A cargo ship loaded with containers berths at a port in Lianyungang, in eastern China's Jiangsu province on August 7, 2024. - China's exports grew slightly slower than expected in July while imports surged, official figures showed on August 7, as the world's second-largest economy charts an uneven recovery. Picture: AFP
By David Monyae
The phrase ‘New Quality Productive Forces’ dominates China’s political and economic discourse of late. It is the new buzzword.
First introduced by the Chinese President Xi Jinping in September 2023 during his tour of China’s Heilongjiang province, ‘new productive forces’ signify China’s departure, already under way, from the traditional growth model that relies on heavy industry and the sheer size of cheap labour which drove the country’s economic growth for the past four decades, to a new model centred on innovation, research and development, and the production of advanced technology.
This is not the first technology-driven economic policy adopted by the Communist Party of China (spell this acronym) since assuming power in 1949. Indeed, it is only the latest in a long list of technology-centred economic strategies such as the Great Leap Forward of the late 1950s, the Four Modernisations of the 1970s, the 2005 Medium- and Long-Term Plan for Since and Technology, the Strategic Emerging Industries of 2010 and the 2015 Made In China policy.
All these policies focused on acquiring and incorporation of latest technologies through trade and foreign direct investment to drive China’s manufacturing sector. Most of these technologies came from the West which locked China into a dependency and made it vulnerable to the hazards of recent US technology export bans.
Nonetheless, these strategies were remarkably successful as they propelled China into a global economic powerhouse at a pace and scale that was unprecedented.
For example, the Made in China policy, which focused on improving China’s capacity to produce high quality products more efficiently, has seen the country become a world leader in the production of clean energy technologies such as wind turbines, electric vehicles, lithium-ion batteries and solar panels.
China produces about 80 percent of the world’s supply of solar panels and two thirds of electric vehicles and wind turbines. The clean energy sector reportedly added about US$1.6 trillion to the Chinese economy in 2023 accounting for 40 percent of the GDP growth.
The mantra of the new quality productive forces embraces a shift in Chinese thinking about the role of technology in the economy and a modern society more broadly. The appropriation of the Marxist discourse of ‘productive forces’ by which Karl Marx meant factors of production such as labour, capital and land whose harnessing can produce material objects for human use reflects the Chinese leadership’s belief that technology and innovation can be core productive forces.
In addition to technology, another crucial productive force is research and development (R&D) through which the country hopes to produce scientific breakthroughs which will make China a global leader in frontier technologies.
According to China’s Ministry of Science and Technology, the country spent a staggering US$458 billion on R&D in 2023 which makes it the second largest spender on R&D after the US which spent almost US$900 billion. This signals the seriousness of the Chinese government in turning the country’s economy into an innovation and indigenous innovation-based economy which sets standards for new technologies. Developing indigenous tech talent will make China’s technology sector more resilient to geopolitical shifts.
In January, the Chinese Ministry of Industry and Information Technology together with seven other ministries released a paper on promoting innovation and developing future industries.
This future-oriented document sets the strategic direction for future manufacturing, future information, future materials, future energy, future space, and future health. It envisions the establishment of an innovation ecosystem which includes universities, national laboratories and enterprises which are enjoined to collaborate to promote technological breakthroughs in key areas.
It identifies what it calls ‘innovative iconic products’ such as humanoid robots, quantum computers, new display, brain-computer interface, 6G network equipment, advanced and efficient aviation equipment and deep resource exploration and development equipment among others. These innovative iconic products are intended to serve as the motors in the development and growth of new industries to drive the Chinese economy.
The focus on the new industries is already yielding some results. A Chinese quantum expert, Pan Jianwei, reportedly developed a quantum computer that can process AI-related calculations 180 million times faster than the world’s fastest computer.
Moreover, the Chinese ruling party was quick to acknowledge that the new innovation-centred economic strategy will not succeed unless complemented by an efficient and effective national governance and efficient economic management system termed the new national system which is also a new productive force in itself.
While the recent Third Plenum reiterated the leadership of the Party, it also underscored the importance of reforming the party and rid it of corruption and inefficiency. The plenum also proposed new macro-economic governance approaches in the fiscal, financial and regulatory areas.
The jury is still out on the prospects of success of China’s new economic strategy as this is an unchartered territory for the country. However, China’s deep and tested experience in building one of the most modern and advanced economies in the world, if not the best in a few decades, will come in handy as she takes her economy to the next level.
* David Monyae is the Director of the Centre for Africa-China Studies at the University of Johannesburg
** The views expressed in this article are those of the writer and do not necessarily reflect the views of The African