Top-level policies to boost new quality productive forces

China's top-level policymakers recently unveiled guidelines on developing new quality productive forces, the first systematic policy document issued since China first put forward the concept of "new quality productive forces" in 2023.

The guidelines set out 19 major development and reform tasks across five areas — vigorously advancing scientific and technological innovation, deepening the integration of sci-tech and industrial innovation, innovating development approaches, advancing innovation in institutions and mechanisms, and further improving mechanisms for talent development — thereby laying out a clear roadmap for accelerating the development of new quality productive forces.

Why has this top-level blueprint for new quality productive forces been issued now? And what are its deeper implications? This top-level blueprint has considerable practical significance for China's future high-quality economic growth, particularly in the following six areas.

First, it provides institutional support for the transition between economic growth drivers.

China's economy is currently at a critical period for the transition from old to new growth drivers. As the traditional growth model led by property and infrastructure investment delivers diminishing returns, new drivers are still being cultivated and expanded, and expectations for sci-tech innovation are particularly high.

Against this backdrop, by simultaneously setting out measures across five dimensions — sci-tech innovation, industrial innovation, innovation in development approaches, innovation in institutions and mechanisms, and innovation in talent development mechanisms — the guidelines are, in essence, building an institutional mechanism that translates strength in sci-tech into industrial and economic strength.

Second, it provides a clear path for upgrading the industrial system as a whole.

The guidelines' parallel approach to traditional, emerging and future industries directly addresses the problem of favoring one area at the expense of another, which sometimes occurs in industrial policymaking.

Nor can China's future high-quality economic development be achieved by abandoning traditional industries to make room for new ones, or by creating bubbles through an indiscriminate rush into emerging sectors.

The guidelines explicitly call for consolidating and strengthening the positions and competitiveness of mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding and construction in the global industrial division of labor, while advancing future industries such as quantum technology, biomanufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence and 6G mobile communications.

Third, it provides institutional safeguards for unleashing businesses' innovative potential.

Measures proposed in the guidelines — including an enterprise research and development reserve fund system, a higher additional tax deduction rate for R&D expenses, elevating enterprise R&D projects that meet national strategic needs to national-level projects through prescribed methods and supporting capable private enterprises in taking the lead in major national technological breakthrough tasks — represent substantial institutional breakthroughs. Their implementation will directly affect the innovation decisions of countless businesses: whether they are willing to increase R&D spending, whether they have the confidence to enter frontier fields or whether they can earn reasonable returns on innovation.

Fourth, it provides an institutional framework for coordinating development and security.

The guidelines make "coordinating development and security" an important part of their overall requirements, and call on the artificial intelligence sector to institute systems for technology monitoring, early risk warning and emergency response protocols. They also explicitly state in the implementation section that development must not shift away from the real economy toward speculative activities, pursue excessively large and all-encompassing projects, or generate bubbles — and must not lead to industrial hollowing-out or gaps in industrial capacity.

This means that the future development of new quality productive forces will consistently uphold minimum security requirements, actively seek to achieve leading positions in frontier fields, and avoid resource waste and systemic risks caused by reckless advances. For local governments and enterprises, this sets clear expectations: developing new quality productive forces is a long-term strategy that requires steady progress under safe and controllable conditions, rather than a campaign-style race.

Fifth, it provides tailored guidance for differentiated local economic development.

One of the most prominent problems in China's efforts to cultivate and develop new quality productive forces in recent years has been the recurring tendency for localities to compete through similar or overlapping industrial strategies.

The guidelines emphasize adapting to local conditions, call for efforts to guide all parties to work scientifically, rationally and in line with actual conditions, and prevent an indiscriminate rush or the formation of bubbles.

The practical significance of this principle is that it recognizes objective differences in resource endowments, industrial foundations and sci-tech capabilities across regions, without requiring every locality to pursue the same frontier sectors.

Eastern regions can take the lead in making breakthroughs in areas such as AI and quantum technology, while central, western and northeastern regions can cultivate growth opportunities by accommodating industries relocating from other regions and transforming and upgrading traditional sectors.

Sixth, it provides institutional channels for open global innovation cooperation.

China's high-quality economic development depends on global resources and markets. The guidelines propose allocating advanced production factors globally, encouraging pilot free trade zones to attract advanced production factors from home and abroad, promoting the joint development of platforms such as sci-tech parks and Belt and Road joint laboratories, and establishing efficient, convenient and secure mechanisms for cross-border data flows.

These arrangements mean that China will develop new quality productive forces by strengthening its capacity for independent innovation through openness and cooperation, rather than pursuing innovation behind closed doors. Against a backdrop of intensifying global competition in sci-tech, this provides institutional channels for China's deeper integration into global innovation networks and its efforts to attract advanced resources from abroad, while contributing Chinese solutions to global sci-tech governance.

The blueprint has been drawn, and the key now is to deliver results. To ensure that new quality productive forces grow stronger and become a solid foundation for China's future high-quality economic development, sustained implementation efforts are needed in the following areas.

China's vast territory encompasses considerable differences in resource endowments, industrial foundations and sci-tech capabilities. The guidelines emphasize developing new quality productive forces in line with local conditions, with the aim of guiding all parties to work scientifically, rationally and in line with actual conditions, and preventing an indiscriminate rush and the formation of bubbles.

Within the overall national framework, localities should determine their development priorities according to their comparative advantages, with eastern regions focusing on breakthroughs in frontier technologies and advanced industries, and central, western and northeastern regions cultivating growth opportunities by accommodating industrial relocation and upgrading industries in which they have distinctive and established strengths, creating a development pattern in which regions have their own characteristics and complement each other's strengths.

"Establishing the new before abolishing the old" is an important guiding approach to developing new quality productive forces. Developing new quality productive forces requires gradually cultivating and strengthening new growth drivers while traditional industries continue to play an important role, thereby achieving a smooth transition between old and new drivers rather than simply starting over. Traditional industries that provide large numbers of jobs, in particular, should be revitalized through transformation and upgrading, avoiding gaps in industrial capacity and employment shocks caused by a rush for quick results.

The writer is a senior research fellow at the Star Atlas Institute of Finance.

The views do not necessarily reflect those of China Daily.