Tech innovation seen as key to growth

Visitors check out a vertical takeoff and landing drone at the 26th China Beijing International High-tech Expo, July 14, 2024. [Photo/VCG]

China's sharpening focus on deepening reform for fostering new quality productive forces will give strong impetus to the country's economic growth, drive industrial upgrading and offer enormous business opportunities for investors both at home and abroad, said economists, experts and company executives.

Highlighting that sci-tech innovation is a key element in the development of new quality productive forces, they called for more efforts to achieve breakthroughs in crucial technologies by investing more in fundamental research and strategic forward-looking sectors, and step up financial support for innovation-oriented technology enterprises.

Their comments came after the third plenary session of the 20th Central Committee of the Communist Party of China placed great emphasis on improving the institutions and mechanisms for fostering new quality productive forces in line with local conditions.

The resolution adopted by the key high-level meeting called for efforts to improve the systems for promoting full integration between the real economy and the digital economy.

Qu Yongyi, Party secretary of the Chinese Academy of Social Sciences' Institute of Industrial Economics, said that as a new round of technological revolution and industrial transformation is profoundly evolving, bolstering the development of new quality productive forces is of vital significance in promoting high-quality economic growth, advancing new industrialization and realizing Chinese modernization.

"For traditional industries, the injection of new production factors such as data, and the innovative allocation of original factors of production can effectively promote the deep transformation and upgrading of industries," he said.

The country's latest call to nurture new quality productive forces through a series of institutional reforms is conducive to accelerating the building of a modern industrial system and boosting its core competitiveness globally amid external uncertainties, Qu added.

He said the cultivation of strategic emerging industries and future-oriented industries plays a pivotal role in propelling the development of new quality productive forces. These industries mainly include new-generation information technology, artificial intelligence, new energy, new materials, high-end equipment, biomedicine and quantum technology.

He added that more efforts should be made to increase input in core technologies in key fields and solve bottleneck issues that hinder development in areas such as raw materials, critical components, core equipment and basic software, in order to enhance the resilience of industrial and supply chains and gain competitive advantages in the increasingly intense international competition.

Huang Hanquan, head of the Academy of Macroeconomic Research, which is affiliated with the National Development and Reform Commission, stressed the need to accelerate the forming of relations of production that are more compatible with new quality productive forces, with greater focus on deepening reforms in fields such as technology and education to create a favorable environment that encourages innovation, and to attract more high-caliber talents.

Firms' role highlighted

Huang said that more efforts should be made to give full play to the role of enterprises in bolstering sci-tech innovation, expand international cooperation and exchanges in sci-tech, and support foreign enterprises in carrying out technological research and innovative practices in cooperation with Chinese research institutes and companies.

Denis Depoux, global managing director of market consultancy Roland Berger, said the country's emphasis on developing new quality productive forces is all about the transformation of its economy, while foreign companies can play a bigger role in supporting China's transformation in fields such as automation and digitalization of industrial and supply chains.

The move will attract more investment by foreign companies to support Chinese companies' transformation and bring more new technologies to the world's second-largest economy, he added.

Li Daokui, director of Tsinghua University's Academic Center for Chinese Economic Practice and Thinking, told China Daily in an exclusive interview that new quality productive forces refer to a new development model mainly driven by new technologies, which also brings new production relations and new institutional arrangements.

Li called for greater efforts to tackle the choking points that hinder the cultivation of new quality productive forces, saying that more measures are needed to innovate in the financial system to encourage investment in tech companies, encourage cooperation between tech firms and academia, and cultivate more talent with expertise in new quality productive forces.

Justin Yifu Lin, dean of Peking University's Institute of New Structural Economics, said that China needs to further deepen reforms in the financial system so that it can better meet financing demand from economic activities.

"We need to have firm engagement in research and development to innovate new technology and new products. They require capital support," he said, adding that venture capital will be crucial in this regard, considering the high risk of failures in innovation in emerging sectors.

Tapping advantages urged

The economist also said that in fostering new quality productive forces, different regions in the country should focus on their comparative advantages, rather than all rushing to develop new technologies in frontier sectors.

Wang Yiming, vice-chairman of the China Center for International Economic Exchanges and former deputy director of the Development Research Center of the State Council, said that more efforts are needed to create a fairer and more dynamic market environment, innovate ways of allocating production factors and promote the efficient flow and optimized combination of production factors.

It is also important to improve the basic market economic systems such as property rights protection, market access, fair competition and social credit, Wang said during a recent forum organized by Renmin University of China.

Zhou Hongyi, founder and chairman of Chinese internet enterprise 360 Security Group, said that fostering new quality productive forces is to drive a significant boost in productivity through technological innovation, achieve the transformation from old growth drivers to new ones with digital technologies, and promote the upgrading of traditional industries.

As the key meeting has sent a clear message of further deepening reform comprehensively, Zhou said the company will focus on digital security and AI and work to achieve breakthroughs in innovative technologies.

Cui Jingyi, vice-president and general manager of industrial software developer Aveva China, said that new quality productive forces are essentially about promoting high-quality development through sci-tech innovation and industrial upgrading. The company remains committed to contributing to China's digital transformation journey and partnering with local businesses to drive sustainable and inclusive growth, Cui added.

Zhang Jing'an, former secretary-general of the Ministry of Science and Technology, said that looking forward, China needs to ramp up efforts to promote high-quality growth featuring digital, smart and green development, while more steps are needed to support the innovative development of small and medium-sized enterprises.