BEIJING – China’s Vice Premier He Lifeng emphasized the crucial role of a well-coordinated government and an efficient market in developing the country’s “new productive forces,” state media reported on Tuesday.
The concept, introduced by President Xi Jinping last year, focuses on advancing scientific research and technological innovation within China’s vast industrial sector. This approach was recently reaffirmed at a key Communist Party meeting.
“Developing new productive forces is a long-term task and a systematic project. We need both historical patience and a sense of urgency that time and tide wait for no man,” He Lifeng wrote in an article published by the People’s Daily.
He Lifeng underscored the government’s role in establishing strategic layouts and regulations and providing fiscal and tax support to prevent overcapacity and resource wastage due to repeated construction. He also stressed the importance of market mechanisms in driving technological and industrial innovation.
“It is necessary to give full play to the decisive role of the market in resource allocation, strengthen the dominant position of enterprises in scientific and technological innovation, and make all types of enterprises become the main force in the development of new productive forces,” he said.
China’s private sector has faced significant challenges, with private sector investment growing by only 0.1% in the first half of 2024 compared to a 6.8% increase in state-sector investment during the same period.
Despite China’s gross domestic product per capita ranking at the forefront among middle-income countries in 2023, He Lifeng highlighted ongoing issues of unbalanced and inadequate development and a lack of strong scientific and technological innovation capabilities.
“The gap in income distribution is still large, resource and environmental constraints are tightening, and the limitations of traditional productivity and growth models have become increasingly prominent,” he added.
He Lifeng stated that developing “new productive forces” is essential to securing a competitive advantage in development, particularly as the U.S. and other Western countries attempt to suppress China and decouple from it.
“Currently, in the face of fierce competition from major countries, China’s future industrial development faces a situation: if we stop moving forward, we fall back; if we move forward slowly, we fall back too,” he concluded.