A new energy vehicle assembly workshop Photo: CNSphoto

General Secretary of the CPC Central Committee Xi Jinping’s elaboration on the development of new quality productive forces has formed a systematic theory of productive forces marked by sci-tech innovation. Developing new quality productive forces represents an innovation of the Marxist theory on productive forces and an inevitable requirement for solving the principal contradiction facing Chinese society in the new era, offering fundamental guidance for building a modern industrial system and advancing high-quality economic development. 

Innovating Marxist theory

According to Karl Marx, materials lay the foundation for human social life, and the advancement of productive forces alongside these forces’ contradiction with the relations of production serve as the driving force behind historical progress. Productive forces comprise simple elements of the labor process, including laborers, means of labor, and objects of labor. Moreover, the productiveness of labor should be “determined by various circumstances, amongst others, by the average amount of skill of the workmen, the state of science, and the degree of its practical application, the social organization of production, the extent and capabilities of the means of production, and by physical conditions.”

Marx shed light on the constituents and determinants of productive forces, but he didn’t systematically examine interrelations between the factors as well as their development and evolution. The systematic philosophy proposed by General Secretary Xi Jinping on developing new quality productive forces innovates the Marxist exposition of productive forces in three ways. 

First, the theory of new quality productive forces profoundly reveals the leading role of technological innovation. As General Secretary Xi Jinping pointed out, scientific and technological innovation, or revolutionary technological breakthroughs, is the core element for developing new quality productive forces. Only sci-tech innovation can foster higher-caliber labor forces, means of production featuring more advanced technologies, and objects of labor within a wider scope, considerably upgrading the three elements and improving their optimal combination. This further emphasizes “the state of science and the degree of its practical application” as noted by Marx. 

Second, with sci-tech innovation at the core, General Secretary Xi Jinping’s theory gives new meaning to other components of productive forces. Sci-tech innovation shapes new labor forces, fueling the innovative development of “the average amount of skill of the workmen.” Capitalists develop productive forces to appropriate surplus value, and laborers are considered productive forces like natural forces. Developing new quality productive forces will generate more creative laborers by prompting reforms to the relations of production, while the formation of new relations of production entails a positive cycle among education, technology, and talent. Educational reforms can cultivate innovative talent typical of the new era to consolidate and strengthen the subjectivity of laborers, enabling their well-rounded development in the socialist production relations.

Moreover, sci-tech innovation leads to new modes of production, optimizing and advancing “the social organization of production” and innovatively allocating production factors. Also sci-tech innovation develops new means of consumption and production and substantively improves “the extent and capabilities of the means of production,” thereby giving rise to new industries, new models, and new growth drivers. In addition, sci-tech innovation creates new “physical conditions.” New quality productive forces are committed to green production and will promote harmony between humanity and nature. 

Third, the development of new quality productive forces not only stresses boosting leading enterprises’ productivity, but also values in-depth industrial transformation. Forward and backward linkages formed by enterprises during the economic circulation constitute industries and industrial systems, and a radical change in the mode of production in one sphere of industry involves a similar change in other spheres. This means enterprises’ sci-tech innovation will advance new industries while transforming traditional sectors, quickening the formation of a modern industrial system by optimizing and upgrading industrial and supply chains. 

Promoting social development 

Productive forces change constantly and develop in stages. As Marx stated, “the economic forms in which man produces, consumes, and exchanges are transitory and historical.” Productive forces vary across social development stages. These forces also dictate changes in the principal contradiction facing society in each social development stage, and in turn, the changes drive the historical evolution of productive forces. Shifts in the main social contradiction foster new productive forces, thereafter altering corresponding economic relations and promoting socioeconomic development. 

Developing new quality productive forces is the inevitable requirement for addressing the principal contradiction facing Chinese society. Since reform and opening up, the CPC has consistently emphasized that the fundamental pathway to resolve the principal social contradiction in the initial stage of socialism is to keep emancipating and developing productive forces. 

As socialism with Chinese characteristics has entered a new era, the main social contradiction has evolved into one between the people’s growing needs for a better life and unbalanced and inadequate development. From the economic “new normal” and “supply-side structural reform” to “promoting high-quality development” and “creating a new development pattern,” on to “building a modern economic system and building a modern socialist country,” these new development concepts and strategies were, in the final analysis, put forward to solve the main social contradiction in the new era. 

General Secretary Xi Jinping noted that though factors hampering economic development lie in both the demand side and the supply side, the supply side is principal. This indicates that the standardized supply system has been incompatible with the individualized, diversified demand structure. The strategy to develop new quality productive forces further highlights the crux in the supply side. Only by holistically upgrading the productive force system marked by sci-tech innovation can unbalanced and inadequate development be effectively rectified, and can the supply system’s inadequacy to adapt to the changing demand structure be resolved. 

Powering high-quality development

The economy grows in an upward spiral. When quantity reaches a certain stage, the focus should be shifted to the improvement of quality. The strategy of high-quality development was proposed in accordance with economic development laws, with a view to balance domestic and international imperatives and solve the main social contradiction in the new era. Prioritized for the sake of building China into a modern socialist country in all respects, high-quality development is and will be the essential requirement for charting the course of growth, formulating economic policies, and implementing macro control for the time being and a period to come. 

Since the form of productive forces determines economic developments in a certain social stage, high-quality development requires productive forces of an advanced quality that align with the new development philosophy. Developing new quality productive forces aims to provide robust momentum for high-quality development, to be more specific, to integrate industrial innovation, technological and organizational innovation, and the resultant new industrial system, in an effort to craft practical solutions for spurring high-quality development. 

In terms of product innovation, actively fostering emerging industries and future-oriented industries and continuously meeting the people’s needs for a better life are conducive to expanding effective demand. As Chinese residents’ income levels rise, the consumption pattern has changed remarkably. The “herd effect” in consumption has weakened, while individualized, diversified consumption has caught on, underscoring the growing importance of ensuring product quality and safety and galvanizing demand through innovative supply. 

To tackle new changes in consumer demand, emerging industries and future-oriented industries, represented by new energy, new materials, advanced manufacturing, commercial aerospace, low-altitude economy, quantum technology, and life sciences, are thriving in China. The accelerated development of these industries will help expand effective demand and overcome obstacles and bottlenecks impeding China’s domestic economic circulation. 

From the perspective of technological and organizational innovation, revolutionary technological breakthroughs and the innovative allocation of production factors have reformed enterprises’ production modes and contributed to a benign cycle of high-level supply and demand. Aside from increasing effective demand through developing emerging industries and future-oriented industries, it is likewise necessary to transform traditional industries by technological and organizational means in order to steadily construct an independent, controllable, and high-quality supply system. 

Currently, some core technologies in key fields still face “stranglehold” problems, and the supply of mid- and high-end products has hit bottlenecks. This underlines the need to focus on national strategic imperatives to organically leverage the roles of the government, the market, and society, thus expediting breakthroughs in core technologies in key fields under the new system for mobilizing resources nationwide. 

In the meantime, large-scale production makes it difficult to realize flexible production with low costs, small quantities, and diverse product types, hence the failure to adapt to upgrading consumer demands. It is therefore crucial to revolutionize the industrial model of manufacturing and corporate forms, in order to make the modes of production and organization more network-oriented and intelligent, and enhance enterprises’ innovative capacity, ability to capture demand, brand influence, core competitiveness, and product service quality.

With regard to industrial system innovation, while restructuring organizations to cope with evolving social demands and technological revolutions, enterprises have formed extensive social networks amid the cycle and turnover of purchases, production, and sales, which facilitates the building of an open organizational ecosystem driven by digital technologies. 

As such, these enterprises should expedite the development of digitalized, network-oriented, and intelligent manufacturing based on product, technological, and organization innovation, and reconstruct the workflow of traditional industries in multiple dimensions and throughout the whole chain, to construct an interlinked, dynamic, and integrated multi-level ecosystem. 

During the development of emerging industries and future-oriented industries to expand effective demand, efforts are needed to promote the efficient flow of various resource factors and accelerate the integration of different market entities, helping the market entities reconstruct their organizational models. 

Leading and core enterprises, and specialized and new small and medium-sized enterprises should form supply alliances to consolidate the front-runner position of advantaged industries and incorporate partnering enterprises into the ecosystem through digital technologies, so that these partners can rapidly start large-scale production according to demand information on Internet of Things platforms. 

As a result, different sectors of social production will establish dynamically cooperative technological and economic connections. Productivity improvement due to technological innovation will be transmitted to all fields of commodity production, ultimately shaping an efficient and unblocked modern industrial system in which all industries are linked orderly.  

The establishment of the modern industrial system signifies deepening labor division among enterprises, and enhanced organizational efficiency within these enterprises. This can directly boost corporate profits at different levels and raise laborers’ income levels, thereby increasing government tax revenues. 

Corporate profits and government tax revenues will be re-translated into productivity through investments, and laborers’ income will turn into effective demand through consumption. Eventually, a sound cycle of high-level supply and demand will be in place across society. In this cycle, products are marketable, investments pay off, enterprises make profits, employees earn a decent income, and the government reaps tax revenues. 

Xie Fusheng is a professor of economics at Renmin University of China. 

Edited by CHEN MIRONG