Liu Ying: New Quality Productive Forces Stimulate the Surging Momentum of Economic Growth
Productive forces are the most fundamental, decisive power in determining economic growth. In conjunction with our country's current economic growth potential and the international background of reshaping global industrial and supply chains, China not only needs to transform and upgrade traditional industries but also needs to accelerate the cultivation and strategic deployment of emerging and future-oriented industries. By promoting a shift in the mode of economic development, exploring "new racing tracks" [1], pioneering new models, and developing new industries, we can realize the transformation of the economic structure and the conversion of developmental momentum, thereby breaking away from traditional economic growth paths. General Secretary Xi Jinping, considering the "Two Overalls" [2] in a coordinated manner, pointed out the need to seize the massive developmental opportunities brought by the Fourth Industrial Revolution and has made major strategic deployments to accelerate the development of new quality productive forces.
The 2024 Government Work Report listed "vigorously advancing the construction of a modern industrial system and accelerating the development of new quality productive forces" as the top priority task. The Third Plenary Session of the 20th CPC Central Committee proposed to "improve the systems and mechanisms for developing new quality productive forces according to local conditions." Therefore, we must give full play to the leading role of innovation, highlight a developmental direction for productive forces characterized by high technology, high efficiency, and high quality, and promote high-quality development by accelerating the development of new quality productive forces.
Significant Increase in Total Factor Productivity (TFP) as the Core Indicator
New quality productive forces take a significant increase in total factor productivity as their core indicator. The Third Plenary Session of the 20th CPC Central Committee proposed: "Improve relevant rules and policies, accelerate the formation of relations of production that are better adapted to new quality productive forces, promote the clustering of various advanced production factors toward the development of new quality productive forces, and significantly increase total factor productivity." TFP refers to the residual value in economic growth after deducting the contributions of factor inputs such as labor and capital; it reflects the impact of resource allocation, technological levels, production objects, organizational management, worker initiative, economic institutions, and social factors on production activities. There are two main paths to increasing TFP: first, increasing production efficiency through technological progress; second, increasing resource allocation efficiency through the recombination of production factors—mainly manifested as driving economic growth through intangible factors such as technological progress, institutional optimization, and improved organizational management beyond physical factor inputs. Achieving an increase in TFP requires coordinating technological innovation and institutional innovation to drive the formation of new industries, formats, and models, thereby accelerating the transformation of productive forces.
In accelerating the development of new quality productive forces, China possesses absolute advantages and massive potential in the core factor of data. Data is not only an important factor of production but can also empower and stimulate other factors to play their roles. For instance, based on data, we can promote the thrifty and efficient use of land, drive technological progress, and enhance labor efficiency. Industries such as the digital economy spawned by data currently enjoy vigorous development and a strong future trend in China. In 2022, the scale of China's digital economy reached 50.2 trillion yuan, firmly ranking second in the world in total volume, with a nominal year-on-year growth of 10.3%, rising to 41.5% of GDP. Under the widespread application and rapid development of digital industrialization and industrial digitization—particularly driven by the massive pull of digital consumer demand—China's digital economy has grown rapidly. Data shows that in 2023, the digital economy accounted for over 50% of China's economy, driving rapid economic growth and accelerating the transformation and upgrading of the industrial structure.
New quality productive forces are advanced productive forces. The transformation and upgrading of any country's economic structure will undergo a "pain period" and is not easily achieved. After nearly 10 years of supply-side structural reform, China's mode of economic growth has shifted, and the economic structure has subsequently undergone transformation, as evidenced by changes in the structure of export products. New quality productive forces feature high technology, high efficiency, and high quality; they represent new technologies, industries, formats, models, and growth drivers. They cannot be generated naturally but require technological innovation to lead industrial innovation. This involves changing traditional growth methods through revamped mechanisms and optimized systems to adapt to entirely new growth modes; it requires shifting traditional mindsets to adapt to new concepts, as well as management and institutional innovation. Accelerating the development of new quality productive forces is precisely the implementation of various comprehensive factor improvements to achieve a significant increase in TFP, which is also a concrete measure to implement the New Development Philosophy [3].
New quality productive forces are also green productive forces. To address global climate change, China signed the Paris Agreement with over 190 countries, contributing "Chinese strength" to the implementation of green development. In 2019, China pledged to no longer build new coal-fired power projects overseas. Regarding bank credit, China firmly implements the "environmental protection one-vote veto system" [4]. To advance green development, China supports photovoltaic and wind power generation, with its total generation accounting for approximately 80% of the global share. The production and export volumes of New Energy Vehicles (NEVs) both rank first in the world, welcomed by consumers globally. Whether it is technological progress or environmental protection, both serve to achieve a significant leap in TFP.
Traditional Industrial Transformation, Emerging Industries, and Future Industries as Carriers
Lifting industrial basic capabilities and the level of industrial chain modernization: "We must resolutely promote industrial transformation and upgrading, strengthen independent innovation, develop high-end and intelligent manufacturing, create industrial chains with strategic and overall significance, enhance industrial chain resilience, and raise industrial chain levels to form industrial chains with stronger innovation capabilities and higher added value through open cooperation." Currently, the digital, green, and intelligent transformation of traditional industries has become a massive growth source for China’s economy. It not only brings about equipment renewal and renovation but, more crucially, can improve production efficiency and the level of productive forces. In 2024, China's implementation of large-scale equipment updates and upgrades drove trillions of dollars in investment, stimulated the consumption of bulk commodities and durable goods, and effectively promoted the development of new quality productive forces, thereby assisting high-quality development.
Developing strategic emerging industries and future industries: "Strategic emerging industries represent the direction of the new round of scientific and technological revolution and industrial transformation. They are key fields for cultivating new growth drivers and gaining new competitive advantages for the future, possessing a pioneering and pillar-like nature. We must focus on cultivating leading industries with core competitiveness and develop strategic emerging industries with high technological content, strong market competitiveness, significant driving effects, and good economic benefits." Although the current proportion of strategic emerging industries and future industries is not yet high, their growth rate is fast and their pulling power is strong. Taking Intelligent Connected Vehicles (ICVs) as an example, they are not merely substitutes for traditional cars but represent a "new racing track" for the automotive industry. If traditional cars are hardware equipment—tools for mobility—then ICVs, represented by NEVs, are hardware plus software. Batteries, motors, power supplies, and computers have become the core equipment of NEVs, providing greater development space for the sensing, execution, and decision-making systems of ICVs. Many local governments in China are also actively focusing on the development of strategic emerging industries and future industries. Taking Beijing as an example, it is currently focusing on cultivating industries and industrial clusters with a strong industrial basis, robust technical capabilities, and high driving effects, such as next-generation information technology, biology, energy conservation and environmental protection, new materials, new energy, aerospace, and high-end equipment manufacturing. Beijing is not only focusing on high-end and intelligent connected vehicles in the automotive sector but is also accelerating development in biomedicine, actively promoting the layout of the artificial intelligence industry, driving research and development in industrial robotics, and accelerating high-tech industries such as integrated circuits and semiconductors. Notably, as an international center for scientific and technological innovation, Beijing has laid out 20 future industry fields across six major categories: future information (represented by quantum information), future health (gene technology), future manufacturing (humanoid robots), future energy (new energy storage), future materials (superconducting materials), and future space (satellite networks). It is implementing eight major actions to build an ecosystem for the innovative development of future industries.
Deepening Reform to Release New Potential for New Quality Productive Forces
General Secretary Xi Jinping pointed out: "The ultimate goal of supply-side structural reform is to satisfy demand; the main direction is to improve the quality of supply; and the fundamental path is to deepen reform." The Third Plenary Session of the 20th CPC Central Committee proposed: "We must lead reform with the New Development Philosophy, base ourselves on the New Development Stage, deepen supply-side structural reform, improve the incentive and constraint mechanisms for promoting high-quality development, and shape new drivers and advantages for development." Comprehensively deepening reform is the only way to accelerate the development of new quality productive forces and realize high-quality development and Chinese-path modernization.
Deepening economic structural reform to release massive reform dividends: Liberating and developing productive forces is an essential characteristic of socialism and a fundamental requirement for high-quality development. China's economy still has massive reform dividends to be released; therefore, we must continue to deepen economic structural reform. By advancing market-oriented factor reforms in various fields—including but not limited to establishing a high-standard market system and accelerating the construction of a unified national market—we can accelerate the development of new quality productive forces. This acceleration, in turn, helps cultivate the data factor market. China's advantage of a super-large-scale market will also drive the rapid development of new quality productive forces. Furthermore, on the road toward common prosperity, improving the reform of the mechanism for factor participation in income distribution will further stimulate growth potential and promote more substantial progress toward common prosperity for all people.
Deepening reform of the scientific and technological system: Science and technology are the foundation of a nation's strength; innovation is the soul of a nation's progress. A typical feature of new quality productive forces is the leading role of innovation, with technological innovation leading industrial innovation as its basic characteristic. "In 2023, China’s total social investment in research and experimental development (R&D) reached 3,327.8 billion yuan, with R&D intensity rising to 2.64%," exceeding the average level of the European Union, while patent applications have ranked first in the world for many consecutive years. Effectively transforming patents into productive forces requires not only the cultivation of angel investment and "patience capital" [5] but also the deepening of scientific and technological reform to liberate new quality productive forces. We must "optimize the organizational mechanism for major scientific and technological innovation, strengthen the breakthrough of key core technologies in a coordinated manner, and promote the systematic, institutionalized, and collaborative configuration of innovation forces, factors, and talent teams." This involves strengthening the national strategic scientific and technological force, "concentrating resources to accomplish major undertakings" [6], and building a system of "technology finance" suited to scientific innovation to strengthen financial support for R&D and technological transformation.
Deepening reform of the talent development system to release the "talent dividend": Human resources are the primary resource and the most active, positive factor in innovation. Developing new quality productive forces ultimately depends on talent. Only by fully mobilizing the enthusiasm of every worker for innovation and entrepreneurship can we achieve a new leap in productive forces and grasp the initiative in development amidst fierce international competition. China has over 10 million university graduates every year, more than half of whom are technical talents; labor market reform helps accelerate the evolution of the "population dividend" into a "talent dividend." We must actively promote the transfer of labor from low-productivity sectors to high-productivity sectors, strengthen talent training, combine vocational education with professional training, accumulate human capital, implement employment incentive policies, provide high-quality public employment services, and strengthen the construction of labor market institutions and legislation to balance the interests and risk-bearing of both enterprises and workers.
Deepening financial system reform: Actively develop technology finance, green finance, inclusive finance, pension finance, and digital finance, and strengthen high-quality financial services for major strategies, key areas, and weak links. By implementing the deepening of financial system reform—especially increasing the proportion of direct financing and the strength of financial support for scientific and industrial innovation—we can accelerate the development of new quality productive forces and promote high-quality economic development.
Deepening fiscal and tax system reform to release massive developmental potential: Compared to Western countries, China's fiscal and tax system reform has significant room for growth. Not only can the adjustment of central-local fiscal relations release massive potential, but the reform of the tax structure will also stimulate great momentum. On the one hand, establishing a central-local fiscal relationship with clear powers and responsibilities, coordinated financial resources, and regional balance—balancing the distribution of fiscal powers and increasing local fiscal powers in proportion to their administrative responsibilities—will promote the development of new quality productive forces. On the other hand, based on the issuance of 1 trillion yuan in ultra-long-term special government bonds, we can use fiscal policy to drive "patience capital" to support the accelerated development of new quality productive forces.