The new media of China News Service, Economic Review, reported an article by Professor Yu Miaojie, a Deputy to the National People's Congress, Fellow of the International Economic Association, Deputy Secretary of the CPC Committee and President of Liaoning University. The original text and the link are as follows:
Yu Miaojie: Promote quality with innovation, and enhance overall factor productivity
Since the beginning of this year, the development of new quality productivity has been emphasized multiple times, and various departments have introduced measures to accelerate this development. However, it is also important to recognize that there are still some misunderstandings about new quality productivity in the market. How can we correctly understand new quality productivity and enhance overall factor productivity?
Understanding new quality productivity scientifically
To scientifically understand new quality productivity, we need to approach it from two perspectives. Firstly, why vigorously develop new quality productivity. Secondly, how to vigorously develop new quality productivity.
Regarding the first question, we are currently facing profound changes in the international environment and daunting tasks of reform and development domestically. Against this backdrop, China's economic growth has shifted from high-speed growth to high-quality development. The previous extensive growth model mainly relied on low-cost basic production factors such as capital, land, labor, and energy. However, rising labor costs, less smooth capital flows due to the rise of anti-globalization forces, and increasing capital costs have made the extensive economic growth model unsustainable. The core of high-quality development lies in intensive growth, which aims to enhance overall factor productivity and thereby achieve an improvement in new quality productivity.
Furthermore, in the new development stage, high-quality development manifests in four aspects: production, circulation, consumption, and distribution, with production being the "linchpin". At the micro level, high-quality development in production aims to enhance product added value, improve product quality, boost overall factor productivity of enterprises, and foster a production system where entire industries coordinate development across the three major sectors. Crucially, the core of advancing new quality productivity lies in enhancing overall factor productivity of enterprises. Overall factor productivity refers to the portion of output increase that persists even after controlling inputs such as capital, labor, land, energy, and data, with its enhancement stemming from technological progress. Progress in overall factor productivity equates to technological advancement, which is at the heart of enhancing new quality productivity—ultimately, it hinges on technological progress and innovation.
The core of new quality productivity lies in enhancing overall factor productivity, but its scope extends far beyond this. It also includes shaping new production relations that are compatible with the development of new quality productivity, closely related to nurturing new models and new formats.
As for the second question, how to develop new quality productivity: New quality productivity represents an advanced state of productive forces that aligns with new development concepts. Its essence lies in "new" and "quality". It originates from innovation, with a focus on superior quality. Emphasizing novelty to enhance quality is key to understanding new quality productivity.
Firstly, it must be recognized that innovation is the foremost concept among the Five New Development Ideas, which must be fully and accurately understood and resolutely implemented. Innovation should be understood from two aspects: scientific and technological innovation, and technological advancement. Scientific and technological innovation involves creating something from nothing, "from zero to one", while technological advancement involves deepening application, "from one to N". Scientific and technological innovation can foster new industries, new models, and new momentum, making it a core element in developing new quality productivity. Without "from zero to one", achieving "from one to N" and forming new quality productivity would be impossible. How can innovation play a role in developing new quality productivity?
On one hand, it is necessary to strengthen scientific and technological innovation, particularly original and disruptive scientific and technological innovations, and accelerate achieving high-level scientific and technological self-reliance, focusing on key core technological breakthroughs to cultivate the new momentum of developing new quality productivity. Regarding original innovation, there should be an increase in research and development investment and the proportion of basic research. In 2022, China's basic research funding accounted for 6.57% of R&D expenses, a ratio that should be further increased, reaching 7% or even approaching 10% by the end of the "14th Five-Year Plan" period. On the other hand, there is a need to vigorously develop applied research. Generally, basic research relies mainly on organized collective efforts of research institutions, while application-oriented technological improvements can rely on the intense technological advancements of small enterprises. It is crucial to effectively integrate industry-academia applications, including the phases of blueprint productization and production scaling, to achieve large-scale production of products within the industry. Only through integrating industry-academia applications can the development of new industries, new models, and new momentum be realized, further achieving resonance and synchronous development of scientific and technological original innovation and technological advancement. We should also further eliminate institutional barriers and promote deep integration of industry, academia, and research, integrating innovation chains, industry chains, capital chains, and talent chains to accelerate the transformation of scientific and technological innovation achievements into real productivity.
Secondly, the primary industry carriers for innovation and creation should represent emerging and future industries, such as new materials, aerospace, low-orbit economy, robotics, biomedical devices, new energy vehicles, integrated circuit equipment, artificial intelligence, metaverse, deep-sea development, additive manufacturing, flexible electronics, hydrogen energy storage, cellular therapy, and biological breeding, among others. Simultaneously, efforts should be made on "three major initiatives" to innovate and upgrade products in the raw materials industry, extend the value chain of primary product industries, and achieve "value chain extension." Additionally, utilizing digital economy platforms more effectively is essential. This requires ensuring advanced levels of digital technology and industrializing digital technologies. Only through this transformation from blueprint to product, and then to industry, can digitalization of industries be vigorously developed to create internationally competitive digital industry clusters.
Thirdly, in the process of developing new quality productivity, it is crucial to deeply understand that it is not merely about pursuing GDP growth but achieving harmony between humans and nature. Therefore, there is a need to vigorously develop green productivity, focusing on "developing first and then breaking" strategies, advancing new green industries, integrating wind, solar, nuclear, and storage, and gradually reducing the proportion of traditional energy sources. In practical implementation, accelerating the promotion and application of green innovation and advanced green technologies, such as carbon capture technologies, is essential. Concurrently, establishing green manufacturing industries, such as China's achievements in the new energy vehicle manufacturing industry, is critical. In summary, efforts should focus on accelerating the development of green services, green energy, low-carbon supply chains, and constructing a green circular economic system.
Lastly, effective application of various economic policy tools, integrating macroeconomic, monetary, industrial, energy, and livelihood policies, is necessary. Employing a macro and integrated approach to promote the better cultivation and development of new quality productivity is essential.
Cultivating new quality productivity to enhance supply-demand compatibility
The development of new quality productivity through technological innovation strengthens the supply of new factors, thereby helping to optimize supply structure, improve supply quality, and enhance the adaptability of the supply system to domestic demand. The report of the 19th National Congress of the Communist Party of China proposed, "Organically combining the implementation of the strategy to expand domestic demand with deepening supply-side structural reform to enhance the endogenous driving force and reliability of the domestic cycle," and "Focusing on improving total factor productivity." The Central Economic Work Conference of 2023 reiterated the necessity to adhere to deepening supply-side structural reform and focus on expanding effective demand in a coordinated manner, leveraging the advantages of a super-large-scale market and robust production capacity to establish the domestic cycle based on the initiative of domestic demand, and to enhance the quality and level of the international cycle. I believe that a crucial aspect of supply-side structural reform is cultivating new quality productivity, which is of paramount importance. Only by nurturing new quality productivity can our competitive advantages be fully realized, and the overall factor productivity of enterprises be better demonstrated. This approach enables us to rely on innovation-driven growth, address supply-side deficiencies, continuously create new supplies, enhance our capability to meet new market demands, and thereby achieve a higher level of dynamic balance between demand-driven supply and supply-generated demand.
The important content of supply-side structural reform includes four aspects: supply, demand, circulation, and distribution. If we elaborate a little more, high-quality development on the supply side includes enhancing product value-added, improving product quality, and boosting the total factor productivity of enterprises. We hope to see a good trend of industrial agglomeration, build a complete system of the entire industry chain, and more importantly, we hope to see coordinated and unified development of the three major industries. This represents high-quality development on the supply side.
High-quality development on the demand side means that we hope products can meet various needs of the people, forming personalized and diversified demands. From the perspective of circulation, to achieve high-quality development, we need to accelerate the construction of a unified domestic market, reduce logistics costs, including smooth logistics, and reduce various implicit and explicit costs. In terms of high-quality development in distribution, we hope to distribute according to factors.
By vigorously developing new quality productivity centered around new manufacturing, new services, and new business formats, strengthening the supply of new factors, and promoting supply-side structural reform, China aims to foster new consumption patterns such as digital, green, and health-oriented consumption. This effort also focuses on new investments in infrastructure and new exports such as intermediate goods trade, service trade, and digital trade, to stimulate demand.
Moreover, region-specific development of new quality productivity is particularly crucial. Taking Liaoning Province as an example, initiatives like the "Three Major Articles" strategy to drive industrial transformation and upgrading underscore the importance of new quality productivity. Liaoning needs to leverage its comparative advantages, focusing on the transformation and upgrading of traditional industries like time-honored brands and expanding the value chain of original brands, pivotal in the development of new quality productivity. For instance, in the realm of new energy vehicles, Shenyang should concentrate on research into endurance capabilities under extreme cold conditions to capitalize on its geographical advantages. Shenyang's digitization and intelligent development should revolve around revitalizing time-honored brands, promoting new brands, and enhancing original brands, especially crucial breakthroughs in lithium battery technology, which will significantly propel the development of new quality productivity.
Link to the original article: https://www.jwview.com/jingwei/html/07-07/599217.shtml
