What's so new about China's 'new productive forces'?

I'm Robert Lawrence Kuhn and here's what I'm watching: China's economy, top of mind, internationally and domestically, in the run-up to the 2024 Two Sessions annual political meeting. The new guiding phrase is "new productive forces," which now headlines economic directives at central and local governments as China pivots to a growth model that prizes quality over quantity.

How do "new productive forces" fit into the nested concepts that frame China's economic future? The grand goal is the "great rejuvenation of the Chinese nation," which is achieved by "Chinese modernization," which is energized by "high-quality development," which is promoted by "new productive forces."

Here's how President Xi Jinping explains it: "Developing new productive forces is an intrinsic requirement and an important focus of promoting high-quality development, and it's necessary to continue to well leverage innovation to speed up the development of new productive forces." With innovation as the essential driver, Xi stresses that new productive forces mean advanced productivity freed from traditional economic growth models. It features high technology, high efficiency and high quality, and it aligns with the country's new development philosophy.

These initiatives are underway. The share of strategic emerging industries, such as new energy, high-end equipment and biotechnology in China's GDP rose to over 13 percent in 2022 from 7.6 percent in 2014, with the 2025 target over 17 percent. Such a rise of new productive forces is said to signal a transformative shift in China's economic landscape, replacing antiquated growth drivers with more dynamic ones, thus enabling sustained economic development.

Implementing new productive forces requires continuous breakthroughs in science and technology, which introduce disruptive technologies, fuel emerging industries, enhance industrial chains and expedite the green transition - all empowered by intelligent information. Equally important is deepening reform, especially modernizing sci-tech management and removing bottlenecks.

Accelerating new productive forces depends on a vigorous private sector, which always in all countries generates most innovations, but which, in recent years in China, has been affected by adverse conditions such as the impact of the pandemic, certain regulations and the complex external environment. Now, the National People's Congress, the Ministry of Justice and the National Development and Reform Commission are jointly discussing a law for the promotion of the private sector, which would ensure equality with state-owned companies regarding access to financing, resources and government contracts.

There are challenges: lingering post-Covid public uncertainty, huge local debt, volatile stock market, youth unemployment, a shrinking and aging population and international tensions.

The world awaits China's answer. A plan is coming.

I'm keeping watch. I'm Robert Lawrence Kuhn.

Script and Presenter: Robert Lawrence Kuhn

Producer: Yang Yutong

Video Editor: Hao Xinxin

Graphic Designer: Qi Haiming

Executive Producer: Sun Lan

Chief Editors: Ren Yan, Li Shouen

Supervisors: Xiao Jian, Adam Zhu

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