Zheng Yongnian: New Quality Productive Forces and Chinese Modernization
Explore New Path for Modernization
The Xinhua Institute is launching our report “Empower China, Benefit the World—an Analysis of the Theoretical Contribution and Value Orientation of New Quality Productive Forces” in Brussels, Belgium on June 19, 2024.Stay tuned for further updates. In the meantime, here is a speech by Professor Zheng Yongnian on New Quality Productive Forces that we thought might be helpful for our readers to better comprehend the concept of New Quality Productive Forces.
Last month, Professor Zheng, Chairman of the Academic Committee of the Institute of Public Policy at the South China University of Technology, made a keynote speech on the 4th Future Forum entitled, "New Quality Productive Forces and Chinese Modernization." He is also the Chairman at the Guangzhou Institute of the Greater Bay Area, which is a member of the Belt and Road Studies Network. Here is a summary of his speech.
Executive Summary
In this speech, Professor Zheng Yongnian pointed out that on one hand, we must avoid misusing the concept of New Quality Productive Forces, and on the other hand, we should not view cutting-edge technologies as the sole answer to New Quality Productive Forces.
New Quality Productive Forces and Chinese Modernization
"New Quality Productive Forces" is not an academic concept but a strategic one. I believe it should be viewed in the context of "Chinese modernization." The 20th National Congress of the Communist Party of China summarized five characteristics of Chinese modernization. It is the modernization of a huge population, of common prosperity for all, of material and cultural-ethical advancement, of harmony between humanity and nature, and of peaceful development.
Last year’s Central Economic Work Conference stated that "Promoting Chinese modernization must be upheld as the foremost politics." This indicates that promoting Chinese modernization is at the top of the Chinese agenda. The Central Economic Work Conference also proposed measures such as "it is imperative to uphold high-quality development as the unyielding principle of the new era" and "establishing the new before abolishing the old." In other words, the conference reached the conclusion that high-quality development can only be achieved through developing new quality productive forces, and Chinese modernization can only be realized through high-quality development.
There have been various interpretations since the introduction of "New Quality Productive Forces." One extreme interpretation believes that only disruptive technologies count as new quality productive forces. However, disruptive innovations are very rare — there have only been three disruptive innovations in the past 250 years, during the four industrial revolutions.
I believe any economic activity that can increase the added value per unit product can be called New Quality Productive Forces. This is because the most important step for societies to establish developed economic frameworks is to achieve industrial upgrading based on technological progress. In the current wave of the fourth industrial revolution, internet and artificial intelligence are becoming core driving forces. Future modernization must be embedded in internet and artificial intelligence. During this year’s National People’s Congress, President Xi stressed the need to "strengthen basic research and basic research in applied sciences, achieve breakthroughs in core technologies in key fields, and foster new drivers for developing new quality productive forces." Thus, Chinese modernization must achieve breakthroughs in the field of artificial intelligence.
The competition for modernization is becoming increasingly intense worldwide. We generally consider the United States and Europe as fully modernized. However, the U.S. and Europe are now actively entering a new cycle of "re-modernization." For instance, the Biden administration is actively pushing forward its reindustrialization policy through the CHIPS and Science Act, Infrastructure Investment and Jobs Act, Build Back Better Agenda, etc. Additionally, developing countries such as India and Vietnam are also striving for modernization, leading the world into a new wave of modernization.
With regards to internet and artificial intelligence innovations, different countries have developed different models, which I categorize into four types:
1. American Model: The US model is oriented toward development, which I describe as "primitive capitalism 2.0," characterized by rampant capital and a lack or absence of government regulation. Although the US maintains a leading position on the development of internet and artificial intelligence, there is little respective federal regulation, with only a few presidential executive orders. Some even call for the removal of these regulatory in attempts to compete with China, illustrating the development-oriented U.S. model.
2. European Model: The European model tends to be rule guided. Due to the relative backwardness in the field of Internet and artificial intelligence, Europe's development model is defensive, which aims to transform the market into rules. Many Chinese favor the EU model, but in reality, the EU's complex compliance framework and strict regulations limit its competitiveness. This is demonstrated by the fact that no European companies are actively competing with the U.S. companies within the market. Therefore, I believe the EU model does not set a good example, as its rules limit the development of new quality productive forces.
3. Asian Model: The Asian Model can be best described as "comprehensive openness and effective management." This conclusion is reached through my studies of Singapore and Vietnam, where social media platforms can be freely accessed. At the same time, they implement an effective management system. Singapore's management of its internet is particularly outstanding — efficient and without major negative incidents. Vietnam is actively following Singapore's approach, especially after becoming a CPTPP member.
4. Chinese Model: The Chinese model in the AI field emphasizes on regulation and areas such as facial recognition, information collection, and monitoring. This demonstrates a different thought process compared to the U.S., as one focuses on technical development while the other focuses on regulation. In the future, China should focus more on technological innovation by adopting a model similar to that of Singapore and Vietnam, to achieve "comprehensive openness and effective management." I believe China is the qualified to relax regulation because our current regulation is already comprehensive.
There are three main factors when it comes to AI capabilities: computing power, algorithms, and data. Although China is inferior to the US in terms of computing power due to the lack of advanced chips, there is little gap between the two countries in terms of logic chips. Our main challenge right now is the lack of data. Despite China’s large population, which seemingly provides vast amount of data, much of it is wasted due to the lack of openness. This means there is a lack of exchange in data to put it to efficient use.
In addition, there is little integration between data from the public and private sectors. This results in significant wastage of data resources. Although numerous data management bureaus and data exchanges were established, these institutions are more like data warehouses rather than trading platforms, leaving valuable data unutilized.
As such, it is imperative for China to promote effective data flow and integration. I believe, the Guangdong-Hong Kong-Macao Greater Bay Area is a suitable place for New Quality Productive Forces development, as it is the origin of China’s new industrial civilization. From my perspective, the 11 cities in the Greater Bay Area can achieve integrated development by contributing funds to jointly establish a Temasek-like fund and set up coordination mechanisms to allocate resources based on each city’s advantages. Thereby, we can facilitate resource maximization to develop New Quality Productive Forces and achieve Chinese Modernization in the Greater Bay Area.
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