Innovation and entrepreneurship are two foundational pillars of China's long-range plan to realize the country's great rejuvenation. "Innovation" is the first of the five "New Development Concepts," President Xi Jinping's top-level economic guidelines. It is the first time that innovation has held China's top spot: innovation in science and technology, certainly, but also in services, management, processes, branding and marketing.

China's national goal is to be in the "front ranks" of innovative countries by 2035 and a "global scientific power" by 2050. China is progressing – for example, the number of patents filed by Chinese entities now leads the world (though quality, while improving, still lags).

But now, in light of disrupting international tensions, led by U.S. sanctions and pressures to decouple, China has a laser focus on self-reliance, especially indigenous innovation in science and technology. President Xi has prioritized "pursuing high-level independence in scientific innovation."

Core technologies: artificial intelligence and machine learning, integrated circuit design and manufacturing (semiconductor chips), quantum computing, life sciences and biotechnology, and new materials. Technological applications target the digital economy, 5G, intelligent manufacturing, healthcare, alternative energy and new energy vehicles, and space and sea sciences, among others.

Chinese experts cite three ways how China can build science and technology, independence and self-reliance.

First: increase basic research. Currently, China's basic research accounts for about 6 percent of its total R&D budget, far lower than the 18 percent in the U.S. and 25 percent in France.

Second: upgrade intelligent industry, transitioning from "following" to "parallel running" or even to "leading" in some high-tech fields.

Third: prepare for de-globalization and uncoupling of science and technology; indigenous innovation must alleviate bottlenecks and make up for shortcomings, especially in semiconductor chips.

There are challenges. When government allocates huge funds, resources can be misallocated, causing inefficiencies, waste, distraction, disappointment, even corruption — as in China's semiconductor sector. In response, the government is tightening peer-review procedures and engaging the private sector.

The importance of entrepreneurship in China is highlighted by five numbers. Private business accounts for 50 percent of fiscal revenues; 60 percent of GDP and investment; 70 percent of industrial upgrades and innovation; 80 percent of jobs; and 90 percent of enterprises. 

Entrepreneurship and innovation combine in top-performing small and medium-sized companies that have special products or know-how in strategic sectors.

Bottom line: China's industrial policy is pioneering novel relationships between private business (entrepreneurs) and government to accelerate innovation. The results will play out over five to fifteen years — and become obvious.

President Xi Jinping rightly celebrates the success of China's "targeted poverty alleviation campaign," which by the end of 2020, had brought about 100 million of the intractably poor out of extreme poverty. For China to achieve "The Chinese Dream" of national rejuvenation, eliminating extreme poverty was necessary— but it was not sufficient.  China must continue to reduce still-substantial relative poverty and close the still-excessive wealth gap, primarily between rural and urban areas.

Rural Vitalization exemplifies China's long-range vision to the years 2035 and 2050, when China's goal is to be become a "fully modernized, socialist nation," when standards of living in rural areas should be roughly equal to those in urban areas. By 2035, achieve basic modernization of agriculture with rural areas having roughly equal access to public services. By 2050, rural areas having robust agriculture, beautiful landscapes, and prosperous farmers.

It is a grand vision — but a tall order. Without the vitalization of the countryside, there can be no social stability, no common prosperity, no national rejuvenation.

While grand visions are formulated by central leadership, they must be implemented at the local, grassroots level — and this is especially true of rural vitalization. Overarching principles to achieve rural vitalization are: strengthen the Party's leadership over agriculture, rural areas and farmers; and safeguard national food security and safety.

Specific guidelines include: stabilize supply of key agricultural products; reasonably guarantee the income of farmers; promote research on key agricultural core technologies such as seed sources; and provide preferential tax and fee policies. Moreover, improve rural governance; plan rural social organizations; build grassroots cadre teams; provide dispute resolution mechanisms; and bolster the village-level collective economy. The Party exhorts grassroots officials to go into the fields and farmhouses to listen to the voices of the masses and to understand their needs.

Rural vitalization is a core component of President Xi's political philosophy of Common Prosperity. Common Prosperity is aspirational: a China that is more equal, where disparities in standards of living, wealth and opportunities — especially between urban and rural areas — are reduced substantially.

President Xi's vision is clear: encourage the dynamism and innovation of private business to create incremental wealth, while, at the same time, utilize appropriate powers of government to bring about fair and equitable allocations of that wealth — and thus achieve both full modernization and Common Prosperity.

As China looks to the future and to realizing its great rejuvenation, the driving forces will be, on the one hand, innovation and entrepreneurship, and on the other, rural vitalization and Common Prosperity. The combination makes China's development special. The world is watching.