China is expected to push ahead with plans to achieve “new productivity” for 2024 at the next “two-round meeting” starting in early March.
The two sessions, called the annual conferences of the National People’s Congress (NPC) and the National People’s Political Consultative Conference (NPPCC), will open on March 4 and 5, respectively.
Some Chinese economists expect the central government to again set the 2024 gross domestic product (GDP) target at around 5% during both sessions. However, a Reuters poll of 58 economists found that China’s economic growth rate is expected to grow by 4.6% this year and by 2025, given that the country is still suffering from a real estate crisis and a local debt crisis. There is a possibility that it will slow down to 4.5%.
Last September, Communist Party of China (CPC) General Secretary Xi Jinping first floated the idea of building “new productive forces.”
Some US websites translated the program’s name as “new quality productivity” or “quality development,” but state media said this translation did not fully explain China’s plans. said that it could not be done.
Xinhua said the term new productive forces refers to China’s plan to leverage scientific and technological innovation to create new industries and accelerate the country’s economic development.
At a group study session of the Politburo, President Xi said, “New productive forces are freed from the traditional economic growth mode and productivity development path, are characterized by advanced technology, high efficiency, and high quality, and are developed with a new development philosophy.” “It means a high level of productivity in line with the above.” This was announced by the Central Committee of the Communist Party of China on February 1st this year.
He said scientific and technological innovations should be applied to specific industries and industrial chains in a timely manner. He said efforts are needed to transform and upgrade traditional industries, foster emerging industries, prepare future industries, and improve modern industrial systems.
Yu Fengxia, a senior economist at the National Information Center, a think tank affiliated with the National Development and Reform Commission, elaborated on this idea in an article published on the government’s website on February 6.
She says the only way to achieve new productivity is to use China’s “whole-of-nation” efforts to make breakthroughs in core technologies.
He said further investment in advanced technologies should be made to update domestic sectors that produce basic components, materials, software, high-end semiconductors and industrial software, especially industries facing repression from abroad. claims.
He argues that China should develop its own technology companies and research institutes working on artificial intelligence, the next version of the internet (called the “metaverse”), humanoid robots and brain-computer interfaces.
He added that China should leverage AI, Internet of Things (IoT) and big data to improve the competitiveness of its advanced manufacturing sector.
criticize the usa
On Tuesday, several Chinese scholars published papers on new productive forces. Although they did not name the foreign country, all said China came up with this new idea after some developed countries sought to separate from China.
Ma Yuting of Nanjing Forestry University and Ye Zhongsheng of Wuhan University co-authored a paper that argues that China has enjoyed “late-mover advantage” when cooperating with developed countries in the past.
However, once China’s economy reached a certain size, some developed countries tried to curb its growth by “decoupling” and suspending scientific cooperation with China. This is why China needs to acquire new production capacity to enjoy a “first mover advantage,” they say.
Last August, the United States refused to extend the 45-year-old Science and Technology Agreement (STA) with China for another five years. I just extended my STA for 6 months. Nature magazine reported that the US and China will likely delay the renewal of STA, which expires on February 27th.
The United States and its allies have in recent years encouraged their companies to diversify into new investments outside of China.
China’s direct investment debt, a measure of foreign investment inflows, increased by $33 billion last year, according to the latest data released by the State Administration of Foreign Exchange (SAFE). The growth rate was down 82% from 2022 levels, the lowest level since 1993.
In contrast, Vietnam’s foreign direct investment soared to USD 36.6 billion in 2023, an increase of 32% from the previous year.
slowing economic growth
In late January, the provincial people’s congresses had already held their annual meetings and published government work reports.
Of China’s 31 cities, provinces and regions, 17 cities, provinces and regions failed to achieve their 2023 GDP growth target. For example, Heilongjiang Province recorded economic growth of 2.6% last year, well below the 6% growth target.
On January 30, 31 provinces and regions announced growth targets for 2024 ranging from 4.5% to 8%. Of these, only four companies set higher goals than last year, and 16 companies fell short. The remaining 11 companies maintained their growth targets.
Last year, China’s GDP grew by 5.2% compared to the previous year, achieving the target of 5%.
Li Chao, chief economist at Zheshang Securities, said China’s economy could achieve 5% growth this year, given the central government’s continued efforts to expand domestic consumption, improve supply chains and foster new businesses. He said he was deaf.
He said local governments would announce support measures to boost the catering, retail, new energy vehicle, tourism and elderly care sectors. At the national level, he said the central government’s plans to develop the advanced manufacturing sector will be the main theme of the “two sessions”.
Read: Yet another group of U.S. lawmakers heads to Taiwan
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