Qu Yongyi: Leading New Quality Productive Forces with Scientific and Technological Innovation to Develop and Build a Modern Industrial System
In 2024, the Central Economic Work Conference proposed "leading the development of new quality productive forces through scientific and technological innovation to build a modern industrial system," designating this as a key priority for the year. This key task deepens our Party’s programmatic understanding of economic work and anchors the direction for high-quality development. We must profoundly recognize the realistic background and internal logic of this task, accurately grasp its scientific connotation and core essentials, and improve the systems and mechanisms for developing new quality productive forces tailored to local conditions. We must promote revolutionary breakthroughs in technology, innovative allocation of production factors, and the deep transformation and upgrading of industries to accelerate the construction of a modern industrial system.
I. Leading the development of new quality productive forces through scientific and technological innovation and promoting a new stage of innovation-driven development
Currently, global scientific and technological innovation has entered a period of intensive activity and accelerated expansion. Disruptive technologies in fields such as digital technology, biotechnology, new energy technology, and new materials are constantly emerging. We should conform to the trends of the global technological revolution and industrial transformation, maximize the use of the window of opportunity opened by the technological revolution, and go with the flow. We must focus on the frontiers and commanding heights of science and technology, integrate and optimize innovation resources, and strengthen technological breakthroughs and conversions in forward-looking and strategic fields to seize the high ground and accumulate new kinetic energy for building a modern industrial system.
Strengthening basic research and tackling key core technologies. Since the 18th National Congress of the CPC, China's scientific and technological innovation capabilities have increased significantly. In the 2024 Global Innovation Index released by the World Intellectual Property Organization, China ranked 11th, making it the only developing country in the top 30. At the same time, China's technological innovation still faces some difficulties and challenges, such as insufficient investment in basic research, weak original innovation capabilities, and a high degree of external dependence on key core technologies. Currently, China's expenditure on basic research accounts for less than 7% of total R&D expenditure, far lower than the 15% or more in developed countries such as the United States and Europe. As technological competition between nations increasingly shifts toward underlying technologies and original innovation, and as the U.S.-led West continues to strengthen its suppression and blockade of China's technological innovation, enhancing original innovation capabilities, ensuring the independent controllability of key core technologies, and achieving high-level technological self-reliance and self-strengthening have become critical tasks for China's technological innovation. General Secretary Xi Jinping has repeatedly emphasized the need to strengthen basic research and promote the assault on key core technologies. The 2024 Central Economic Work Conference, when deploying economic work for 2025, emphasized "strengthening basic research and the assault on key core technologies." These directives provide the direction for our efforts. We must combine the characteristics of basic research—such as its nature as a public good, its uncertainty, and its long-term scope—to strengthen government investment; improve the policy system supporting basic research investment; encourage enterprises, especially leading enterprises, to increase investment in basic research; and give full play to the advantages of the new-type whole-of-nation system [1] to build a hierarchical and categorized system for tackling key core technologies, thereby enhancing the efficacy of these breakthroughs.
Proactively laying out major scientific and technological projects. National major scientific and technological projects are an important path for the government to drive the improvement of innovation capabilities. China's major national projects, including major special projects and key R&D programs, have played a huge role in promoting China's catch-up in industries such as mobile communications, high-speed rail, and high-end equipment. General Secretary Xi Jinping attaches great importance to the forward-looking layout and research of national major scientific and technological projects and has issued many important instructions. The 2024 Central Economic Work Conference once again made strategic deployments for "proactively laying out major scientific and technological projects." On one hand, we must adhere to the strategic principles of "facing the frontiers of world science and technology, facing the main economic battlefield, facing the major needs of the country, and facing the life and health of the people" [2]. We must scientifically screen and proactively arrange a batch of major scientific and technological projects in key areas such as artificial intelligence, quantum technology, biomedicine, and integrated circuits, enhancing the foresight and precision of these projects. On the other hand, we must accelerate the reform of the organizational and management systems for major scientific and technological projects, promoting a better combination of an efficient market and a capable government. This involves reforming the initiation and management methods of major projects, improving evaluation mechanisms, and enhancing the overall efficacy of these projects in promoting the construction of a modern industrial system.
Strengthening the building of national strategic technological forces. National strategic technological forces are the backbone for promoting technological innovation and achieving technological self-reliance and self-strengthening. The 14th Five-Year Plan dedicated a specific chapter to "strengthening national strategic technological forces." General Secretary Xi Jinping attaches great importance to this, emphasizing the need to bolster these forces. We must clarify the strategic positioning of four types of entities: national laboratories, national research institutions, high-level research universities, and leading technology enterprises. Following the requirements of the "Four Facets" [2], we must keep pace with global technological development trends and clarify the functions and roles of each entity. At the same time, we must strengthen cooperation between different innovation subjects. Technological innovation is a complex systems engineering task that requires mutual support and relay-style collaboration among various entities. We must further stimulate the innovative vitality and release the potential of all types of innovation subjects, promoting resource sharing, interaction, and full cooperation to comprehensively enhance the efficiency of national strategic technological force construction.
II. Vigorously transforming and upgrading traditional industries, developing emerging industries, and cultivating future industries
The construction of the industrial system is a major lever for the government to promote high-quality economic development and a strategic focus of competition between major powers; it serves as a bridge between the macro and micro levels of the economic system. On one hand, the level of industrial development reflects the vitality and innovation capability of micro-level market entities; on the other hand, it determines the overall quality of economic development. Since the Reform and Opening-up, China's industrial scale has expanded rapidly and its industrial system has continuously improved, providing strong support for high-speed economic growth. At the same time, issues such as high resource consumption, significant environmental pressure, and low industrial value-added have emerged. As China's economy shifts from high-speed growth to a new stage of high-quality development, there is an urgent need to promote a systemic transformation of industrial development models and drivers. The 20th National Congress of the CPC proposed "building a modern industrial system," opening a new chapter in industrial transformation. The 2024 Central Economic Work Conference made the construction of a modern industrial system a key task for the year’s economic work, accurately grasped the industrial development situation, and made strategic deployments, emphasizing the "launch of the 'Artificial Intelligence plus' action and the cultivation of future industries." 2025 is a crucial year for global industrial transformation. New technologies such as AI, autonomous driving, and 6G will enter a critical period of large-scale industrialization, and industrial competition among major powers will further accelerate the reshaping of global industrial chains.
Actively utilizing digital and green technologies to transform and upgrade traditional industries. Traditional industries are the foundation of a modern industrial system, accounting for more than 80% of China's manufacturing. Neither the construction of a modern industrial system nor the development of new quality productive forces can ignore traditional industries. General Secretary Xi Jinping noted, "The transformation and upgrading of traditional industries can also develop new quality productive forces." The upgrading of traditional industries must target digitalization, intellectualization (AI-integration), and greening to climb toward the high end of the industrial value chain. First, use digital technology to transform traditional industries. Utilize emerging digital technologies such as 6G and AI to accelerate the digital and intelligent transformation of industries. Simultaneously, promote the coordinated conversion of the technological paradigm of productive forces and the digital economy paradigm. Establish a new industrial development model characterized by upstream-downstream integration, symbiosis, division of labor, and shared benefits. Promote the extension of industrial chains and encourage various market entities to accelerate resource integration and sharing. Second, use new energy and environmental protection technologies to transform traditional industries. Implement major energy-saving and carbon-reduction projects to reduce energy consumption and pollution in traditional industries, creating a batch of green factories, green parks, and green supply chains. Third, encourage localities and various enterprises to promote the digital and intelligent transformation of traditional industrial clusters. Encourage leading enterprises and digital service providers to build industrial internet and intelligent manufacturing service platforms to provide services for the digital and green transformation of firms within the industry.
Launching large-scale application demonstration actions for new technologies, products, and scenarios to accelerate the development of emerging industries. We must accelerate the application demonstrations of new technologies and products that have high technological maturity, sufficient market readiness, and strong industrial linkages. This will enhance societal confidence and expectations, accelerating the development of emerging industries so they can quickly become engines for leading the development of new quality productive forces and building a modern industrial system. Currently, China is leading the world in achieving large-scale industrialization. We should focus on large-scale application demonstration actions in strategic digital fields, such as intelligent connected vehicles in the consumer sector and intelligent manufacturing in the investment sector. In the short term, this will drive investment and boost consumption; in the long term, it will pull along breakthroughs in key core technologies of the industrial chain. This will allow us to form a new technological lead over advanced Western countries following 5G technology, leading the development of new quality productive forces on a broader scale. At the same time, we must actively cultivate strategic emerging industries such as new energy, new materials, advanced manufacturing, and electronic information. By improving long-term reform mechanisms for government policy support, factor input, incentives, and supervision in these industries, we can better allow the market to guide the direction of R&D and the allocation of innovation factors. This will enable enterprises to become the main subjects of innovation decision-making, R&D investment, and achievement transformation—becoming digital innovation leaders with outstanding core technological capabilities and strong integration capabilities. We must accelerate the transformation and application of scientific research results, clear all bottlenecks, and realize a "one-stop" leap in technological breakthroughs, product manufacturing, and market models for strategic emerging industries.
Grasping the opportunities of the technological revolution and industrial transformation, launching "Artificial Intelligence plus" actions, and accelerating the cultivation of future industries. Future industries are those that have not yet achieved large-scale commercialization but have great potential and are in the early stages of technological gestation and industrial incubation; they are high-growth, strategic, and pioneering. In recent years, with the continuous emergence of disruptive results, future industries have become new drivers of economic growth and new arenas for national competition. By tracking trends such as "future intelligence," "future production," "future computing power," and "future commerce," we should focus on developing future industries that can lead and drive strong growth in the real economy. Benchmarking against the global frontier of industrial innovation in AI, high-end robotics, quantum computing, and the metaverse, we should select tracks with high potential for key development. We should gradually pilot application scenarios for these technologies, strengthen content creation that matches future industries, and accelerate the formation of industrial chains and clusters for new quality productive forces to win the initiative in development. It should be noted that the industrialization of future industries is characterized by uncertainty and long-term development scales. This dictates that we must maintain strategic resolve, strengthening top-level design while "drawing one blueprint to the end," [3] pushing development forward with the attitude of "biting down on the green mountain and never letting go" [4]. Furthermore, the techno-economic paradigm of future industries differs significantly from that of traditional industries. Existing industrial development ideas and policies can hardly be copied. Therefore, based on a profound grasp of the patterns of future industries, we must clarify environmental requirements, find the right pressure points for development, and study safeguards suitable for future industries based on local conditions and specific sectors.
III. Improving the institutional and policy systems for leading the development of new quality productive forces and building a modern industrial system
Due to factors such as technological and market uncertainty, leading the development of new quality productive forces through scientific innovation does not follow a predetermined path or track. It requires strengthening institutional reforms and improving policy systems to optimize the environment and activate the endogenous power and vitality of markets and enterprises. The Third Plenary Session of the 20th CPC Central Committee mapped out a blueprint for further comprehensively deepening reform and advancing Chinese-path modernization. The 2024 Central Economic Work Conference studied the economic situation and promoted the implementation of reforms in key areas. From financial service support systems and innovation/venture capital to healthy competition models, these efforts have consolidated the institutional support for leading the development of new quality productive forces and building a modern industrial system through scientific and technological innovation.
Improve the multi-level financial service system. Scientific and technological innovation is characterized by significant uncertainty and risk, which dictates that constructing an external investment and financing environment conducive to innovation is key to promoting the development of new quality productive forces led by technological innovation. Looking at global technological innovation centers such as Silicon Valley, Boston, and Tokyo, without exception, they are all regions with sound financial systems and highly developed venture capital. In recent years, China has vigorously promoted the reform of the financial system, launching the Science and Technology Innovation Board (STAR Market) [5] in 2019 and implementing the pilot registration-based IPO system for the ChiNext board [6] in 2020, thus initially constructing a diversified, full-life-cycle financial service system. Addressing the requirements placed on the financial system by scientific and technological innovation, the 2024 Central Economic Work Conference [7] made further deployments. First, construct a technology-finance system adapted to scientific and technological innovation, strengthen financial support for major national scientific and technological missions and small and medium-sized technology enterprises, and improve support policies for long-term capital to "invest early, invest small, invest long-term, and invest in hard tech" [8]. Second, improve differentiated management mechanisms for different types of funds to prevent the crowding-out effect on private capital. Third, optimize the management of government-invested venture capital funds, reform and improve fund evaluation and fault-tolerance and exemption mechanisms (rongcuo mianze), granting state-owned venture capital higher fault-tolerance rates and longer recovery periods, and supporting and guiding state capital to become true "patient capital."
Stimulate the vitality of market entities. Competition is an important mechanism for promoting economic development, but it is also a double-edged sword. Healthy competition can fully stimulate the vitality of market entities and improve market performance, but vicious competition and "involutionary" [9] competition (neijuan shi jingzheng) are detrimental to the healthy development of the market. Precisely for this reason, regulating market competition has always been an important part of improving the socialist market economy system. Currently, the "involutionary" competition appearing in China stems from both the subjective motives of market entities pursuing profits through improper competition and the external pressure on enterprises to survive under downward economic pressure. It involves improper corporate behaviors such as "suicidal" price cutting and "denigrating" marketing (lacai shi yingxiao), as well as improper local government behaviors such as "competitive" investment promotion (panbi shi zhaoshang) and "follow-the-trend" development (genfeng shi fazhan). Aiming at "involutionary" competition arising from multiple causes and manifesting in diverse forms, we must adopt various means such as laws and regulations, industry self-discipline, and behavioral guidance for comprehensive rectification. First, increase the intensity of law enforcement against monopolies and unfair competition, and improve the legal and enforcement systems for market competition. Second, expand the implementation scope of the Regulations on Fair Competition Review, accelerate the issuance of implementation rules, and regulate government investment promotion behavior. Third, strengthen the role of industry associations and alliances, bolster industry self-discipline, and guide enterprises toward the track of healthy competition.
Implement a wider, broader, and deeper policy of opening up to the outside world. Due to the complexity and concentrated emergence of frontier technologies, it is difficult for us to achieve independent breakthroughs in all key technologies of a new technological trajectory. To lead the development of new quality productive forces through scientific and technological innovation and build a modernized industrial system, we must better utilize global scientific and technological resources and factor markets by deepening opening up. On one hand, we need to continue deepening cooperation with developed countries in scientific and technological innovation, investment in emerging industries, import and export of high-tech products and services, and the formulation of technical standards, so as to accelerate breakthroughs in frontier technologies and the R&D of disruptive technologies. On the other hand, we need to unite the vast numbers of emerging market countries and developing countries to participate in jointly constructing supply chain systems for emerging industries, developing markets, and formulating international governance rules for emerging industries. This will promote the rapid maturation of technical and industrial systems based on new technological trajectories, leading the development of new quality productive forces and the construction of a modernized industrial system.