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Understand Top Chinese Buzzword: New Quality Productive Forces
2024-04-17 09:41

“New quality productive forces” is a major concept put forward by President Xi Jinping. Marked by innovation, new quality productive forces are advanced productivity in essence, with high quality as the key and substantial increase in total factor productivity as its core hallmark. As a new form of productivity, what is “new” about “new quality productive forces”?

It is “new” because it aims at high-quality development driven by innovation. With innovation playing the leading role, new quality productive forces features high-tech, high efficiency and high quality. This includes:

Fostering emerging industries. Last year, the total output value of China’s biomedicine, artificial intelligence and nanotechnology applications exceeded $55 billion. The scale of China’s low-altitude economy has exceeded 500 billion yuan and is expected to reach 2 trillion yuan in 2030.

Transforming and upgrading traditional industries. China’s “new trio” of industries — electric vehicles, lithium-ion batteries and photovoltaic products — all thrive on transforming traditional sectors, registering an exports volume of over one trillion yuan, a year-on-year increase of nearly 30%.

Developing digital economy. China’s digital economy is among the most vibrant and fast-growing in the world. In 2022, the scale of China’s digital economy accounted for 41.5% of GDP, and its 5G penetration rate surpassed 50% in 2023.

It is “new” because it aims at green development with a vision of harmonious coexistence of human and nature. Green is the color that marks China’s high-quality development. New productive forces are in itself green productive forces. China is deepening its transition toward green and low-carbon growth. Close to half of the world’s installed photovoltaic capacity is in China. Over half of the world’s new energy vehicles run on roads in China. China contributes one-fourth of the increased area of afforestation in the world. China’s cultivating of green infrastructure, green energy, green transportation sectors will generate investment and consumption markets with an estimated size of 10 trillion yuan annually. California plays a leading role in China-U.S. cooperation on addressing climate change. Last November, China and the U.S. held climate change talks in California and issued The Sunnylands Statement on Enhancing Cooperation to Address the Climate Crisis. Last October, California Governor Newsom visited China and signed multiple memorandums on climate change with Chinese partners. Ports of Los Angeles, Long Beach and Shanghai are working together to build the first trans-Pacific green shipping corridor.

It is “new” because it aims at a high-level opening-up with mutually beneficial results. New quality productive forces will not only invigorate China’s high-quality growth but also provide impetus for global sustainable development. Multinational companies have had good rewards in the Chinese market. In the past five years, the return on foreign direct investment in China stands at around nine percent. In 2023, the Chinese government introduced 24 measures to attract foreign investment including expanding market access. In the first two months of 2024, 7,160 foreign-invested enterprises were newly established in China, up 34.9% year-on-year, which is the highest in nearly five years. U.S. companies such as ExxonMobil, Apple and Costco have made additional investments in China. BYD’s US factory is one of the largest electric bus manufacture in North America, creating more than 1,000 jobs for local people and improving their livelihoods.

China is advancing Chinese modernization on all fronts and developing new quality productive forces at a faster pace. This will bring Chinese and foreign investors infinite market opportunities and broad development prospects. As the world’s two largest economies, China and the United States should share a strong sense of responsibility to humanity, to world and to the two peoples, follow the principles of fairness, justice, and non-discrimination, expand two-way opening-up in a mutually-beneficial manner, promote global innovation flow so as to build momentum for global economic recovery and make due contributions to global sustainable development.

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