Zhang Chengsi: Creating a Relaxed Policy Environment for Developing New Quality Productive Forces
Amidst the complex situation of external environmental uncertainty and internal structural reforms, the 2024 Central Economic Work Conference [1] has made comprehensive policy arrangements for economic work in 2025. The conference emphasized that while adhering to the general principle of seeking truth from facts and "seeking progress through stability," we must implement more proactive and effective macroeconomic policies. Furthermore, we must drive industrial transformation and upgrading through scientific and technological innovation, focusing on the development of new quality productive forces. This move is not merely a strategy for stabilizing growth to counter short-term fluctuations, but a vital direction for consolidating the foundations of long-term development and nurturing drivers for high-quality development.
The connotation of new quality productive forces lies in reshaping industrial value chains and resource allocation structures through digital, green, and intelligent means, accelerating the iterative upgrading of traditional industries, and giving rise to new industries, new models, and new technologies. In this process, fiscal policy and monetary policy—the two core tools of macroeconomic regulation—need to achieve coordination and linkage at a higher level. Fiscal policy should focus on enhancing basic support capabilities and resource allocation efficiency, while monetary policy should focus on optimizing the financial ecosystem and financing environment, thereby providing a more robust institutional environment and capital nourishment for industrial transformation. Under the influence of this policy "combination punch," new quality productive forces are expected to become the core driving force for achieving a new leap in China's economy.
Injecting Momentum into New Quality Productive Forces with Proactive Fiscal Policy
At the current stage, fiscal policy must not only achieve counter-cyclical adjustment but also address the issue of structural optimization. By increasing the intensity of fiscal expenditure, optimizing the direction of investment, and improving the efficiency of fund utilization, we can provide long-term and powerful policy support for the development of new quality productive forces. This Central Economic Work Conference explicitly proposed raising the fiscal deficit ratio, increasing the issuance of special-purpose treasury bonds [2], and expanding the scale and scope of local government special-purpose bonds [3], while emphasizing the need to "activate existing assets and optimize incremental growth." This series of measures will aggregate resources and inject vitality into the development of strategic industries, breakthroughs in key core technologies, and the improvement of weak links in the industrial chain.
First, increase fiscal support for scientific and technological innovation and basic research to solidify the foundation for developing new quality productive forces. Fields such as key technologies, core components, and basic software have consistently been weak links in the upgrading of China's industrial chain. Through the precise allocation of special funds, guiding funds, and investments within the central budget, we can build a more comprehensive scientific research ecosystem. Supporting enterprises, universities, and research institutions to form an "innovative synergy" will help accelerate breakthroughs in "chokepoint" [4] areas. In this way, source innovations for new quality productive forces will continuously emerge, laying a solid foundation for industrial structural optimization.
Second, provide more targeted incentives for industrial digitalization and green transformation. Combining local government special-purpose bonds with the "Two Major" [5] projects and "Two New" [6] policies can promote the construction of major infrastructure, the cultivation of industrial clusters, and the building of public service platforms, creating conditions for the formation of emerging industrial ecosystems. At the same time, using fiscal tools to broaden the scope of project capital use will provide sufficient construction funds for data centers, intelligent manufacturing industrial parks, and green energy bases, thereby reducing the initial investment costs for enterprises and clearing obstacles for the development of new quality productive forces.
Third, in the process of optimizing expenditure structures and implementing policies to benefit people's livelihoods, leverage fiscal resources to guide the expansion of domestic demand and the upgrading of consumption. Moderately increasing the levels of old-age pensions for urban and rural residents, medical security, and income for low- and middle-income groups will release consumption potential and form a broad market demand for innovative products and services. The development of new quality productive forces requires not only technology and capital-driven forces but also a stable and strong market pull. This necessitates strengthening fiscal policy design around ensuring livelihoods and promoting consumption upgrades, helping to build a virtuous cycle of smooth supply and demand, and accelerating the transformation of innovative achievements into actual productive forces.
Adding Vitality to New Quality Productive Forces with Moderately Loose Monetary Policy
After years of development, the monetary policy tools of the People's Bank of China have become increasingly diverse and mature. While performing aggregate regulation of the economy, it pays more attention to structural optimization and efficient resource allocation. In this context, "moderately loose" does not mean aimless "irrigation" [7]; rather, it means providing a stable financing environment and reasonable capital costs for the development of new quality productive forces by leveraging both the aggregate and structural functions of monetary policy tools.
On one hand, the central bank’s timely and moderate use of tools such as lowering the reserve requirement ratio (RRR) and interest rates helps maintain reasonably ample liquidity, ensuring that monetary growth matches economic growth and price level targets. This measure provides financial institutions with a stronger willingness and capacity to extend credit, offering long-term, low-cost capital support for innovative enterprises, high-tech industries, and green projects. A stable supply of financial resources helps enterprises increase R&D investment, rapidly expand production capacity, shorten the commercialization process of new technologies, and promote the large-scale implementation of innovative achievements.
On the other hand, the central bank is further strengthening the structural guidance capability of monetary policy. In traditional credit markets, financing for fields such as high-end manufacturing, the green economy, and digital industries still faces challenges like information asymmetry and insufficient collateral. Through "targeted drip irrigation" [8] tools such as policy bank re-lending, re-discounting, and special industrial loan quotas, financial "living water" can reach innovative subjects directly. Particularly for key industrial chain segments and "Specialized, Refined, Unique, and Novel" (SRUN) [9] enterprises with great growth potential, risk weights can be moderately reduced and credit enhancement mechanisms can be innovated. This ensures that truly capable and promising innovative enterprises obtain relatively stable financial support, providing them with the basic conditions for medium-to-long-term development from their early growth stages.
At the same time, China is actively exploring the expansion of the central bank's macro-prudential management and financial stability functions. By starting with regulating the flow of funds and preventing excessive leverage and improper speculation, we ensure that new currency flows more into innovative areas of the real economy rather than stagnating in inefficient projects. By introducing more precise risk monitoring and prudential management into the execution of monetary policy, we improve resource allocation efficiency and avoid large-scale capital inflows and outflows or short-term speculation, ensuring a more stable and sustainable financial environment for developing new quality productive forces.
Cooperative Macroeconomic Policies to Build Fertile Soil for New Quality Productive Forces
Fiscal and monetary policies should not operate in isolation but should complement and reinforce each other. Effective coordination between the two is crucial in addressing issues such as weak foundations, industrial chain breaks, and imperfect market structures encountered during the development of new quality productive forces.
In terms of timing, the forward-looking layout of fiscal expenditure can build infrastructure, public platforms, and industrial alliance networks for industrial innovation, laying a solid foundation for emerging industrial chains. Once innovative subjects receive fiscal support during stages of technical breakthroughs, equipment introduction, and preliminary market validation, monetary policy can provide continuous credit support and financing convenience during stages of industrial chain extension, capacity expansion, and market promotion. This drives the steady development of enterprises through their entire lifecycle—from "startup" to "growth" to "maturity." In this process, fiscal and monetary policies form a "dual-wheel drive" and a mutually reinforcing policy framework, making the evolution of new quality productive forces smoother.
In the allocation of policy tools, fiscal policy creates external conditions for accelerating scientific and industrial innovation through measures such as public investment, special funds, and tax/fee reductions. Monetary policy, meanwhile, provides the necessary financial "living water" for industrial upgrading by reasonably guiding market interest rates, broadening financing channels in multi-level capital markets, and innovating credit enhancement models. As fiscal investment in basic research, public technical service platforms, and industrial facilities gradually generates spillover effects, more innovative enterprises will gain a foothold in the market, thereby attracting active participation from commercial banks, venture capital institutions, and other social capital. This virtuous cycle of combined fiscal and monetary forces can significantly improve overall resource allocation efficiency.
Regarding urban-rural integration and regional coordinated development, the synergy of fiscal and monetary policy can also play a positive role. Under the guidance of fiscal policy, key industrial clusters and national-level innovation platforms are laid out in an orderly manner; monetary policy then provides incentives for local financial institutions to enhance credit service capabilities for county-level economies, small and medium-sized enterprises (SMEs), and upstream/downstream enterprises in the industrial chain. By vigorously promoting urban-rural integration and regional coordinated development, the diffusion effect of new quality productive forces can permeate both the horizontal and vertical dimensions of economic development, helping China fully enjoy the spillover dividends of innovation-driven development.
Currently, China is in a critical period of transforming its development mode, optimizing its economic structure, and shifting growth drivers. New quality productive forces are the long-term engine for driving industrial chain upgrades and promoting steady economic growth. Organically linking fiscal and monetary policies can build the institutional soil for the healthy growth of new quality productive forces and realize an interactive cycle between domestic demand expansion and supply innovation. Furthermore, developing new quality productive forces will promote employment and improve people's livelihoods. Innovation-driven industrial upgrades help enhance the skills and income levels of workers, thereby driving the upgrading of consumption demand and creating space for the sustained growth of high-end products and green consumption. Macroeconomic policy acts as a "catalyst," aiding the virtuous interaction between industrial and consumption upgrades by optimizing policy design and implementation mechanisms.
Looking ahead, with the continuous enhancement of the synergistic effects of fiscal and monetary policies and the vigorous development of new quality productive forces, the Chinese economy will achieve high-quality development from a higher starting point. New technological changes will improve total factor productivity (TFP) at its source, continuously giving rise to new industrial clusters and business models. The emergence and cultivation of innovative talent, along with cooperation and the introduction of international innovative resources, will further expand the depth and breadth of industrial development. In this process, the coordination and forward-looking layout of macroeconomic policies can both guarantee the direction and speed of the development of new quality productive forces and provide strong momentum for China to effectively resolve external shocks and enhance endogenous stability.
(The author is Vice Dean and Professor at the School of Finance, Renmin University of China) Source: Chinese Academy of Social Sciences Network — Guangming Daily Online Editor: Huihui