BRAIN-COMPUTER interfaces, humanoid robots and artificial intelligence. These terms once occupied the realms of science fiction, but are today regarded by the Chinese government as the most important forces in the drive for sustainable economic development. The term “new productive forces” has recently emerged in the country, and captures the trend.

As the country’s top legislature and political advisory body meet for the Two Sessions, China’s biggest annual political gathering, delegates and members are set to discuss plans to shift future-oriented industries from a focus on quantity to quality.
 
The phrase “new productive forces” was first uttered by Chinese President Xi Jinping in September 2023 when he listed “new energy, new material and hi-tech manufacturing” as key areas to focus on.
 
China’s economy expanded by 5.2 per cent last year, ensuring the country maintains its position as the biggest engine of global economic growth. However, the country remains in a critical period of economic transformation, as the economy faces difficult challenges such as insufficient demand, overcapacity, and weak social expectations.
 
“Establishing the new before abolishing the old” is the central government’s goal for economic development this year. Central to this is the effort to upgrade existing productive forces.

The question is, how? The task is even more pressing, given the way scientific and technological innovation have become key battlefields of international competition.
 
One important area for China is its industrial chain.
 
In terms of manufacturing, the country has more than 200 mature industrial clusters in which upstream and downstream enterprises are better able to collaborate to adapt to the revolution in productivity.
 
From the central government to local authorities, China has sent a strong signal to promote the development of the new productive forces. In turn, the transformation from quantity to quality has already started.
 
Changzhou in Jiangsu province used to rely on the textile and machinery manufacturing industries. After electric vehicle giant Li Auto was introduced in the city in 2016, Changzhou has worked to complete the sector’s upstream and downstream industrial chain.

In 2023, new energy vehicles were among China’s most popular exports. Lithium batteries and photovoltaic products accounted for 4.5 per cent of China’s total export volume, with more than 1 trillion yuan and a year-on-year growth of 29 per cent.
 
Sichuan province has also cultivated a world-class new display industry, based on its expertise in advanced electronics and information. Shanxi province has issued a long-term plan for the development of hydrogen energy, to boost its use in the transport sector.
 
Since 2022, China has built computing centres in the west of the country, to calculate the huge amounts of data generated in the developed eastern regions.

Today, there are 10 major national supercomputing centres nationwide, and the number of 5G stations reached 3.38 million by the end of 2023. As the cost of computing power gradually decreases, AI and other smart applications are stepping ever closer to use in daily life.
 
The key to new productive forces lies in technological progress, which also requires high-quality workers. Despite its ageing population, China’s “demographic dividend” is being transformed into a “talent dividend.”

The average years of schooling for the working-age population in China has increased to more than 11 years, while the total number of R&D personnel in China exceeds 6 million.
 
Moreover, financial support for fundamental research is also increasing. According to the National Bureau of Statistics, the total expenditure on R&D in 2023 was 3.327 billion yuan, an increase of 8.1 per cent over the previous year, accounting for 2.64 per cent of GDP.
 
Different from traditional productivity driven by labour, land and capital, the new productive forces are driven by technology. With large-scale investments in the fields of manufacturing, human resources, computing power and financial support, it’s clear that the new productive forces are expected to become a new driver of economic growth.
 
“China is unlikely to relive Japan’s experiences and enter a period of balance sheet recession, as long as it promotes technological innovation and industrial upgrades, and creates more investment opportunities for enterprises,” said Justin Yifu Lin, Dean of Peking University’s Institute of New Structural Economics.
 
In the near future, it’s not hard to imagine how science and technology will change lives in the most profound ways. From the central government to the private sector’s efforts to achieve technological breakthroughs, China’s determination to promote productivity through science and technology could mark a new period of economic growth and confidence across the globe.
 
Guo Tianqi is a CGTN reporter — www.cgtn.com.