mortgage crisis in 2008, the deep contradictions of the Western capitalist system have erupted once again. The sudden COVID-19 pandemic in 2020 further exposed the contradictions of the capitalist system in their entirety. In 2017, Richard D. Wolff published an article on the "Truthout" website discussing "New 21st Century Socialism," suggesting that "rather than being a competitor, China is an object for the whole world to learn from." [21] "New 21st Century Socialism" emphasizes a planned market economy and highlights the role of "worker cooperatives" as an organizational institution. Its internal requirements for the mode of production organization are socialization, networking, digitalization, and flattening.
In specific fields of production, the organizational mode of production is closely linked to the technological paradigm; together, they constitute the society’s mode of production. Energy and technological transformations have global impacts: they can drive the emergence of new industries, promote the upgrading of old ones, and—more importantly—transform the organizational mode of production, give rise to new business models, and change the way people work. The new round of technological and industrial revolution is shifting toward a foundation of renewable energy. The distributed nature of renewable energy requires cooperative organizational structures rather than hierarchical ones. This is an organizational mode of production that leans toward socialization, networking, platformization, flattening, and micro-scaling; it is also a mode capable of responding more quickly to consumer demands. Distinct from the traditional industrialization process where consumers were at the passive end of consumption, under the support of new technologies, consumers participate directly in the innovation process of products and services, becoming important subjects of innovation.
In this new round of technological and industrial revolution, only those enterprises capable of responding rapidly to personalized consumer demands will achieve stronger viability. New business models such as "customized production" and "after-market services" [5] are increasingly becoming the mainstream production paradigm, which requires corporate organizational structures to undergo further flattening. Through IoT technology, millions of producers and consumers will form a distributed network in the future, replacing all "middlemen" from wholesalers to retailers. This not only saves transaction costs and improves the efficiency of corporate resource utilization but also allows producers to quickly perceive consumer needs and respond rapidly. "The antagonistic relationship between sellers and buyers is replaced by a cooperative relationship between suppliers and users."
3. Developmental Trends in the Global Economic Landscape
History has proven many times that every technological and industrial revolution exerts a major impact on the world economic and political landscape. Human society has now entered a period of innovation clustering, which has an incalculable influence on the adjustment of the international economic structure and will inevitably reshape the global economic landscape as well as the political landscape. Some scholars argue that the core of the "Great Changes Unseen in a Century" [6] lies in the balance of power among nations and its subsequent shifts. This is primarily manifested through historically significant changes in fields such as the global strategic landscape, the global economic landscape, the international order, the global governance system, and the modes of human civilization and interaction.
The current world economic landscape is characterized by the global expansion of the capitalist system and the traditional advantages held by Western countries. Developed countries occupy the higher tiers of the international division of labor and hold the power of discourse in global governance. However, since entering the 21st century, and especially following the 2008 international financial crisis, emerging market countries represented by China have achieved a collective rise, and the balance of international power has undergone an unprecedentedly large shift. [25] Specifically, this is manifested in the following aspects: First, in terms of total economic volume, the gap between emerging markets/developing countries and developed countries continues to narrow; the trend of "the Rise of the East and the Decline of the West" [7] in the world economic map is obvious. [26] According to International Monetary Fund (IMF) statistics, the share of emerging markets and developing economies in the global total has already exceeded that of developed economies, contributing 80% to world economic growth. This will make the world economic map more balanced. "This is the most revolutionary, historic, and even irreversible change in the balance of international forces in modern times." [27]
Second, in global economic governance, emerging markets and developing countries are playing an increasingly important role, and their institutional power of discourse has significantly enhanced. Historic breakthroughs have been achieved both in the proportion of global trade held by developing countries and in the number of seats they occupy among the Fortune Global 500 multinational corporations. Third, the gap in economic strength between China and the U.S. is continuously narrowing at a speed rarely seen in the history of world economic development. [28] From the perspective of Purchasing Power Parity (PPP), OECD data shows that China’s real GDP surpassed that of the U.S. as early as 2014. In 2022, China’s real GDP was $30.3 trillion while the U.S. was $25.5 trillion; China’s was 1.188 times that of the U.S. Fourth, in high-tech fields, the gap between China and the U.S. has narrowed significantly, and China has already surpassed the U.S. in certain areas. Against the backdrop of the new round of technological revolution, it is inevitable that great powers will engage in fierce competition in high-tech fields. The U.S. government has not hesitated to use state means to implement suppression against Chinese high-tech enterprises such as Huawei, strengthening export controls and investment restrictions against China in high-tech sectors, and obstructing China's advancement of Made in China 2025 in every way possible. This has become a microcosm of the all-around competition between China and the United States.
Some scholars have vividly summarized the aforementioned changes in the global economic landscape as "the Rise of the East and the Decline of the West" (东升西降), "Division in the North and Unity in the South" (北分南合), and "Earth-shaking Transformation" (地覆天翻), [29] articulating the major shifts in the world economic landscape unseen in a century. The so-called "Rise of the East and the Decline of the West" refers to the continuous strengthening of Eastern countries, represented by China, in terms of overall strength, while Western countries, represented by the U.S., undergo relative decline, leading to a more balanced East-West power dynamic. The so-called "Division in the North and Unity in the South" refers to the increasing "inward-looking" tendency among Western developed countries, where trade protectionism and unilateralism prevail and contradictions among developed nations abound; conversely, emerging economies and developing countries, under China's leadership, are moving toward greater unity and increasingly becoming a vital force in reshaping the international economic and political landscape. The so-called "Earth-shaking Transformation" refers to the fact that the current international order, especially the global economic governance system, is in a transitional period of "abolishing the old and establishing the new" (革故鼎新) [8], and this is proceeding through peaceful reform.
III. China Under the Great Changes Unseen in a Century: Opportunities, Challenges, and Solutions
The 2021 Central Economic Work Conference pointed out that "under the impact of the pandemic of the century, the Great Changes Unseen in a Century are accelerating, and the external environment is becoming more complex, severe, and uncertain." [30] The ongoing new round of technological and industrial revolution is a profound transformation of the techno-economic paradigm embedded in energy, technology, management, and institutional systems; it provides an opportunity for the turnover of economic leadership among nations. [16]39 Whoever can reshape the institutional structure for the economic-technological transformations of the new round of revolution to meet its needs, and provide more effective structural support for key technologies, will be able to seize the initiative for development and lead global economic progress.
1. Opportunities and Challenges for China Under the Great Changes Unseen in a Century
First, at the technological level: The technological essence of the Third Industrial Revolution is a new-generation high-tech cluster centered on the application of information technology, comprising connecting technology, energy technology, and manufacturing technology and their mutual penetration. This is a rich, multi-layered system of continuous technological innovation. Unlike previous technological revolutions dominated or even monopolized by a few developed countries, the characteristic trend of the new round is multi-point breakthroughs and collective advancement; no single country can fulfill all the requirements of technological innovation alone. This provides an excellent opportunity for China to "catch up and surpass" in the technological field, but simultaneously brings new challenges: established developed countries will certainly seize the "eastern wind" [9] of this new technological revolution to revitalize their manufacturing sectors and accelerate the pace of technological innovation. The struggle for the commanding heights of science and technology will enter a fever pitch. The U.S. began proposing its "Industrial Internet" strategy in 2012; Germany released its "Industry 4.0" strategic plan in 2013. Additionally, Japan's "Industrial Intelligence" strategy and the "high-efficiency production and high value-added" model promoted by the EU both have the core goal of seizing the technological commanding heights through the development of smart factories. [18]37 The Industrial Internet Consortium (IIC) is even regarded as an organization promoting industrial standardization, aimed at establishing industry standards for IoT-based smart factories and smart services. [17]115
This will, to a certain extent, weaken China’s traditional comparative advantages and favor the formation of new competitive advantages for Western developed countries. In particular, China’s weaknesses in high-end production processes and the establishment of industry standards will be amplified. The fact that Western countries are seizing the technological high ground has also led to an absolute deterioration of China’s external environment for innovation cooperation. Western countries use various means to restrict and suppress Chinese technological innovation, sparing no effort to deploy the power of the state apparatus against individual Chinese enterprises. Coupled with the fact that China’s original innovation capacity remains insufficient, Chinese enterprises often focus on breakthroughs in individual technologies while neglecting the improvement of entire production processes and the establishment of technical standards. This weakness—a lack of "standardization thinking"—will place China at a disadvantage in this new technological revolution.
Secondly, at the level of institutions and national governance: the new round of technological and industrial revolution places more stringent demands on institutional innovation. Although it is possible for technological and industrial revolutions to occur in countries and regions with good "institutional soil," such as the United States, China, and Europe [36], the world is currently in the synergy phase of the Third Industrial Revolution, where transformations in the realm of social systems have lagged behind. Any country wishing to achieve success in the new technological revolution must adjust its existing institutional framework and continuously improve its capacity for government governance.
For China, on the one hand, the system of socialism with Chinese characteristics is an autonomous choice made by the Chinese people based on a high degree of institutional identification; China already possesses the "institutional soil" required for the new technological revolution. Currently, our country is perfecting and developing the system of socialism with Chinese characteristics, promoting the modernization of the national governance system and governance capacity, and striving to better transform institutional advantages into national governance efficacy, thereby promoting a coupling between the institutional framework and technological change. Looking across the globe, China is one of the few countries that has made sound institutional preparations for the new technological revolution. On the other hand, the new technological revolution brings fundamental changes to business models, modes of production organization, and the demand for talent, which will give rise to new structural contradictions: first, the developmental structural contradiction caused by the weakening of traditional comparative advantages before new ones have formed; second, structural unemployment caused by the difficulty of matching the existing labor supply with the demand for new technological talent; and third, the structural imbalance in capital supply and demand caused by social capital being concentrated in traditional industries while the capital required for new technology industries is insufficient. This will undoubtedly make society more fragile and social governance more difficult; the flexibility of institutional innovation and the adaptability of social governance will both encounter challenges.
Finally, at the level of international cooperation: the cooperative nature of the new round of technological and industrial revolution in the technical field, along with the trend toward flattened modes of production organization, dictates that cooperation is the inevitable choice for the advancement of human society. Jeremy Rifkin refers to this as the "Collaborative Age" [28]. From the perspective of the subjects of cooperation, this includes not only cooperation between states but also cooperation between different regions and departments within a country. From the perspective of the objects of cooperation, this includes both technological convergence (the cross-fusion of physical, digital, and biological technologies) and industrial convergence. Industrial boundaries are becoming increasingly blurred as traditional manufacturing and service industries move toward deep integration. At the same time, it includes the fusion of science, technology, and industry, as high and new technologies are continuously transformed into social productive forces and permeate every aspect of society.
The history of industrial revolutions shows that the great transformation of the global economic landscape currently being experienced by the world contains spatio-temporal opportunities for the rise of great powers, but the struggle will also inevitably be sharp. Some scholars estimate that the impact of China’s rising power on the global economy is 20 times that of the United States during its ascent in the late 19th century, and 100 times that of the United Kingdom’s breakout period in the early 19th century. After 2008, Chinese high-tech enterprises rapidly became major players in the international market. Faced with China’s irreversible rise, established Western developed countries have employed all means to suppress China. It is undeniable that the external environment for cooperation facing China has absolutely deteriorated, bringing significant challenges. Yet, at the same time, the Chinese government is one of the few governments in the world today that emphasizes cooperation in its governance. Relying on the Belt and Road Initiative, China continuously strengthens cooperation with emerging markets and developing countries, while also striving to advance cooperation with developed countries—for example, the Industry 4.0 cooperation carried out with Germany.
2. The Chinese Solution for Coping with the Great Changes Unseen in a Century
Historical experience shows that the key for late-developing countries to seize the opportunity to catch up lies in achieving leapfrog development through the following path: leading scientific and technological progress through innovation-driven development; innovating institutional designs; promoting the efficacy of national governance capacity and the governance system; pushing the mode of production to break free from the "lock-in effect" of old paradigms to upgrade the industrial structure and achieve balance; realizing the mutual matching of various social sub-systems; and providing comprehensive structural support for key technologies. This involves improving the diffusion and driving capacity of leading industries and ultimately occupying the global technological high ground, oriented toward the global stage to expand "development space."
Therefore, the Chinese solution for responding to the New Era’s "Great Changes" [10] consists of the following three national strategies.
(1) Precise implementation of the Innovation-Driven Development Strategy
The world is currently experiencing an "innovation cluster" (innovation swarm), where various disruptive technologies are constantly emerging and determining the future direction of human society. This has caused national competition to truly move toward competition over high and new technologies and strategic emerging industries. We can proceed from the following aspects: First, continuously increase investment in foundational innovation to solve "chokehold" problems [11] and achieve high-level self-reliance and self-strengthening in science and technology. We must concentrate efforts on key fields such as intelligent manufacturing, new materials, and biotechnology to form a first-mover advantage in innovative development, providing powerful technical support for the development of other industries through technology sharing and knowledge diffusion, thereby fundamentally solving "chokehold" issues. Second, earnestly build a technological innovation system with enterprises as the mainstay, exploring the construction of diverse and open innovation cooperation platforms between universities, R&D institutions, and enterprises. At present, China has not yet built an efficiently connected, multi-party innovation loop; various innovation organizations have poor synergy in sharing innovation information, utilizing scientific talent, and circulating innovation capital, making it difficult to form a "1 plus 1 is greater than 2" linkage effect [36]. To this end, we must eliminate communication barriers between different innovation subjects and promote the efficient flow of resources across various organizations to form open and cooperative innovation networks and diverse innovation communities. Third, create a favorable institutional environment for innovation, breaking down systemic and mechanistic barriers, clearing innovation channels, and establishing an open technological innovation system that is enterprise-led, market-oriented, and features the deep integration of industry, academia, and research. Xi Jinping has repeatedly emphasized: "China is willing to strengthen cooperation with all countries in the protection of intellectual property rights, create a sound innovation ecosystem, and promote technological exchanges and cooperation with all countries on the basis of market-oriented and law-based principles." Fourth, cultivate high-end innovative talent and promote the overall improvement of the quality of the workforce, optimizing the talent supply structure in accordance with the requirements of the new technological revolution. We must continue to increase investment in education and rationally allocate educational resources, highlighting a "high-end, sophisticated, sharp, and scarce" orientation [12], optimizing the talent structure, improving talent quality, strengthening talent incentives, and building an internationally competitive talent cultivation system.
(2) Promoting the modernization of national governance capacity and the national governance system
The technological innovation brought by the new round of technological revolution brings more uncertainty to the social environment and security, which places higher demands on social governance and the construction of the rule of law. It is imperative to adjust and innovate institutional arrangements. Since the 18th CPC National Congress, in view of new situations and problems, the Party Central Committee has assessed the situation and proposed that "the general goal of comprehensively deepening reform is to improve and develop the system of socialism with Chinese characteristics and promote the modernization of the national governance system and governance capacity." They also issued the Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning Upholding and Improving the System of Socialism with Chinese Characteristics and Advancing the Modernization of National Governance System and Capacity (hereinafter referred to as the "Decision"). The general requirement is to discard all outmoded ideas and concepts, resolutely break down the defects existing in systems and mechanisms, breakthrough solidified barriers of interest, absorb all beneficial achievements of human civilization, and strive to form a more mature and defined system of socialism with Chinese characteristics that is systematic, standardized, and effective. We must give full play to the superiority of the socialist system, comprehensively deepen reform, and accelerate the development of the socialist market economy, democratic politics, advanced culture, harmonious society, and ecological civilization. We must fully mobilize the enthusiasm of the people to participate in the creation of social wealth, so that the fruits of development benefit all people more and more fairly. The "Decision" proposed several major measures including: upholding and improving the system of institutions for Party leadership; upholding and improving the system of institutions through which the people run the country; upholding and improving the system of socialist rule of law with Chinese characteristics; upholding and improving the system of socialist administration with Chinese characteristics; upholding and improving the basic socialist economic system; upholding and improving the system for flourishing and developing advanced socialist culture; upholding and improving the system for ensuring people’s wellbeing in both urban and rural areas; upholding and improving the social governance system based on collaboration, participation, and common interests; upholding and improving the system of institutions for ecological civilization; upholding and improving the system of the Party's absolute leadership over the people's armed forces; upholding and improving the "One Country, Two Systems" institutional system; upholding and improving the independent foreign policy of peace; upholding and improving the Party and state oversight systems; and strengthening the Party’s leadership over upholding and improving the system of socialism with Chinese characteristics and promoting the modernization of the national governance system and governance capacity.
(3) Promoting the formation of a new pattern of comprehensive opening-up and actively participating in global governance
Unlike the established capitalist countries that plundered resources and opened markets through colonial expansion, China's specific national conditions dictate that to complete large-scale industrialization, it requires a larger global market and a matching global supply and transport system [16]. Promoting the formation of a new pattern of comprehensive opening-up and actively participating in global governance is the necessary choice for our country to respond to the new round of technological and industrial revolution. Although economic globalization is currently encountering headwinds and China's opening-up faces severe challenges, as Xi Jinping stated: "A country can only be open with confidence if it is strong, and opening-up promotes a country's strength... As our economy enters the New Normal, if we are to maintain sustained and healthy economic development, we must establish a global vision, more consciously coordinate the two overall situations—domestic and international—comprehensively plan the grand strategy of all-around opening-up, and move toward the world with a more proactive posture" [41].
Promoting the formation of a new pattern of comprehensive opening-up can be approached from several aspects: First, persist in a two-way opening-up orientation that places equal emphasis on "bringing in" and "going out," promoting the effective utilization of both domestic and international markets and resources to expand the space for economic development. Second, increase the degree of opening in the western regions; while deepening the opening of coastal areas, promote inland and border areas to transform from "lowlands" of opening into "highlands," forming an opening pattern with land-sea linkage and mutual assistance between the east and west. Third, persist in the better combination of opening in the manufacturing sector with opening in the service sector. Through the opening of the service industry, we can force the upgrading and transformation of domestic manufacturing and improve the layout of foreign trade, thereby promoting the construction of a strong trade nation. Fourth, persist in the better combination of opening to developed countries with opening to developing countries, expanding the intersection of interests with all nations, comprehensively developing equal and mutually beneficial cooperation, and achieving diversification of export markets, import sources, and investment partners. Fifth, persist in the better combination of multilateral opening with regional opening, actively participating in the reform and construction of the global governance system, and acting as a builder and contributor to an open world economy.
IV. Conclusion
"Do not say it is easy to descend the mountain, for the traveler is often deceived into a false joy. Just as one enters the circle of ten thousand mountains, one mountain lets you go only for another to block your path." [13] Xi Jinping has many times cited this poem by Yang Wanli to caution the whole Party: to achieve the "Two Centenary Goals," we do not know how many slopes we must climb, how many hurdles we must cross, how much wind and rain we must experience, or how many hardships and obstacles we must overcome. For a China aimed at the great rejuvenation of the Chinese nation, the opportunities and challenges of the "Great Changes Unseen in a Century" coexist. We must precisely implement the innovation-driven development strategy, strive for strategic initiative in the scientific and technological fields, uphold and improve the system of socialism with Chinese characteristics, and promote the modernization of national governance capacity and the governance system. At the same time, we must follow the historical trend of the new technological revolution and promote the formation of a new pattern of comprehensive opening-up. China is walking on a "correct track" that conforms to the laws of historical development and is already prepared to welcome the maturation period of the Third Industrial Revolution and the upward wave of the sixth Kondratiev long wave. As Xi Jinping mentioned in his speech at the 2022 World Economic Forum virtual session: "We must proceed within the logic of historical progress and develop within the tide of the development of the times" [42].
Faced with the downward pressure on the global economy brought about by the shock of the "pandemic of the century" [14], the changes of the era are irreversible. The changes in our external environment will be fraught with various unforeseen risks and uncertainties, and international cooperation faces heavy difficulties. Therefore, we must continue to deepen our understanding of the "great changes unseen in a century" [15]. We must welcome new challenges with an open mind, the courage to reform, and scientific policies, adopting a proactive posture to seize the initiative amid these shifting dynamics.
The report of the 19th National Congress of the CPC proposed a "two-step" strategic arrangement [16] for the comprehensive buildup of a great modern socialist country, spanning the years 2020 to 2050. During this period, the global economy will experience one long-wave decline and one long-wave ascent, and will essentially complete the Third Industrial Revolution. We are currently experiencing the synergy phase of the Third Industrial Revolution and the downward wave of the sixth Kondratiev wave [17], which is expected to conclude around 2030, followed by the upward phase of the sixth Kondratiev wave. If we can seize the opportunity and successfully achieve our "first step" goal by 2035, then during the subsequent upward period of the global economic long wave—that is, the maturity phase of the Third Industrial Revolution—we will usher in the smooth realization of the "second step" goal: a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful.
Web Editor: Paul Source: Contemporary Economic Research [18], Issue 11, 2024.