New Quality Productive Forces Unleash Surging Momentum for Economic Growth

Productive forces are the most fundamental determining force for economic growth. Given the current potential of China's economic development and the international context of global industrial and supply chain restructuring, China not only needs to transform and upgrade traditional industries but also accelerate the cultivation and deployment of emerging industries and future industries. By promoting the transformation of the economic development model, exploring new tracks, creating new models, and developing new industries, we can achieve economic structural transformation, a shift in development drivers, and break free from traditional economic growth paths. General Secretary Xi Jinping, taking into overall consideration the “two overall situations”[1]1 “Two overall situations” (两个大局) refers to the overall situation of the great rejuvenation of the Chinese nation and the overall situation of profound changes unseen in a century., has pointed out the need to seize the enormous development opportunities brought by the Fourth Industrial Revolution and made a major strategic deployment to accelerate the development of new quality productive forces[2]2 “New quality productive forces” (新质生产力) is a term proposed by Xi Jinping emphasizing productivity driven by technological innovation, high efficiency, and high quality.. The 2024 Government Work Report listed “vigorously advancing the construction of a modern industrial system and accelerating the development of new quality productive forces” as the top task. The Third Plenary Session of the 20th Central Committee of the CPC[3]3 The Third Plenary Session of the 20th Central Committee of the CPC (中国共产党第二十届中央委员会第三次全体会议) was held in July 2024, focusing on further comprehensively deepening reform and promoting Chinese-path modernization. proposed “improving the systems and mechanisms for developing new quality productive forces according to local conditions.” Therefore, it is essential to give full play to the leading role of innovation, highlight the development direction of productive forces characterized by high technology, high efficiency, and high quality, and use accelerated development of new quality productive forces to promote high-quality development.

生产力是决定经济增长的最根本的决定性力量。结合我国当前经济发展潜力，以及全球产业链、供应链重塑的国际背景，我国不仅需要对传统产业进行转型升级，也需要加快培育和布局新兴产业和未来产业，通过促进经济发展方式转变，探索新赛道、开创新模式、发展新产业，实现经济结构转型、发展动力转换，摆脱传统经济增长路径。习近平总书记统筹考虑“两个大局”，指出要抓住第四次工业革命带来的巨大发展机遇，并作出加快发展新质生产力的重大战略部署。2024年《政府工作报告》将“大力推进现代化产业体系建设，加快发展新质生产力”列为工作任务之首。党的二十届三中全会提出，要“健全因地制宜发展新质生产力体制机制”。因此，要充分发挥创新的主导作用，突出具有高科技、高效能、高质量特征的生产力发展方向，以加快发展新质生产力推动经济高质量发展。

With a significant increase in total factor productivity as the core hallmark.

以实现全要素生产率的大幅提升为核心标志

New quality productive forces take a significant increase in total factor productivity as their core hallmark. The Third Plenary Session of the 20th Central Committee of the CPC proposed: “Improve relevant rules and policies, accelerate the formation of relations of production more compatible with new quality productive forces, promote the concentration of various advanced production factors toward the development of new quality productive forces, and significantly increase total factor productivity.” Total factor productivity refers to the residual value after deducting the contribution of factors such as labor and capital input quantities to the economic growth rate. It reflects the impact of resource allocation, technological level, production objects, organizational management, worker enthusiasm, economic system, and social factors on production activities. There are two main ways to increase total factor productivity: first, improving production efficiency through technological progress; second, improving resource allocation efficiency through the recombination of production factors, which is mainly manifested in promoting economic growth through intangible factors such as technological progress, institutional optimization, and organizational management improvement, beyond the input of production factors itself. To achieve an increase in total factor productivity, it is necessary to coordinate technological innovation and institutional innovation, drive the formation of new industries, new business formats, and new models, and accelerate the transformation of productive forces.

新质生产力以全要素生产率大幅提升为核心标志。党的二十届三中全会提出：“健全相关规则和政策，加快形成同新质生产力更相适应的生产关系，促进各类先进生产要素向发展新质生产力集聚，大幅提升全要素生产率。”全要素生产率是指经济增长中扣除劳动、资本等要素投入数量等因素对经济增长率的贡献后的余值，反映了资源配置、技术水平、生产对象、组织管理、劳动者积极性、经济制度与社会因素对生产活动的影响。提高全要素生产率的途径主要有两种：一是通过技术进步实现生产效率的提高；二是通过生产要素的重新组合实现资源配置效率的提高，主要表现为在生产要素投入之外，通过技术进步、体制优化、组织管理改善等无形要素推动经济增长。实现全要素生产率提升要统筹技术创新和制度创新，驱动形成新产业新业态新模式，加速生产力变革。

Accelerating the development of new quality productive forces, China has the absolute advantage and huge potential of data as a core factor. Data is not only an important production factor but can also empower and stimulate the role of other factors. For example, based on data, it is possible to promote the economical and efficient use of land, drive technological progress, and improve labor efficiency. Industries such as the digital economy, bred by data, have a booming present and future trend in China. In 2022, the scale of China’s digital economy reached 50.2 trillion yuan, ranking second in the world, with a year-on-year nominal growth of 10.3%, and its proportion of GDP rose to 41.5%. With the widespread application and rapid development of digital industrialization and industrial digitization, especially under the huge driving effect of digital consumption demand, China’s digital economy has developed rapidly. From the data, in 2023, the digital economy accounted for more than 50% of China’s economy, driving rapid economic growth and accelerating the transformation and upgrading of the industrial structure.

加快发展新质生产力，我国有数据核心要素的绝对优势和巨大潜力。数据不仅是一种重要的生产要素，而且可以赋能和激发其他要素发挥作用。例如，基于数据，可以促进土地的节约利用和高效利用，推动技术进步，提升劳动效率。由数据催生的数字经济等产业在我国拥有蓬勃发展的现状和未来趋势。2022年我国数字经济规模达50.2万亿元，总量稳居世界第二，同比名义增长10.3%，占国内生产总值比重提升至41.5%。在数字产业化和产业数字化广泛应用、快速发展，特别是在数字消费需求的巨大拉动作用下，我国数字经济发展迅猛，从数据上看，2023年数字经济在我国经济占比超过50%，带动了经济快速增长和产业结构转型升级提速。

New quality productive forces are advanced productive forces. Any country’s economic structural transformation and upgrading will go through a painful period and is not easily achieved. After nearly 10 years of supply-side structural reform[4]4 Supply-side structural reform (供给侧结构性改革) is a policy introduced in 2015 to reduce excess capacity, deleverage, lower costs, and shore up weak links, aiming to improve the quality of supply., China’s economic growth model has been transformed, and with it, the economic structure is also undergoing transformation, which can be seen from the change in the structure of export products. New quality productive forces have the characteristics of high technology, high efficiency, and high quality, representing new technologies, new industries, new business formats, new models, and new drivers. They cannot arise naturally; they need technological innovation to lead industrial innovation, the transformation of mechanisms and optimization of systems to change the traditional growth model and adapt to a completely new growth model; they require a change in traditional concepts and adaptation to new ideas; they require management innovation, institutional innovation, etc. Accelerating the development of new quality productive forces is precisely about achieving a significant increase in total factor productivity through the improvement of various comprehensive factors, which is also a concrete measure to implement the new development philosophy.

新质生产力是先进生产力。任何国家的经济结构转型升级都会经历阵痛期，并非轻易取得。经过近10年的供给侧结构性改革，我国经济增长方式已经转变，随之经济结构也在进行转型，从出口产品的结构变化就能看出。新质生产力具有高科技、高效能、高质量特征，代表新技术、新产业、新业态、新模式、新动能，无法自然生成，需要通过技术创新引领产业创新，通过转变机制、优化体制改变传统增长方式，适应全新增长方式；需要转变传统的观念，适应新的理念；需要管理创新、制度创新等。加快发展新质生产力正是通过各种综合要素的改进来实现全要素生产率的大幅提升，这也是贯彻新发展理念的具体举措。

New quality productive forces are also green productive forces. In response to the global climate change issue, China has signed the Paris Agreement with over 190 countries, contributing China’s strength to the implementation of green development. In 2019, China committed to no longer adding new coal power projects globally. In terms of bank credit, China resolutely implements a one-vote veto system for environmental protection[5]5 The one-vote veto for environmental protection (环保一票否决制) is a policy where any project that fails environmental standards is rejected.. To promote green development, China supports photovoltaic power generation and wind power generation, with total power generation accounting for about 80% of the global total. The output and export volume of new energy vehicles both rank first in the world and are welcomed by consumers worldwide. Both technological progress and environmental protection are achieving a significant increase in total factor productivity.

新质生产力也是绿色生产力。为应对全球气候变化问题，我国与190多个国家签署了《巴黎协定》，为实施绿色发展贡献中国力量。2019年，我国承诺在全球不再新增煤电项目。在银行信贷方面，我国坚定地实施环保一票否决制。为推进绿色发展，我国支持光伏发电和风力发电，发电总量占到全球约8成。新能源汽车产量和出口量均位列世界第一，受到世界各国消费者的欢迎。无论是技术的进步还是环境的保护，都是在实现全要素生产率的大幅提升。

Taking the transformation and upgrading of traditional industries and the development of emerging industries and future industries as the carrier.

以传统产业改造升级、新兴产业和未来产业发展为载体

Improve the foundation of industries and the level of modernization of industrial chains. “We must firmly advance industrial transformation and upgrading, strengthen independent innovation, develop high-end manufacturing and smart manufacturing, build industrial chains that are strategic and overarching, enhance the resilience of industrial chains, raise the level of industrial chains, and form industrial chains with stronger innovation capacity and higher added value through open cooperation.” Currently, the digital, green, and intelligent transformation and upgrading of traditional industries have become a huge source of growth for China’s economy. Not only do they bring about equipment renewal and transformation, but more crucially, they can improve production efficiency and the level of productive forces. In 2024, China implemented large-scale equipment renewal and upgrading, driving trillions of dollars in investment, boosting bulk commodity consumption and durable goods consumption, effectively promoting the development of new quality productive forces, and thereby boosting China’s high-quality development.

提升产业基础能力和产业链现代化水平。“要坚定推进产业转型升级，加强自主创新，发展高端制造、智能制造，打造具有战略性和全局性的产业链，增强产业链韧性，提升产业链水平，在开放合作中形成更强创新力、更高附加值的产业链。”当前，传统产业的数字化、绿色化、智能化改造升级已成为我国经济发展的巨大增长源，不仅能带来设备的更新改造，更为关键的是可以提高生产效率与生产力水平。2024年我国实施大规模设备更新改造升级，带动数万亿美元的投资，拉动大宗消费和耐用品消费，有效地促进了新质生产力的发展，进而助推我国经济高质量发展。

Develop strategic emerging industries[6]6 Strategic emerging industries (战略性新兴产业) refer to industries that represent the direction of technological revolution and industrial transformation, such as new-generation information technology, biotechnology, new energy, high-end equipment manufacturing, etc. and future industries. “Strategic emerging industries represent the direction of the new round of technological revolution and industrial transformation. They are key fields for cultivating new drivers of development and gaining new competitive advantages in the future, and have a pioneering and pillar role. We must take the cultivation of dominant industries with core competitiveness as the main direction, and develop strategic emerging industries with high technological content, strong market competitiveness, significant driving effect, and good economic benefits.” Although the share of strategic emerging industries and future industries is not yet high, they have fast growth rates and strong driving force. Take intelligent connected vehicles[7]7 Intelligent connected vehicles (智能网联汽车) are vehicles equipped with advanced sensors, controllers, and communication technologies to enable autonomous driving and Internet connectivity. as an example; they are not only substitutes for traditional cars but also a new track for the automotive industry. If traditional cars are hardware devices and means of transportation, then intelligent connected vehicles represented by new energy vehicles are hardware devices plus software. Batteries, motors, power supplies, and computers become the core equipment of new energy vehicles, bringing greater development space for the perception system, execution system, and decision-making system of intelligent connected vehicles. Many local governments in China are also actively focusing on strategic emerging industries and future industries. Taking Beijing as an example, Beijing is currently focusing on cultivating and developing industries and industrial clusters such as new-generation information technology, biotechnology, energy conservation and environmental protection, new materials, new energy, aerospace, high-end equipment manufacturing, etc., which have a good industrial foundation, strong technological capabilities, and high driving effects. It is cultivating new economic growth points, forming new development drivers, and driving and accelerating the development of new quality productive forces. Beijing is not only focusing on the development of high-end automobiles and intelligent connected vehicles in the automotive industry, but also accelerating development in the biomedical field, actively promoting and accelerating the layout of the artificial intelligence industry, promoting the research and development of industrial robots, and accelerating the development of high-tech industries such as integrated circuits and semiconductors. In particular, as an international science and technology innovation center, Beijing has laid out 20 future industries in six major future industrial fields: future information represented by quantum information, future health represented by gene technology, future manufacturing represented by humanoid robots, future energy represented by new energy storage, future materials represented by superconducting materials, and future space represented by satellite networks. It implements eight major actions[8]8 The eight major actions (八大行动) refer to a set of initiatives by Beijing to develop future industries, including actions for innovation, talent, finance, etc. to build an innovation and development ecosystem for future industries.

发展战略性新兴产业和未来产业。“战略性新兴产业代表新一轮科技革命和产业变革的方向，是培育发展新动能、获取未来竞争新优势的关键领域，具有先导性和支柱性。要以培育具有核心竞争力的主导产业为主攻方向，发展科技含量高、市场竞争力强、带动作用大、经济效益好的战略性新兴产业。”尽管目前战略性新兴产业和未来产业占比还不高，但是增速快，拉动力强。以智能网联汽车为例，其不仅是传统汽车的替代品，更是汽车产业的新赛道。如果说传统汽车是硬件设备，是代步工具，那么以新能源汽车为代表的智能网联汽车就是硬件设备+软件。电池、电机、电源、电脑成为新能源汽车的核心设备，为智能网联汽车的感知系统、执行系统、决策系统等带来更大发展空间。我国不少地方政府也在积极聚焦战略性新兴产业和未来产业发展。以北京为例，当前北京正在重点培育和发展产业基础好、技术能力强、带动效应高的新一代信息技术、生物、节能环保、新材料、新能源、航空航天、高端装备制造等产业及其产业集群，培育经济新的增长点，形成发展新动能，并带动和加快发展新质生产力。北京不仅在汽车行业聚焦高端汽车和智能网联汽车的发展，同时也在生物医药领域加快发展，积极推动和加快人工智能产业布局，推动工业机器人的研究和发展，加快集成电路及半导体等高技术产业发展。特别是作为国际科技创新中心，北京在以量子信息为代表的未来信息、以基因技术为代表的未来健康、以类人机器人为代表的未来制造、以新型储能为代表的未来能源、以超导材料为代表的未来材料、以卫星网络为代表的未来空间六大未来产业领域布局20个未来产业，实施八大行动，构建未来产业创新发展生态。

Deepening reforms to release new potential for developing new quality productive forces.

深化改革为发展新质生产力释放新潜能

General Secretary Xi Jinping pointed out: “Supply-side structural reform, in the final analysis, aims to meet demand, with the main direction being to improve supply quality and the fundamental approach being to deepen reform.” The Third Plenary Session of the 20th Central Committee of the CPC proposed: “We must guide reform with the new development philosophy[9]9 The new development philosophy (新发展理念) consists of five concepts: innovation, coordination, green, openness, and sharing., base ourselves on the new stage of development, deepen supply-side structural reform, improve the incentive and constraint mechanisms for promoting high-quality development, and shape new drivers and new advantages for development.” Comprehensively deepening reform is precisely the necessary path to accelerate the development of new quality productive forces, achieve high-quality development, and realize Chinese-path modernization[10]10 Chinese-path modernization (中国式现代化) is a concept of modernization that is common to all countries but is more in line with China’s national conditions, emphasizing people-centered development, common prosperity, material and cultural-ethical advancement, harmony between humanity and nature, and peaceful development..

习近平总书记指出：“供给侧结构性改革，说到底最终目的是满足需求，主攻方向是提高供给质量，根本途径是深化改革。”党的二十届三中全会提出：“必须以新发展理念引领改革，立足新发展阶段，深化供给侧结构性改革，完善推动高质量发展激励约束机制，塑造发展新动能新优势。”全面深化改革正是加快发展新质生产力、实现高质量发展和中国式现代化的必由之路。

Deepening economic system reform releases huge reform dividends. Liberating and developing productive forces is the essential characteristic of socialism and the fundamental requirement of high-quality development. China’s economy still has huge reform dividends to be released, so we must continue to deepen economic system reform. By promoting market-oriented reforms of factors in various fields, including but not limited to establishing a high-standard market system, accelerating the construction of a unified national market[11]11 A unified national market (全国统一大市场) refers to a single market without local protectionism, promoting free flow of goods and factors., we can accelerate the development of new quality productive forces. Accelerating the development of new quality productive forces also helps to accelerate the cultivation and development of the data factor market. China’s advantage of a super-large market will also promote the rapid development of new quality productive forces. In addition, on the path to common prosperity[12]12 Common prosperity (共同富裕) is a goal of socialism with Chinese characteristics to achieve shared wealth among all people., improving the reform of the income distribution mechanism with factor participation will further stimulate growth potential and promote more obvious and substantive progress in common prosperity for all people.

深化经济体制改革释放巨大改革红利。解放和发展生产力是社会主义的本质特征，也是高质量发展的根本要求。我国经济仍然有着巨大的改革红利有待释放，因此要继续深化经济体制改革。通过推进各领域的要素市场化改革，包括但不限于建立高标准市场体系，加快建设全国统一大市场，加速新质生产力发展。而加速新质生产力发展也有助于加快培育发展数据要素市场。我国超大规模的市场优势也将推进新质生产力的快速发展。此外，在共同富裕的道路上，健全要素参与收入分配机制改革也将进一步激发增长潜能，推动全体人民共同富裕取得更为明显的实质性进展。

Deepening the reform of the science and technology system. Science and technology are the foundation of a strong nation, and innovation is the soul of national progress. The typical feature of new quality productive forces is that innovation plays a leading role, and leading industrial innovation with scientific and technological innovation is its basic characteristic. “In 2023, China’s total R&D expenditure reached 3,327.8 billion yuan, with R&D intensity rising to 2.64%,” exceeding the average level of the European Union, and the number of patent applications has ranked first in the world for many consecutive years. Effectively converting patents into productive forces requires not only the cultivation of angel investment and patient capital[13]13 Patient capital (耐心资本) refers to long-term investment that tolerates temporary losses and seeks sustainable returns, often used in innovation and technology sectors., but also deepening the reform of the science and technology system to accelerate the liberation and development of new quality productive forces. It is necessary not only to “optimize the organizational mechanisms for major scientific and technological innovation, coordinate and strengthen the tackling of key core technologies, and promote the systematic, institutionalized, and coordinated development of scientific and technological innovation forces, factor allocation, and talent teams,” strengthen the construction of national strategic scientific and technological forces, and concentrate resources to accomplish major tasks, but also to build a science and technology financial system that is compatible with scientific and technological innovation, strengthen financial support for scientific research and technological transformation, encourage enterprises to increase R&D investment, and promote the transformation of scientific and technological achievements.

深化科技体制改革。科技是国家强盛之基，创新是民族进步之魂。新质生产力的典型特征是创新起主导作用，以科技创新引领产业创新是其基本特征。“2023年，中国全社会研究与试验发展经费投入达到33278亿元，研发经费投入强度提高至2.64%”，超过欧盟的平均水平，专利申请量连续多年位居世界第一位。将专利有效转化为生产力，不仅需要包括天使投资和耐心资本的培育，更需要深化科技体制改革，加快解放和发展新质生产力。既要“优化重大科技创新组织机制，统筹强化关键核心技术攻关，推动科技创新力量、要素配置、人才队伍体系化、建制化、协同化”，加强国家战略科技力量建设，集中力量办大事，也要构建同科技创新相适应的科技金融体制，加强金融对科技研发和技术改造的支持力度，鼓励企业加大研发投入，推动科技成果转化。

Deepening reform of the talent development systems and mechanisms to release talent dividends. Talent resources are the primary resource and the most active and positive factor in innovation activities. The development of new quality productive forces ultimately depends on talent. Only by fully mobilizing the enthusiasm of every worker for innovation and entrepreneurship can we achieve a new leap in new quality productive forces and gain the initiative in development amid fierce international competition. China has over 10 million college graduates every year, more than half of whom are technical talents. Labor market reforms will help accelerate the transformation of the demographic dividend into a talent dividend. It is necessary to actively promote the transfer of labor from low-productivity sectors to high-productivity sectors, strengthen talent training, combine vocational education with vocational training, accumulate human capital, promote the implementation of employment incentive policies, provide high-quality public employment services, strengthen the construction of labor market institutions and the improvement of laws and regulations, and comprehensively balance the interests and risk-bearing of enterprises and workers.

深化人才发展体制机制改革，释放人才红利。人才资源是第一资源，也是创新活动中最为活跃、最为积极的因素。发展新质生产力，归根结底要靠人才。只有充分调动每一位劳动者创新创业的热情，我们才能实现新质生产力新的跃升，在激烈的国际竞争中掌握发展主动权。我国每年大学毕业生超过千万人，其中超过一半是技术人才，劳动力市场改革有助于将人口红利加速演变为人才红利。要积极推动劳动力由低生产率部门向高生产率部门的转移，加强人才培训，将职业教育和职业培训相结合，累积人才资本，推进就业激励政策实施，提供高质量的公共就业服务，加强劳动力市场制度建设和法规完善，综合平衡企业与劳动者的利益与风险承担。

Deepening financial system reform. Actively develop sci-tech finance, green finance, inclusive finance, pension finance, and digital finance, and strengthen high-quality financial services for major strategies, key areas, and weak links. By implementing the deepening of financial system reform, especially increasing the proportion of direct financing and enhancing financial support for scientific and technological innovation and industrial innovation, we can accelerate the development of new quality productive forces, thereby promoting high-quality economic development.

深化金融体制改革。积极发展科技金融、绿色金融、普惠金融、养老金融、数字金融，加强对重大战略、重点领域、薄弱环节的优质金融服务。通过落实深化金融体制改革，特别是提高直接融资比重和提高金融对科技创新和产业创新的支持力度，加速新质生产力的发展，进而促进经济高质量发展。

Deepening the reform of the fiscal and tax systems to release huge development potential. Compared with Western countries, China’s fiscal and tax system reform has huge room for improvement. Not only can the adjustment of the central-local fiscal and tax relations release huge development potential, but the reform of the tax structure will also stimulate enormous development momentum. On the one hand, establish central and local fiscal relations with clear powers and responsibilities, financial coordination, and regional balance, reform the distribution of fiscal powers between the central and local governments, and correspondingly increase local fiscal powers in proportion to the responsibilities for expenditures, thereby promoting the development of new quality productive forces. On the other hand, based on the issuance of 1 trillion yuan of ultra-long-term treasury bonds, use fiscal policy to drive patient capital to support the accelerated development of new quality productive forces.

深化财税体制改革，释放巨大发展潜能。相对于西方国家来看，我国财税体制改革具有巨大空间，不仅央地财税关系的调整能释放巨大发展潜能，税制结构的改革也将激发巨大发展动力。一方面，建立权责清晰、财力协调、区域均衡的中央和地方财政关系，改革中央和地方的财权分配，按照事权的比例相应提高地方财权，促进新质生产力发展。另一方面，以1万亿元超长期国债发行为基础，通过财政政策带动耐心资本来支持加快发展新质生产力。

Online editor: Paul

网络编辑：保罗