Qiao Xiaonan: New Requirements and New Tasks for Accelerating the Construction of a Modern Economic System
The Fourth Plenary Session of the 20th CPC Central Committee adopted the "Recommendations of the Central Committee of the Communist Party of China on Drawing Up the 15th Five-Year Plan for National Economic and Social Development" (hereinafter referred to as the "Recommendations"). This document not only sketches a grand blueprint for economic and social development during the "15th Five-Year Plan" period [1] but also explicitly proposes that "major breakthroughs be achieved in the construction of a modern economic system." The construction of a modern economic system concerns the overall situation of Chinese-path modernization. Only by persisting in key breakthroughs and coordinated advancement, and by accelerating the construction of a modern economic system, can we fully release the enormous potential of the Chinese economy. This will provide powerful support for achieving decisive progress in basically realizing socialist modernization through the effective improvement of quality and the reasonable growth of quantity.
I. Comprehensively understanding the new requirements for supporting Chinese-path modernization with a modern economic system
The construction of a modern economic system is an important strategic task concerning the overall situation of Chinese-path modernization. The process of a country advancing modernization is a process of comprehensive development in various fields, including economy, politics, society, culture, and ecological civilization. Since economic development lays the material and technical foundation for modernization, modernization in the economic field is crucial to the overall modernization process. General Secretary Xi Jinping pointed out: "For a nation to be strong, its economic system must be strong. Only by forming a modern economic system can we better follow the trend of modern development, gain the initiative in international competition, and provide strong support for modernization in other fields. In accordance with the requirements for building a great modern socialist country, we must accelerate the construction of a modern economic system to ensure that the goal of building a great modern socialist country is realized as scheduled." It should be noted that Chinese-path modernization shares the general characteristics of modernization but also possesses distinct Chinese features. Its essence is socialist modernization, which breaks the myth that modernization equals Westernization. Therefore, building a modern economic system to support Chinese-path modernization must inevitably reflect the essential requirements of socialism with Chinese characteristics. The construction of a modern economic system not only involves the aspect of liberating and developing the productive forces but will also demonstrate the characteristics of a socialist market economy within the dimension of the relations of production.
The modern economic system is an organic whole. Within it, advanced productive forces are developed through the construction of a modern industrial system, while common prosperity is promoted by optimizing the income distribution system. It promotes the harmonious coexistence of humanity and nature through the construction of a green development system and persists on the path of peaceful development characterized by mutual benefit and win-win results through the exploration of a system of comprehensive opening-up. It gives full play to the decisive role of the market in resource allocation and better plays the role of the government. By building a high-level socialist market economy, it achieves the optimization of resource allocation efficiency and the maximization of benefits. As General Secretary Xi Jinping pointed out, "high-quality development is the primary task of building a modern socialist country in all respects," and "promoting high-quality development requires the construction of a modern economic system." This is an "urgent requirement for crossing the threshold and a strategic goal for our country's development."
We must understand the theoretical connotations and practical requirements of achieving major breakthroughs in the construction of a modern economic system based on a systems perspective. A systems perspective requires that in the process of perceiving, analyzing, and solving problems, one must see both the parts and the whole, achieving unity between key breakthroughs in specific areas and overall planning for the whole, emphasizing simultaneous progress and mutual promotion. The modern economic system is an organic whole composed of the interrelationships and internal links among all links, levels, and fields of socio-economic activities. Specifically, it includes six "systems" and one "mechanism."
First is an industrial system characterized by innovation-led and coordinated development. This takes up the requirement for innovation-driven development—namely, firmly grasping the historical opportunity of the new round of technological revolution and industrial transformation, persisting in driving industrial innovation through technological innovation, and consolidating the material and technical foundation of Chinese-path modernization. Second is a system for urban-rural and regional development that highlights advantages and coordinated linkages. This takes up the requirement for coordinated development—namely, addressing problems such as the urban-rural gap and regional disparities, optimizing the layout of national spatial development, strengthening the strategy of functional zoning [2], further exerting the role of regional development strategies, coordinating new-type urbanization with all-around rural revitalization, and striving to promote balanced and coordinated development. Third is a green development system that is resource-saving and environment-friendly. This takes up the requirement for green development—namely, coordinately promoting carbon reduction, pollution reduction, greening expansion, and growth. In the process of economic development, it properly handles the relationship between the expanded reproduction of economy and society and the reproduction of ecosystems, promoting the harmonious coexistence of humanity and nature. Fourth is a system of comprehensive opening-up that is multi-dimensional, balanced, secure, and efficient. This takes up the requirement for open development—namely, based on promoting the formation of a development pattern suited to the stage of economic development, it properly handles the relationship between the domestic circulation and the international circulation, and better promotes internal-external linkages by expanding high-level opening-up to the outside world. Fifth is an income distribution system that embodies efficiency and promotes fairness. This takes up the requirement for shared development. Chinese-path modernization is the modernization of common prosperity for all people. Only by persisting in sharing by all, sharing in all aspects, sharing through joint contribution, and sharing progressively, can we truly implement the people-centered development philosophy, ensuring that development is for the people, relies on the people, and its fruits are shared by the people. Sixth is a market system that is unified, open, competitive, and orderly. This takes up the requirement for building a national unified large market—regulating and optimizing market access, market order, and market competition; eliminating and preventing market barriers, market protectionism, and market fragmentation; promoting the free flow and efficient allocation of goods and factors; and enhancing the internal momentum and reliability of the domestic macro-circulation. Seventh is an economic mechanism that gives full play to the role of the market and better plays the role of the government. This takes up the requirement for further comprehensively deepening reform to build a high-level socialist market economy mechanism, stimulating the vitality of micro-entities and improving the efficacy of macro-governance. Integrating the above six "systems" and one "mechanism," achieving major breakthroughs in the construction of a modern economic system requires not only decisive progress in each specific link, level, and field, but even more so that different links, levels, and fields coordinate with each other and achieve organic unity, thereby fully releasing the enormous potential for high-quality development in the Chinese economy.
The construction of a modern economic system is conducive to achieving the effective improvement of the quality of our economy and the reasonable growth of its quantity. Although economic growth achieved purely by increasing factor inputs cannot be regarded as economic development, economic growth constitutes a necessary prerequisite and important foundation for economic development. In the short term, only by maintaining necessary economic growth can we promote the increase of income for residents, enterprises, and the government, thereby expanding aggregate demand, improving capacity utilization levels, stabilizing employment, and preventing financial debt risks. In the long term, only by maintaining stable economic growth can we possess sufficient economic surplus for technological research and development (R&D) and accumulated investment, thereby promoting capacity renewal and industrial upgrading, and achieving improvements in production efficiency and the optimization of economic structures.
Specifically regarding the strategic arrangement of comprehensively advancing the great rejuvenation of the Chinese nation through Chinese-path modernization and achieving the Second Centenary Goal [3], the report to the 20th CPC National Congress proposed a two-step strategic arrangement for building a great modern socialist country in all respects. Among these, an important landmark indicator for basically realizing socialist modernization by 2035 is for the per capita Gross Domestic Product (GDP) to reach the level of a moderately developed country. This highlights the importance of maintaining an appropriate speed of economic and social development. In 2024, China's per capita GDP was $13,445, placing it among upper-middle-income countries. Although there is currently no clear international definition of a "moderately developed country," it is generally believed that per capita GDP needs to reach over $20,000 or even higher. From this, it can be seen that China's development level still has a certain distance to go compared to moderately developed countries. Therefore, it is highly necessary for the economy to maintain an average annual growth rate of 4.5% to 5% during the "15th Five-Year Plan" and even the "16th Five-Year Plan" periods.
Precisely for this reason, the Fourth Plenary Session of the 20th CPC Central Committee took into account the short term and the long term, growth and development, and quantity and quality, scientifically setting the main goals for economic and social development during the "15th Five-Year Plan" period. It requires both that "significant results be achieved in high-quality development" and that "economic growth be maintained within a reasonable range." How, then, can these planning goals be completed? The key lies in leveraging the inherent advantages of the Chinese economy, applying force coordinately from both the supply and demand sides, organically combining the deepening of supply-side structural reform with the implementation of the strategy of expanding domestic demand, accelerating the construction of a modern economic system, and promoting the effective improvement of economic quality and the reasonable growth of quantity. On the supply side, we must leverage the advantages of a complete industrial system; on the demand side, we must leverage the advantages of an ultra-large-scale market, releasing growth potential by smoothing the national economic circulation. We should further leverage the advantages of the basic economic system [4], taking the exchange and distribution links as focus points. On one hand, we must improve the market system, heighten circulation efficiency, and stimulate innovation vitality; on the other hand, we must optimize the distribution system, adjust the demand structure, and release the potential of domestic demand. Furthermore, in medium- and long-term development, we must continuously replace the "demographic dividend" with a "talent dividend," fully leveraging the advantages of rich human resources. By relying on independent innovation, we must continuously open up new fields and "new tracks" [5] for economic development, forming new advantages in international competition.
II. Promoting industrial innovation through technological innovation and developing new quality productive forces
The construction of a modern economic system requires the establishment of an innovation system characterized by high-level technological self-reliance and self-strengthening. General Secretary Xi Jinping pointed out that "innovation is the primary driving force leading development and the strategic support for building a modern economic system." The modernization of technology is the prerequisite for the modernization of industry. If technological modernization cannot be realized, advanced productive forces cannot be birthed, and overall modernization will be out of the question. To this end, we must coordinate science and technology, talent, and education; improve the overall efficacy of the national innovation system; and gradually shift from "following" in technology to "running alongside" and "leading," thereby enhancing the nation's capacity for independent innovation.
In the field of science and technology, we must give equal consideration to basic research and applied research. Basic research must emphasize basic disciplines, basic theories, and underlying technologies, while possessing both macro and micro research perspectives, and having the courage to explore in multi-disciplinary directions, thereby improving theoretical research and original innovation capabilities. Applied research should leverage the advantages of the new type of whole-of-nation system [6], organically integrating forces from all parties to conduct concentrated "tackling of key problems" (攻关 gōngguān) regarding the "great tools of the nation" [7] and key core technologies in vital fields. Simultaneously, we should guide the clustering of innovation resources toward enterprises, and increase R&D intensity in fields such as artificial intelligence, biotechnology, and quantum technology that may bring opportunities for "changing lanes to overtake" (huàndào chāochē). We must strive to form original, disruptive, and leading achievements to grasp the initiative in international technological and industrial competition.
In the field of education, the cultivation of talent belongs to the category of the reproduction of labor power. This should aim to support technological innovation and serve economic development, adapting to the requirements of social reproduction. Therefore, we should gradually establish a virtuous interactive mechanism between independent technological innovation and the independent cultivation of talent, focusing on promoting the integration of science and education as well as the integration of industry and education. In the field of talent, we must firmly establish the concept that "talent is the primary resource." Based on the type, characteristics, and growth patterns of different talents, we should focus on institutional and mechanistic reforms in talent cultivation, support, evaluation, incentives, and mobility, effectively supporting the development of new quality productive forces through talent advantages.
Furthermore, we must deeply advance the "Digital China" initiative and fully implement the "AI Plus" action, leading changes in research paradigms with AI and empowering all links of the economic cycle and thousands of industries with AI. Using a complete industrial system to provide specific application scenarios and a massive consumer market to achieve economies of scale—thereby thinning out cost expenditures—we should adhere to the principle of being "lightweight, open-source, and low-energy." We must persist in developing vertically specialized models (垂类模型) with commercial feasibility and R&D for intelligent terminals and agents with specific functions, promoting the deep integration of the digital economy and the real economy.
The construction of a modern economic system requires the establishment of a modern industrial system with advanced manufacturing as its backbone. History has fully proved that the transition from a traditional agricultural society to a modern industrial society has greatly promoted the development of social productive forces. Therefore, industrialization is the core driver of modernization, and the level of industrial modernization determines the level of the modern industrial system. Currently, some developed countries are continually troubled by trade and fiscal deficits. The fundamental reason is that their industrial systems have undergone de-industrialization and financialization, leading the economic structure to "shift from the real to the virtual" (tuō shí xiàng xū), which in turn causes trade deficits to widen and leads them onto a path of debt expansion. Meanwhile, the vast number of developing countries, in the process of participating in economic globalization, can only achieve...
The fundamental cause of "underdeveloped" development lies in the failure to complete industrial accumulation, or in the fact that portions of a country’s existing industry are controlled by international monopoly capital, causing the nation to lose its autonomy over economic development and rendering it unable to escape a long-term state of dependency. From this, it is evident that whether viewed from the perspective of development or security, we "must place the focus of economic development on the real economy," "make promoting the high-quality development of the manufacturing industry a vital link in constructing a modern economic system," accelerate the building of a manufacturing superpower, maintain a reasonable proportion of manufacturing in the economy, and construct a modern industrial system with advanced manufacturing as its backbone. China has maintained its position as the world leader in manufacturing share for 15 consecutive years and has formed comprehensive advantages characterized by large scale, complete systems, and rapid upgrading. In the future, we must closely track the evolution of the new round of scientific and technological revolution and industrial transformation, accelerate the development and application of new quality productive forces, optimize and upgrade traditional industries, and cultivate and strengthen emerging and future-oriented industries.
A modern industrial system not only promotes the development of productive forces by replacing labor with machines but also forms an interconnected industrial system through "machines making machines." Therefore, traditional, emerging, and future-oriented industries are all indispensable components of a modern industrial system; without the support of traditional industries, it is impossible for emerging and future industries to achieve development. This means we should not focus one-sidedly on emerging and future industries while neglecting traditional ones. Currently, the capacity and output of many of China's traditional industries already rank first in the world; the focus of the next stage of development lies in improving quality and upgrading. On one hand, we must persist in transformations that are intelligent, green, and integrated; on the other hand, we must strengthen technical capabilities, the leadership of standards, and brand building. Regarding emerging industries, efforts should be made to create emerging pillar industries with high technology intensity, high industrial linkage, strong market expansion capabilities, large output scales, and significant economic benefits. We must leverage their advantages of rapid technical innovation, rapid integration and empowerment, and rapid industrial upgrading. While developing their own scale, these industries should innovate business models in directions such as platform-based design, intelligent manufacturing, networked collaboration, personalized customization, and service-oriented extension to empower traditional industries. Regarding future-oriented industries, we should encourage innovation in technical routes, application scenarios, business models, and regulatory rules, strengthen the support of "patient capital" [8], and cultivate new economic growth points.
Furthermore, while advancing industrial modernization, we must also attach importance to the modernization of agriculture and the service sector. Agricultural development is vital to rural revitalization and food security; therefore, we must coordinate the development of technology-driven agriculture, green agriculture, quality-oriented agriculture, and brand-centered agriculture to build agriculture into a modern, major industry. Unlike the role of agriculture and industry in directly developing new quality productive forces, we must pay particular attention to leveraging the service sector's role as the primary channel for absorbing employment, promoting its high-quality and efficient development. We must both aim for the transformation and upgrading toward a modern industrial system—accelerating the extension of producer services toward specialization and the high end of the value chain—and aim to meet the people's ever-growing needs for a better life by encouraging the high-quality, diversified, and convenient development of consumer services.
Constructing a modern economic system requires establishing a green development system supported by green productive forces. General Secretary Xi Jinping has pointed out that "green development is the defining feature [9] of high-quality development, and new quality productive forces are themselves green productive forces," and that "green development is an inevitable requirement for constructing a modern economic system." The production and life of human society require the consumption of various energy resources and are inevitably accompanied by the discharge of pollutants. The ecosystem itself possesses a certain capacity for self-purification; however, once the volume of pollutants discharged by human society exceeds the ecosystem's self-purification level, it damages the environment, leads to ecological degradation, and subsequently affects production efficiency and human health. To prevent pollutant discharge from exceeding the carrying capacity of the ecological environment, we must undertake man-made emission reductions and pollution control. The means of production and labor consumed in these processes must also be included in the evaluation of production efficiency. Thus, the essence of green productive forces is green production efficiency—that is, a comprehensive production efficiency that includes both production inputs and inputs for emission reduction and pollution control. Consequently, the level of development of green productive forces will be influenced by factors such as production technology, emission reduction and pollution control technologies, and the intensity of environmental governance.
Chinese-path modernization must take into account both the reproduction of the economic system and the reproduction of the ecosystem; thus, a green development system supported by green productive forces becomes a vital component of a modern economic system. In the future, China must accelerate the formation of green modes of production and lifestyles, using the "dual carbon" goals (Carbon Peaking and Carbon Neutrality) [10] as a primary driver to coordinately advance the transformation of the energy system and the reduction of pollutant emissions, promoting new and major progress in the construction of a "Beautiful China." First, we must deeply advance the zoned management of the ecological environment, dynamically aligning regional control schemes with land-space planning and socio-economic development plans, implementing differentiated protection and restoration strategies for different control units to enhance the effectiveness of ecological governance. Second, transitions from carbon peaking to carbon neutrality should be the starting point for implementing a "dual control" system for both total carbon emissions and carbon intensity, establishing a comprehensive institutional system involving regional carbon assessment, industrial carbon control, corporate carbon management, project carbon evaluation, and product carbon footprints. Third, targeting the primary contradiction of carbon emissions in the energy sector: on one hand, we must persist in the simultaneous development of wind, solar, hydro, and nuclear power, giving equal weight to centralized and distributed models, and coordinating local consumption with outward transmission to continuously increase the proportion of new energy supply; on the other hand, focusing on pushing coal and oil consumption to their peaks, we must strictly control fossil fuel consumption and strengthen its clean and efficient utilization. Fourth, we should focus on constructing a new type of power grid system adapted to the energy structure transformation and the characteristics of new energy, promoting the coordinated development of "source-grid-load-storage" [11]. By developing smart grids and microgrids, we will enhance regulation/allocation capabilities and levels of safety and resilience. Finally, we must improve the system for total resource management and comprehensive conservation, transforming resource utilization methods and improving resource utilization efficiency through the deep implementation of a comprehensive conservation strategy and the vigorous development of a circular economy.
III. Optimizing and Adjusting the Strategic Layout of the National Economy to Unblock Economic Circulation
Constructing a modern economic system requires the coordination of domestic and international circulation. Chinese-path modernization is characterized by a massive population. If we are to enable a population of over 1.4 billion to reach the per capita income levels of moderately developed countries, it is clearly impossible to achieve this goal by relying on an export-oriented economy. This is because no other economy in the world can provide a consumer market of such scale or continually sustain such a massive trade deficit. The 2008 international financial crisis was the turning point of economic globalization, marking the fact that a global economic circulation structure characterized by trade imbalances was unsustainable. Since some developed nations cannot maintain and continually expand trade deficits over the long term, trade rebalancing inevitably requires a profound adjustment of the global economic circulation structure. China must follow this trend and reshape the relationship within the "dual circulation." Specifically, Chinese-path modernization requires China to adjust its national economic circulation structure, shifting from the previous "both ends abroad" [12] model (of markets and resources) to a model dominated by domestic demand and internal recyclability. Of course, the "new development stage" is by no means a closed-loop operation behind closed doors; rather, it is about promoting better connectivity between domestic and international circulation on the basis of persisting in high-level self-reliance and self-strengthening. The key lies in coordinating the supply system and demand structure to ensure the smooth flow of the national economic circulation. As pointed out in the "Recommendations" [13]: "The more severe and complex the external environment becomes, the more we must accelerate the construction of a new development pattern and firmly grasp the initiative of development. For the current and future period, we must persist in strengthening the domestic great circulation, accelerate the formation of a robust domestic economic circulation system, and use the stability of domestic circulation to hedge against the uncertainties of international circulation."
Constructing a modern economic system requires balancing "investment in things" and "investment in people." Investment in things refers to investment in physical assets such as machinery, equipment, workshops, residential housing, and infrastructure, which helps strengthen society's productive and supply capacities. For a long time, investment in things has driven China's industrialization and urbanization processes, consolidating the foundation of our productive forces. It can be said that without investment in things, China could not have possessed a complete industrial system or achieved sustained and stable economic growth. Currently, a gap still exists between China's per capita capital stock and that of developed countries, which means there is still vast space for investment in things. Particularly with directions such as intelligence, greening, and integration, there is significant growth potential for physical asset investment in fields like fixed asset renewal in industry, household durable goods renewal, urban renewal, and modern infrastructure construction.
Investment in people refers to investment in the entire life cycle of the whole population—including childbirth, childcare, education, health, and elderly care—which helps improve human quality and capability. If investment in things is primarily an investment in the production process, then investment in people is more an investment in the process of the reproduction of labor power. Both the production process and the reproduction process of labor power are indispensable components of the social reproduction process. Investment in things promotes the development of productive forces by accumulating and upgrading the means of production. Investment in people, by enhancing the quality and skills of laborers, not only promotes the development of productive forces but also improves people's quality of life, thereby facilitating well-rounded human development. Especially in periods when the rate of return on physical asset investment declines, increasing investment in fields such as childbirth and childcare, education and training, medical health, culture and sports, and elderly care services helps support Chinese-path modernization through high-quality population development. Therefore, constructing a modern economic system requires investing not only in things but also in people. Only by balancing the production process of things with the reproduction process of labor power, and coordinating the accumulation and upgrading of material means of production with the comprehensive improvement of laborer skills and quality, can high-quality development be systematically advanced.
Constructing a modern economic system requires building a unified and open market system. Strengthening the domestic great circulation necessitates the continued and profound advancement of a "unified national market." General Secretary Xi Jinping noted, "Persist in deepening market-oriented reforms and expanding high-level opening up... to lay a solid institutional foundation for building a high-standard market system, promoting high-quality development, and building a modern economic system." In terms of property rights systems, competition rules, and quality standards, we must promote the unification of basic market institutions; in terms of service logistics, capital flows, and information flows, we must promote the unification of market infrastructure; in terms of investment promotion and law enforcement supervision, we must promote the unification of government behavior and administrative discretion standards; in terms of resource allocation, we must focus on constructing unified national markets for urban and rural construction land, capital, labor, technology, and data. Simultaneously, we must expand opening up both internally and externally, persist in using openness to promote reform, and continually release the dividends of an ultra-large-scale market, assisting market entities in integrating resources, diluting costs, iterating technology, and sustaining innovation.
Improving the market system also requires handling the relationship between vitality and order, accelerating the formation of a market order that is both "dynamic and flexible" [14] and "well-regulated." In terms of stimulating vitality, we must persist in and implement the "Two Unswervinglys" [15], ensuring that all types of market entities use factors of production equally according to the law, participate in market competition fairly, and receive equal legal protection, thereby promoting the complementary advantages and common development of various ownership economies. In terms of guaranteeing order, we must both strengthen fair competition reviews, anti-monopoly, and anti-unfair competition measures, while also highlighting the comprehensive governance of "involutionary" [16] competition. While the market system allocates resources through supply and demand mechanisms, price mechanisms, and competition mechanisms, we must also continuously improve the effectiveness of macroeconomic governance. This involves strengthening the coordination of fiscal and monetary policies, and enhancing cross-cyclical and counter-cyclical adjustments of macro-policies. We must comprehensively employ various policies—industrial, price, employment, consumption, investment, trade, regional, environmental, and regulatory—to promote the transformation and upgrading of the economic structure. Furthermore, we must play a role in deepening reform, scientific and technological innovation, social management, public services, security guarantees, ecological protection, and the regulation of distribution to promote high-quality development and effectively coordinate development and security. Overall, the key to improving the effectiveness of macroeconomic governance lies in persisting in the centralized and unified leadership of the Party on the basis of a goal-oriented approach, and enhancing the consistency of various policy orientations.
Constructing a modern economic system requires establishing a diversified and balanced system of comprehensive opening up. Openness brings progress, while being closed leads to backwardness. In the long run, economic globalization remains the historical trend; therefore, China must grasp the general trend of development, treat the system of opening up as an important component of the modern economic system, and pay more attention to the diversification of economic and trade partners and the balance of international payments. First, we must steadily expand institutional opening up, align with high-standard international economic and trade rules, and—with the service sector as the focus—expand market access and open up more fields. We should expand unilateral opening to the least developed countries, demonstrating the responsibility of a major power. Expand economic and trade...
expanding the “circle of friends,” accelerating the process of regional and bilateral trade and investment agreements, and expanding the network of high-standard free trade zones. In alignment with the joint construction of the Belt and Road Initiative and the opening up of both East and West directions, we must optimize the spatial layout of regional opening and create diverse "highlands" of openness. We must continue to leverage the pioneering and pilot roles of open practical platforms such as Free Trade Test Zones and the Hainan Free Trade Port, and coordinate the layout and construction of major platforms for cooperation in scientific and technological innovation, industrial development, and trade in services. Second, we must accelerate the construction of a strong trade nation, employing a three-pronged approach targeting trade in goods, services, and digital trade. China is already a major trading power in name and fact; in the future, we must cultivate new drivers of foreign trade and promote the optimization and upgrading of trade in goods, focusing on expanding trade in intermediate goods and green trade, while promoting market diversification and the integration of domestic and foreign trade. Compared with major service trade powers represented by the United States, China still has gaps in both quantity and quality. In the future, we must vigorously develop trade in services, improve the negative list management system for cross-border service trade, and raise the standardization level of trade in services. As both a major digital economy and a major trading nation, China should orderly expand openness in the digital field, actively develop digital trade, and support the development of new formats and models such as cross-border e-commerce. Third, we must expand the space for two-way investment cooperation, strengthening high-quality "bringing in" (foreign investment) and high-level "going out" (investment abroad). The key to "bringing in" lies in making China’s super-large market a testing ground, application field, and profit center for global innovation. China must accelerate the construction of a high-standard market system and create a world-class business environment. We must shape new advantages for attracting foreign capital, properly implement "access plus operation," and shorten the negative list for foreign investment access. We must protect the rights and interests of foreign investors in accordance with the law, and encourage and guide foreign-invested enterprises to use more of their profits earned in China for reinvestment. We must improve the service guarantee system for foreign investment and fully implement national treatment. The key to "going out" is to improve the comprehensive overseas service system and promote the formation of an integrated "going abroad" service ecosystem characterized by central-local interaction, regional synergy, resource aggregation, and internal-external connectivity. We should guide the rational and orderly cross-border layout of industrial and supply chains, improve the network of industrial and supply chain partnerships, and promote the integration of trade and investment. Finally, China will also take the initiative to provide more global public goods and, through high-quality joint construction of the Belt and Road, create new platforms for international economic cooperation and continuously expand new space for win-win development.
IV. Adhering to the Supremacy of the People and Forming Relations of Production Compatible with New Quality Productive Forces
The construction of a modern economic system requires the establishment of a distribution system conducive to common prosperity for all people. Common prosperity is an essential requirement of socialism with Chinese characteristics, and Chinese-path modernization must necessarily be a modernization of common prosperity for all. More importantly, common prosperity is not only the result after Chinese-path modernization is realized, but should also be a prerequisite for the gradual realization of Chinese-path modernization. From the perspective of cultivating and developing new quality productive forces, only by solidly promoting common prosperity can we better accommodate advanced productive forces while simultaneously developing them. Specifically, the comprehensive impact brought about by the progress of social productive forces is reflected in several aspects. First, the development of new quality productive forces will change the direction of technological change, leading to an increase in the organic composition of capital [17] and promoting enhanced production efficiency. Just as Marx discussed in the theory of large-scale machine industry, the intelligent production promoted by the deep integration of the digital economy and the real economy also achieves efficiency gains by replacing labor with machines, except that traditional machines will be further replaced by intelligent machines possessing self-sensing and self-decision-making functions. Furthermore, the increase in dead labor [18] input resulting from the application of intelligent machines is far lower than the living labor it replaces, leading to a reduction in the total labor consumption required for the production process and an increase in total labor productivity. Second, the development of new quality productive forces will lead to a decline in the employment absorption capacity of various industries and changes in the social employment structure. If higher output levels can be obtained by consuming less labor, then the development of productive forces must be accompanied by a decrease in the employment absorption capacity of production sectors, which further leads to more employment shifting from production sectors to non-production sectors. In the process of the aforementioned structural adjustment of employment, structural or frictional unemployment is likely to occur due to factors such as person-job skill mismatch and the transmission of employment information. Finally, although the development of new quality productive forces creates conditions for increasing labor remuneration per unit of time, the overall social share of labor remuneration still declines because the required labor and employment are significantly reduced. Because laborers themselves are also consumers, a reduction in the share of labor remuneration is unfavorable for expanding consumption demand. In addition, income disparities within production sectors are relatively small, while internal income disparities in non-production sectors are larger. Consequently, as more laborers move from production to non-production sectors, the income distribution gap will also widen, thereby restricting all laborers from sharing the fruits of the development of social productive forces. Integrating these influences, only by orienting toward common prosperity, promoting high-quality and full employment, and focusing on increasing the share of labor remuneration can we drive the optimization of the demand structure and the expansion of total demand, improve capacity utilization levels, and effectively strengthen the domestic cycle. Only when the national economic cycle is unobstructed can the value of material products produced efficiently be successfully realized, thereby better accommodating the development of advanced productive forces. The key is to ensure that the growth of residents' income is synchronized with economic growth, and the increase in labor remuneration is synchronized with the increase in labor productivity—that is, through income distribution that tilts toward laborers and the continuous expansion of the middle-income group to promote the formation of an economic development model dominated by domestic demand, driven by consumption, and fueled by endogenous growth. To this end, solid strides must be taken toward common prosperity for the entire people.
The construction of a modern economic system requires the establishment of a coordinated and integrated system for urban-rural and regional development. Coordinating new-type urbanization with all-around rural revitalization, promoting integrated urban-rural development, and narrowing the urban-rural gap are important links in solidly promoting common prosperity. Regarding urban areas, we must optimize the modern urban system, promote the coordinated development of various types of cities and towns, and accelerate the integration of city clusters and the connectivity of metropolitan areas. We must persist in putting people first and promote the "citizenization" of the rural migrant population [19]. We must follow a path of intensive urban development, vigorously implement urban renewal, and build modern "people's cities." Regarding rural areas, we must improve the effectiveness of policies that strengthen, benefit, and enrich agriculture, and support agricultural and rural modernization. On the basis of distinguishing between different types of villages—such as those for agglomeration and improvement, urban-rural integration, characteristic protection, or relocation and merger—we must break through the decentralized development model based on individual administrative villages. We should support villages with adjacent locations, linked industries, and similar functions to explore new models of classified, orderly, and zone-based rural revitalization. Promoting coordinated regional development is both an inevitable requirement for narrowing regional gaps and promoting common prosperity, and a major measure for developing new quality productive forces according to local conditions while optimizing the regional economic layout. Specifically, we must strengthen the implementation of the Major Function Zone strategy and refine special functional zones [20]. Currently, China's Major Function Zones include three categories: urbanized areas, primary agricultural product production areas, and key ecological function areas. These three categories of major functional zones promote the optimization of layout and the orderly development of national territory by implementing differentiated constraint mechanisms and support policies. While maintaining the basic stability of the overall pattern of these Major Function Zones, we must further define special functional zones based on strategic considerations such as the development of border regions, the extraction of energy resources, the protection of cultural and natural heritage, and the development of the maritime economy. Furthermore, we must continue to promote major regional development strategies, using the interconnection of cross-regional and cross-basin infrastructure as a foundation, the synergistic linkage of regional innovation and industrial chains in key urban clusters as a path, and the development of cross-regional connected areas as support. This must be guaranteed by innovations in cross-administrative planning coordination, industrial collaboration, and benefit-sharing mechanisms to promote regional linkage development.
The construction of a modern economic system requires the establishment of a high-level socialist market economy. A modern economic system fundamentally requires the optimization of resource allocation. Only by coordinating the relationship between the government and the market and establishing a high-level socialist market economy can we balance the optimization of efficiency with the maximization of benefits. To this end, "China will unswervingly comprehensively deepen reform, accelerate the improvement of the socialist market economy, and build a modern economic system." In particular, while cultivating and developing new quality productive forces, we must form new relations of production to better accommodate them. This requires the "effective market" and the "proactive government" [21] to coordinate and play their roles together. In terms of cultivating and developing new quality productive forces, we must not only allow the market to play its decisive role in resource allocation—guiding high-quality resources to aggregate in fields of scientific, technological, and industrial innovation—but also better leverage the role of the government to achieve breakthroughs in key core technologies through the model of "concentrating resources to accomplish major undertakings." In terms of regulating income distribution to accommodate new quality productive forces, we must leverage the role of the market to encourage laborers to further increase their income based on skills, knowledge, and innovation on top of distribution according to work in the primary distribution. Simultaneously, we must leverage the role of the government in the secondary distribution [22], focusing on the field of people's livelihoods. Guided by the principle of "doing one's best while acting within one's means," we must increase the intensity of protection and improvement, using shared benefits to promote development. Of course, the role of a high-level socialist market economy is not limited to this; it also helps to comprehensively promote high-quality development, thereby constituting an important guarantee for Chinese-path modernization.
Institutional Affiliation: School of Economics, Nankai University Source: Marxist Studies, Issue 1, 2026 Editor: Huihui