Introduction: The highly anticipated Third Plenary Session of the 20th CPC Central Committee was held in Beijing from July 15 to 18. The session reviewed and approved the “Resolution of the Central Committee of the Communist Party of China on Further Deepening Reform Comprehensively to Advance Chinese Modernization” (hereinafter referred to as the “Resolution”). The “Resolution” consists of 15 sections and 60 articles, divided into three major parts, including more than 300 significant reform measures covering various aspects of the economy and society. So, how will these reform measures impact our lives? To analyze and interpret these issues, the “China Talk” program of china.com.cn has specially invited Professor Yu Miaojie, President of Liaoning University and Fellow of the International Economic Association, for an analysis.

Professor Yu Miaojie, President of Liaoning University and Fellow of the International Economic Association, in the interview with China Talk (Photo by Lun Xiaoxuan)

China Talk: Education, technology, and talents are fundamental and strategic supports for Chinese-style modernization, and universities are the central intersection of education, technology, and talents. The “Resolution” also outlines reforms in these areas, proposing to optimize the layout of higher education and advance reforms in universities in a classified manner. As the President of Liaoning University, could you share your understanding of these reform measures?

Yu Miaojie: Alright, let me share my understanding on this topic, though these are just my personal and somewhat preliminary thoughts.

Firstly, the coordinated development of humanities and social sciences with science and engineering disciplines is emphasized in the Third Plenary Session’s “Resolution”. This is indeed very important for our country’s current stage of development.

On one hand, we need to cultivate new types of productive forces, which requires talent across various industries, including strategic emerging industries, interdisciplinary fields, new disciplines, and future disciplines. Such talents are high-end and essential for the country, and we need to nurture them.

On the other hand, it is equally important to ensure the integration of humanities and social sciences with science and engineering. In other words, this may require a shift from the past emphasis on “focusing solely on science and neglecting the humanities”. Historically, during the early stages of industrialization, a country placed great importance on science and engineering talent. There was a saying, “Master math and physics, and you can travel all over China”, and later it was recognized that mastering these subjects could allow you to travel around the world. However, from another perspective, as an economy develops to a certain stage, the significance of humanities, especially social sciences, grows. For example, the overall design of the Third Plenary Session’s “Resolution” is not within the scope of STEM (Science, Technology, Engineering, and Mathematics). It involves high-level, strategic, and macro-level design. Therefore, balancing or paying attention to this aspect is crucial in our future higher education.

You can see that developed countries have high levels of technological development, and they also place a significant emphasis on humanities and social sciences. In fact, we have been stressing this point as well. Therefore, the cultivation and training of philosophical and social science talents are, from a certain perspective, as important as the cultivation of science and engineering talents.

China Talk: We have noticed that the “Resolution” mentions the need to improve the system and mechanisms for advancing new-type urbanization, and it proposes implementing a system that provides basic public services based on registered residence. In your view, what economic and social benefits might this reform measure bring once it is implemented?

Yu Miaojie: We know that to ensure coordinated economic development, we need to effectively manage the relationship between industrialization and urbanization, or more specifically, the relationship between new-type industrialization and new-type urbanization. From a philosophical or logical perspective, there are generally three possibilities when managing this relationship: one is that urbanization progresses faster than industrialization; another is that urbanization lags behind industrialization; and the third is coordinated development.

Let’s first look at the first two scenarios. If one develops too rapidly or if the other lags too far behind, it can be problematic. For example, some countries experience delayed industrialization while urbanization advances excessively, such as South Africa. What are the consequences? Many people move to cities but cannot find jobs, leading to slum living conditions and potential social instability. This is why some countries have poor social security, rooted in deeper issues.

Conversely, if industrialization advances too rapidly while urbanization lags behind, it is also problematic. For instance, in some coastal regions of our eastern part of the country, industrialization progresses relatively quickly, but urbanization is slower. What are the consequences? There is a high demand for labor but insufficient supply, leading to rising wages. As wages increase, corporate profits decrease; and with reduced profits, government tax revenues fall, impacting the overall sustainable economic development. Therefore, coordinated development is ideal, which is why the Third Plenary Session particularly emphasizes balancing new-type urbanization with new-type industrialization.

Where does China currently stand? Is it coordinated development or is one aspect progressing faster? Objectively speaking, we are currently in a stage where new-type industrialization is advancing more rapidly than urbanization, or we could say urbanization is insufficient. This necessitates a combination of strengthening our strengths and addressing our weaknesses, which is why we emphasize new-type urbanization.

Additionally, there is a significant difference between “new-type urbanization” and “new-type cityization”. This distinction reflects whether China aims to create a “large country with small cities” model or a “large country with large cities” model. It is now very clear that we are working towards a “large country with small cities” model. This model does not mean rejecting urbanization, but rather focusing first on developing city clusters. We can see the five major city clusters: the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, Beijing-Tianjin-Hebei, the Chengdu-Chongqing city cluster, and the Central Yangtze River city cluster. Once these city clusters reach a certain stage, we hope they can have an overflow effect from the center to the periphery, promoting urbanization. This is why we place particular emphasis on the county economy.

So, how do we specifically address the county economy now? The Third Plenary Session has pointed us in a direction, which also serves as a solution to the household registration issue. We will no longer determine access to basic public services based on your registered household or ID card, but rather on your place of actual residence.

Professor Yu Miaojie, President of Liaoning University and Fellow of the International Economic Association (Photo by Lun Xiaoxuan)

China Talk: Let’s discuss the reforms in the field of people’s livelihoods. Since these reforms involve everyone’s daily life, they are a major focus of public attention. We have noticed that out of the 60 items in the “Resolution”, five are related to reforms in people’s livelihoods, covering areas such as employment, income, social security, medical and health services, and population services, which are closely connected to our lives. Among these, two topics have garnered significant online discussion: one is the issue of delaying retirement, and the other is the creation of a fertility-friendly society. There is a lot of debate online about these issues, including some misunderstandings and misinterpretations. Could you please share your understanding of these two reform measures?

Yu Miaojie: Certainly, as you mentioned, the “Resolution” addresses people’s livelihoods extensively, reflecting a strong focus on a people-centered approach. Here’s my understanding of the two specific areas:

Regarding the delay in retirement, it is not just a challenge faced by China but a long-term global issue. Population aging is not unique to China; countries like Japan and South Korea have already entered this stage, and even the United States has reached it. Therefore, population aging is a common challenge faced worldwide. With the improvement in living conditions, our average life expectancy continues to rise. In other words, 60 years old is still relatively young for many people. The question then becomes what to do after retirement. This is the primary consideration, which is why the Third Plenary Session placed significant emphasis on the “silver economy”.

My core viewpoint is that we should not see the silver economy solely as a challenge, but rather as an opportunity. We know that, in terms of wealth distribution, middle-aged individuals have the highest income, so by the time people retire at 60, they often have reached the peak of their wealth. What to do then? Many people might choose to travel or engage in various activities, and some might opt to continue their education, which is why elderly education institutions are becoming increasingly popular.

I mention this not because I work at a university, but because it’s a fact. In the future, as universities address the challenges of an aging population and fewer young people, they are setting up institutions for elderly education. These institutions cater to people who are entering their senior years or are over 60, aiming to seek genuine learning pleasure and mental peace, and to reconnect with old friends. The example illustrates that retirement offers endless possibilities for various activities. Thus, the silver economy represents more of an opportunity — such as opportunities for the education and tourism industries, among others. This is the first point.

The second point is about delaying retirement, which I personally consider reasonable. The Third Plenary Session (the "Decision") used two very precise terms — voluntary and flexible. If you are unwilling to delay retirement, no one can force you, and these terms truly capture the essence of delaying retirement. In fact, many people at 60 are still in good health. So, from this perspective, some people are willing to delay their retirement, and some are indeed key contributors in their workplaces. This is a personal choice, and we support it. Therefore, the Third Plenary Session has provided us with a new direction for development.

Moving on from retirement to the issue of fertility, we know that the current population aging is due to declining fertility desires. The decline in fertility desire is a complex issue involving economic and cultural reasons, and it is not unique to China. The question now is how to actively address this issue. It is crucial to reduce the costs associated with childbirth, child-rearing, and education, which are collectively known as the "three-child" costs. For example, providing maternity leave is important, and it should be available not only to women but also to men, creating a more reasonable system. Thus, the Third Plenary Session’s focus on people’s livelihoods is evident in many aspects.

China Talk: So, if we can have well-formulated policies and effective implementation, it is possible to create a fertility-friendly and elderly-friendly society.

Yu Miaojie: Yes, you are right.

China Talk: Finally, the reason why everyone is paying so much attention to the Third Plenary Session is that they hope to gain insights into the future development direction, reform priorities, and policy orientation of China’s economy and society through this important meeting. In recent times, there have been numerous voices pessimistic or skeptical about China’s economy. How has the current Third Plenary Session injected certainty into China’s current and future development?

Yu Miaojie: Yes, we can see that the Third Plenary Session has sounded the charge for us. My personal understanding of the Third Plenary Session can be summarized in three sentences or three key phrases:

Firstly, reform is a perpetual engine; reform is the driving force.

Secondly, openness is the only way forward; openness is the key.

Thirdly, the leadership of the CPC is a fundamental guarantee.

Firstly, if you ask anyone why China’s economy has achieved such rapid success, the answer will be immediate: reform and opening-up, right? We have continuously promoted reform through opening-up, and reform has driven development, creating a virtuous cycle. Reform and opening-up are necessary conditions for China’s economic development, but they are not necessarily sufficient conditions. Why do I say so? In other words, do other countries also have reform and opening-up? Many countries do, but some succeed while others do not.

Secondly, China has been the most successful in implementing reform and opening-up, and we can proudly say that this is evident. We have achieved economic growth, improved livelihoods, and remarkable accomplishments in poverty alleviation. To ensure the success of reform and opening-up, it is essential to have a strong government — both central and local governments must be strong to ensure that policies are implemented comprehensively. Otherwise, no matter how well-designed a policy is, if it is not well implemented, it is of no use. Therefore, as we said, reform is the driving force and openness is the key, but the premise is strong leadership. The leadership of the Party is a crucial guarantee, ensuring that policies are implemented thoroughly and consistently.

As mentioned earlier, the Third Plenary Session has set the direction for China’s development. China’s development is the most certain factor in an uncertain world and can be seen as a stabilizing force amid global turbulence. You can see that the global economy is looking at China, which contributes over 30% to global economic growth. This explains why so many countries pay great attention to China. From this perspective, we can say that the great rejuvenation of the Chinese nation is imminent, its momentum is established, and its prosperity is to be anticipated.

China Talk: Lastly, we would like to thank President Yu for delivering an insightful interpretation today. We hope that through your explanation, the spirit of the Third Plenary Session of the 20th CPC Central Committee, along with these favorable policies and confidence, can be conveyed to everyone.

Yu Miaojie: Thank you!