Charting China's innovation path with new quality productive forces

Editor's note: The fourth plenary session of the 20th Communist Party of China (CPC) Central Committee is to be held in Beijing this October, a decision made at a CPC Central Committee Political Bureau meeting on July 30, 2025. CGTN launches the "China's economy: A new chapter unfolds" series. The third article focuses on China's new quality productive forces and its innovation-driven economy. Zhang Chi, a special commentator on current affairs for CGTN, is the deputy director and associate research fellow of the Research Center on Xi Jinping's Economic Thought, Institute of Economics, Chinese Academy of Social Sciences. The article reflects the author's views and not necessarily those of CGTN.

New quality productive forces represent the development direction of advanced productive forces. They embody what is inherently required to achieve high-quality development, and serve as a crucial focus for China's economic transformation and its steady progress toward higher development stages. As China moves into the crucial phase of the 15th Five-Year Plan period, one thatthe plan will consolidate the foundation and making, which makes all-round efforts to basically realize socialist modernization, General Secretary Xi Jinping stressed at a recent symposium in Shanghai on China's economic and social development in the 15th Five-Year Plan period that developing new quality productive forces tailored to local conditions must be elevated to a more prominent strategic position. Maintaining a sustained focus on the development of new quality productive forces will provide a continuous source of momentum for China's economic growth. It will also help clarify the direction for shaping new drivers and advantages in development.

New quality productive forces refer to a new mode of combining production factors and organizing production, shaped by the momentum of a new round of scientific and technological revolution. They signify fundamental changes in various aspects of the production process, including the emergence of new industries and new models of business and development. Guided by the principle of driving development through scientific and technological innovation, China has made the advancement of new quality productive forces a strategic priority. In recent years, these forces have grown rapidly, yielding notable achievements that have captured global attention.

Scientific and technological innovation continues to serve as a powerful engine for development. If innovation-driven development is well advanced, it means a country can take the "bull by the horns" in steering the overall course of economic and social progress. The new wave of scientific and technological revolution, and industrial transformation is entering a period of heightened activity. It is set to bring sweeping changes to global development and the way mankind lives and works. In the Global Innovation Index 2024 released by the World Intellectual Property Organization, China ranked 11th and stood out as the only middle-income economy among the top 30. In recent years, China has made steady breakthroughs in major high-tech fields, with a constant stream of scientific and technological achievements emerging. From the DeepSeek AI large model to the marathon of humanoid robots and from aerospace to autonomous driving, a number of cutting-edge innovations this year have drawn wide attention both domestically and internationally. Together, they reflect the growing momentum behind China's innovation-driven development.

New production factors are being applied extensively. Production factors are the fundamental forces that shape the structure and quality of productive capacity. The use of new production factors can fundamentally propel productivity to a higher level. As a wide array of new factors and methods are integrated into the production process, they are not only reshaping individual production links and organizational structures, but also giving rise to new modes of production, thereby serving as an internal engine driving the emergence of new quality productive forces. China is stepping up efforts to incorporate key elements such as new materials, new energy sources, and data resources into the production process. In particular, data has become a key factor of production in the digital economy era. It now plays an enabling role throughout the entire production chain from foundational systems to end-use applications. At present, the added value of China's core digital economy industries accounts for roughly 10 percent of GDP, a relatively high share even by the standards of developed economies.

New industries grow with strong momentum. Industry is the fundamental carrier through which productive forces take shape and evolve. In particular, strategic emerging industries and future-oriented industries are the best representatives of new industries, and developing them is a key pathway for advancing new quality productive forces. In the first five months of this year, the value-added of high-tech manufacturing enterprises above designated size in China increased by 9.5 percent. From January to May, the business revenue of enterprises above the designated size in strategic emerging service industries grew by nearly 10 percent. Green industries are also gaining strong momentum. The new energy vehicle, lithium battery and solar industries have continued to grow at a rapid pace. Among them, the economic output of the new energy vehicle industry grew by over 30 percent in the first half of the year, while the lithium battery output saw an increase of 53.3 percent. The pace of industrial transformation and upgrading is also accelerating. Supported by China's policy initiatives including "two priorities" (projects designed to implement major national strategies and strengthen security capacity in key areas) and "two initiatives" (equipment upgrades and consumer goods trade-in programs), industries of all types are actively aligning themselves with integration models such as "Internet+," "AI+," and "Digital+." Even traditional industries are beginning to show strong prospects for renewed growth.

Promoting the integration of scientific and technological innovation with industrial innovation, while turning scientific advances into tangible improvements in the quality of productive forces, is a central requirement in the development of new quality productive forces. This calls for sustained focus on innovation, with particular emphasis on achieving high-level self-reliance and greater strength in science and technology. At the same time, it is essential to pursue the development of new quality productive forces based on local conditions. Different regions and industries should explore innovation-driven and high-quality development paths suited to their own circumstances, taking into account factors such as resource endowments, industrial foundations, and development goals.

China remains committed to strengthening its capacity for independent innovation. The new wave of scientific and technological revolution and industrial transformation is accelerating the development of frontier fields such as artificial intelligence, big data, quantum information and biotechnology. It's imperative to seize this major opportunity to fast-track economic and social development. For key technologies that determine the strategic direction of this revolution, it is important that we keep them firmly in our own hands. Overreliance on other countries for technologies critical to the security of industrial and supply chains must be avoided. Focus should be on winning the tough battle over key technologies, targeting breakthroughs in key bottleneck areas such as industrial machine tools, high-end chips, and foundational software and hardware. This is essential to building a secure and reliable industrial system not subject to disruptions and outside interference. National-level research institutes, top research universities, and leading tech companies must take it upon themselves to fulfill their responsibility in achieving higher-level self-reliance, and greater strength in science and technology. They must strive to secure China's initiative in technological development and provide strong scientific and technological support for the country's future development.

China is pushing for more effective integration between the real economy and the digital economy. The real economy is the foundation of China's economic strength. In driving industrial innovation, it is essential to stay rooted in the real economy both by upgrading traditional industries and by opening up new frontiers in strategic emerging and future-oriented industries. Developing new quality productive forces must remain closely tied to the real economy. This means advancing the sophistication of industrial foundations, modernizing industrial chains, and guiding key production factors toward the real economy. The goal is to build a modern industrial system in which emerging and traditional industries progress in parallel, modern services and traditional services complement each other, and digital transformation and industrialization are deeply integrated. To achieve this, the digital economy must be more effectively integrated with the real economy. Information flows should drive more efficient allocation of technology, capital, talent and materials, thus empowering the transformation and upgrading of traditional industries, and fostering the emergence of new industries and business models.

China is fully leveraging the initiative and dynamism of all types of market entities. Enterprises are the central force in driving economic development and in cultivating new quality productive forces. It is important to foster synergy and mutual reinforcement between the public and non-public sectors, and to give full play to the strengths of enterprises under different ownership structures. State-owned enterprises should take the lead in fulfilling strategic responsibilities by ramping up efforts in scientific and technological innovation. They should focus on key functions such as safeguarding national security, guiding industrial development, supporting the broader economy and people's well-being, and delivering public services, thereby helping to move China's industrial system up the global industrial and value chains. Private enterprises, for their part, should draw on their unique strengths, actively seize the opportunities presented by the ongoing scientific and industrial revolutions, and contribute to the accelerated formation of new quality productive forces. By advancing in coordination and working in concert, all types of market players can play a vital role in laying a solid foundation for steady and long-term progress toward Chinese modernization.

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