Innovation key to cultivation of growth drivers

China's commitment to cultivating new quality productive forces through scientific and technological innovation, as reiterated by President Xi Jinping, will help the country gain a competitive edge in strategic emerging fields and tech frontiers, and contribute to global economic growth, said experts and company executives.

Highlighting that fostering new growth drivers has been high on China's development agenda, they called for accelerated efforts to achieve breakthroughs in crucial technologies by investing more in fundamental research, reinforcing the dominant position of enterprises in boosting technological advancements, and intensifying financial support for innovation-oriented tech companies.

First put forward by Xi, who is also general secretary of the Communist Party of China Central Committee, during his inspection tour of Heilongjiang province in September 2023, the term "new quality productive forces" has been highlighted at several high-profile meetings.

New quality productive forces are driven by revolutionary technological breakthroughs, the innovative allocation of production factors, and deep industrial transformation and upgrading, Xi said while presiding over a group study session of the Political Bureau of the CPC Central Committee in January last year.

He pointed out that sci-tech innovation can generate new industries, new models and new growth drivers, which are the core elements of the development of new quality productive forces.

The tone-setting Central Economic Work Conference held in December called for more efforts to make sci-tech innovation drive the development of new quality productive forces and build a modern industrial system.

Huang Hanquan, head of the Chinese Academy of Macroeconomic Research, said, "Developing new quality productive forces is an intrinsic requirement for promoting China's high-quality development and will inject fresh momentum into global economic growth."

Huang said that China has favorable conditions for fostering new quality productive forces, given its ever-increasing innovation capacities, complete industrial systems, ultra-large domestic market, high-caliber talent pool and massive data resources.

To gain an upper hand in a new round of technological revolution and industrial transformation, he stressed that more efforts should be made to bolster sci-tech innovation, especially innovation in cutting-edge and disruptive technologies, and to accelerate the industrial application of innovative achievements, further deepen reforms in technology and education mechanisms, and expand high-level opening-up.

A meeting of the Political Bureau of the CPC Central Committee on July 30, which was presided over by Xi, called for accelerating the cultivation of emerging pillar industries with global competitiveness and promoting the deep integration and development of sci-tech innovation and industrial innovation.

"Sci-tech innovation plays a pivotal role in nurturing new quality productive forces. China has sent a clear signal that it is dedicated to implementing the innovation-driven development strategy and facilitating the in-depth integration of digital technologies with the real economy, in a bid to drive a shift from old growth drivers to new ones," said Luo Zhongwei, a researcher at the Chinese Academy of Social Sciences' Institute of Industrial Economics.

Luo emphasized the need to improve indigenous innovation abilities by stepping up investment in core technologies in key fields to solve bottleneck issues.

Pan Helin, a member of the Expert Committee for Information and Communication Economy, which is part of the Ministry of Industry and Information Technology, said, "The integrated advancements in sci-tech innovation and industrial innovation are crucial for promoting social and economic development, advancing Chinese modernization and cultivating fresh driving forces."

According to Pan, China's focus on nurturing new quality productive forces is conducive to speeding up the establishment of a modern industrial system and enhancing the stability and resilience of industrial and supply chains.

Pan said that in fostering new quality productive forces, different regions of the country should focus on comparative advantages and base their efforts on local conditions, avoiding blind investment in specific fields.

Li Dongsheng, founder and chairman of Chinese consumer electronics maker TCL Technology Group Corp, said, "The development of new quality productive forces requires further stimulating technological innovation, continuously investing in scientific research and talent development, and supporting the intelligent transformation of industries."

Li underscored the need to give full play to the leading role of enterprises in bolstering sci-tech innovation and motivate their innovation vitality.

China's spending on research and development maintained rapid growth last year, thanks to efforts to support technological innovation. Data from the National Bureau of Statistics shows that China's R&D expenditure exceeded 3.6 trillion yuan ($502.3 billion) in 2024, up 8.3 percent year-on-year, ranking second in the world.

In recent years, the country's strength in sci-tech innovation has taken a major leap. According to the World Intellectual Property Organization, China has moved up to 11th place in the rankings of the world's most innovative economies and remains the only middle-income economy in the top 30.

"China is not only a manufacturing powerhouse, but also a global innovation powerhouse driving trends in digitalization, sustainability and high-tech industries," said Denis Depoux, global managing director of market consultancy Roland Berger.

"China has emerged as a strong player in the global R&D landscape, and has made rapid progress in the development of AI technology, becoming one of the global leaders, and the pace will further accelerate," Depoux said.

The country's emphasis on accelerating the development of new quality productive forces will attract more investment by foreign companies to support Chinese companies' transformation, and to bring more technologies to the world's second-largest economy, he added.

Anu Rathninde, president for Asia-Pacific at Johnson Controls, a United States-based smart building solutions provider, said the rise of new quality productive forces signifies a transformative shift in China's economic model, replacing outdated growth drivers with more dynamic ones and establishing the foundation for more sustained and robust economic development in the future.

He said that China is an important part of the company's global business network, and will continue to be a key contributor to global economic growth. "We are confident in the Chinese market and determined to deepen our footprint here," he said.

Chris Lee, senior vice-president and head of Asia-Pacific at Aveva, a United Kingdom-based industrial software developer, said that China has rapidly emerged as a global frontier for industrial innovation, presenting vast development opportunities fueled by the development of new quality productive forces and the country's vibrant digital economy.

The company recently launched its China intelligent innovation center, its first localized R&D center, to deepen its "in China, for China" strategy.

Lee highlighted that China's mature and extensive industrial system and supply chain offer an unparalleled platform for technological innovation, adding that the company will deepen its roots locally and collaborate closely with local partners to empower China's smart manufacturing and industrial digitalization.