China's institutional reforms to underpin development of new quality productive forces

BEIJING - China has proposed institutional reforms to foster new quality productive forces in a newly released resolution that experts say will give a forceful boost to innovation.

In the resolution adopted at the third plenary session of the 20th Communist Party of China (CPC) Central Committee last week, China vows to "improve the institutions and mechanisms for fostering new quality productive forces in line with local conditions," proposing policy support for innovation in emerging, future and traditional industries.

Experts believe that the latest proposal is set to propel the development of new quality productive forces, intrinsic demand and a key focus for promoting high-quality development in the country.

Zhang Li, director of the China Center for Information Industry Development, maintains that the reform proposal signals a further strengthening of the institutional safeguards for the development of new quality productive forces.

"The distinctive feature of new quality productive forces is innovation, and innovation in systems and mechanisms is crucial," said Zhang, adding that the proposal aims to promote the innovative allocation of production factors through reforms, unblock various bottlenecks, and accelerate the development of new momentum and advantages.

Dong Yu, executive vice-president of the China Institute for Development Planning at Tsinghua University, echoed his opinion. Dong said that innovative reform measures emphasizing tailoring strategies to suit the specific conditions of different industries are key to developing new quality productive forces.

Emerging, future and traditional industries have their own characteristics, requiring different focuses of related systems and mechanisms, Dong noted. For instance, it is necessary to improve mechanisms that drive industrial innovation with scientific and technological innovation to accelerate the formation of emerging industries.

The incubation and nurturing of future industries require sustainable investment, necessitating the establishment of mechanisms promoting funding increases. Meanwhile, the institutional construction for traditional industries should focus on better-supporting transformation and upgrading, where elevating national standards to guide the changes is crucial, said Dong.

According to Xu Zhaoyuan, a researcher at the Development Research Center of the State Council, new quality productive forces, including strategic emerging industries, future industries, and deeply transformed and upgraded traditional industries, were growing significantly faster than other industries in the first half of this year.

A spokesperson for the National Bureau of Statistics said that facing uncertainties in the external environment, the acceleration of the development of new quality productive forces has formed new support for overall economic growth in the first half of 2024.

Intelligent and green new products such as service robots, new energy vehicles and solar panels have shown remarkable performance, with their production maintaining double-digit growth.

"The accelerated development of new quality productive forces can drive the continuous upgrading of the overall industry toward the medium-high end, lead to an increase in corporate, employee and national income, and expand the scale of domestic demand," Xu said.

This will form "an internal driving force for China's economic growth," Xu added.