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China takes road to innovation-led growth

CHINA DAILY | Updated: 2020-12-25 08:02
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SHI YU/CHINA DAILY

Editor's note: At this year's Central Economic Work Conference that concluded in Beijing on Dec 18, President Xi Jinping presented a guideline on how to rebuild confidence and achieve fast economic recovery in the wake of the pandemic-induced slowdown. Following are the comments of some scholars on the importance of the CEWC:

Focus on innovation and employment

The CEWC highlighted the importance of innovation. While enterprises can better develop if they make innovation their driving force, the government on its part should create a good institutional environment to promote a culture of innovation.

The fact that the government has decided to downplay GDP growth during the 14th Five-Year Plan (2021-25) period shows the importance it attaches to innovation, and indicates it will use both innovation and employment to sharpen China's competitiveness in the global market.

Yi Peng, president of Pangoal Institution

Healthy growth can meet aging society problem

To address the issue of aging society, the government should focus on economic development and expanding the "economic cake". The key to resolving the problem of aging society lies in the development of people's livelihoods and a more equitable distribution of national wealth.

The economic tasks for the coming years reflect the efforts of the authorities to promote healthy, stable and sustainable development, create more wealth, and lay a solid foundation for the country to address the rapidly aging population problem, and overcome the development challenges.

Yuan Xin, a demographer at Nankai University

Making rising demand main driver of growth

The CEWC said the country will make greater efforts to maintain healthy growth instead of setting a specific growth target, which suggests the top authorities have decided to downplay GDP growth and pay more attention to the quality of economic development. That's because despite its better than expected economic recovery, China still faces uncertain internal and external situations and therefore needs to be alert against unforeseen risks in the post-epidemic era.

The term "demand-side reform" was not mentioned at the CEWC, but the fact that the "demand-side management" issue was raised at a high-level political meeting a few days ago means demand-side reform could be on the way in order to make rising domestic demand and consumption, and effective investment the main drivers of economic growth.

Guan Qingyou, president of Rushi Advanced Institute of Finance

Economic forces to deepen reform

The CEWC set the tone of macroeconomic policy for 2021 with the conference communique giving some policy signals. Many international organizations including the International Monetary Fund and the World Bank have forecast that China will be the only major economy in the world to realize positive growth this year.

But because of the impact of the novel coronavirus epidemic, China's GDP will grow by only about 2 percent, the lowest since the launch of reform and opening-up, and thus narrowly miss the target of doubling growth from the 2010 level-at the end of this year China's economy is expected to be 97 percent bigger than in 2010. But since the other major economies are likely to witness negative growth, China's 2 percent growth reflects the strong resilience of the Chinese economy.

The CEWC did not set a specific target for growth for 2021. Instead, it stressed the need for a "new outlook", highlighting the importance of the "dual circulation" development paradigm that the government has adopted. In particular, a recent high-level meeting emphasized the significance of "demand-side management" while stressing the need to deepen supply-side reform. The CEWC emphasized the importance of endogenous economic driving forces for deepening reform and opening-up, while proposing for the first time that China will actively consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

The year 2021 will be crucial for promoting innovation-driven development, as China is expected to clear the technological bottlenecks preventing development. Also, the CEWC for the first time put forward a 10-year action plan for facilitating basic research, among other things, by establishing international and regional innovation centers.

The CEWC put forward many novel ideas of strategic significance, and demonstrated that from now on China's development will progress based on long-term planning, which signifies the transformation of the country's economic development model.

Ma Guangyuan, deputy director of the Central Economic Committee of China National Democratic Construction Association

Conference boosts fight against climate change

The CEWC set eight key tasks, one of which is to ensure China's carbon emissions peak before 2030 and the country achieves carbon neutrality before 2060. China is likely to propose more binding targets and draw up special plans to address climate change during the 14th Five-Year Plan (2021-25) period, and accelerate the process of establishing a national carbon trading market.

In order to achieve carbon neutrality before 2060, China will strive to reduce the percentage of coal in the country's primary energy mix to below 10 percent by 2050. During the 14th Five-Year Plan period, the demand for coal is expected to stabilize, even begin declining, although it will still remain at a high level-about 4 billion tons a year. And China's total coal consumption is likely to fall at a relatively rapid pace during the 15th Five-Year Plan (2026-30) period.

Zhang Zhongxiang, a professor of economics at Tianjin University

Boosting scientific and technological strength

The key tasks the CEWC set for next year include boosting China's strategic scientific and technological strength. China has the experience and will to develop its own technologies, but it should be stressed that there's no conflict between independent development of science and technology and international cooperation in that field.

The ultimate goal of technological development is effective application of technologies to industries. In this context, the contributions of Chinese technologies to the manufacturing of global public good need to be highlighted. In international exchanges, if technology companies focus on becoming bigger and stronger while ignoring other factors except their profits and added value, they are bound to encounter more obstacles.

Zha Daojiong, a professor of international studies at Peking University

City-centric development focus of next plan period

According to the CEWC, the focus of the country's economic work in 2021, the first year of the 14th Five-Year Plan period, will shift to further improving city-centric development.

To facilitate this transition, the government should fully use the advantages of largely containing the pandemic while it rages in most other countries, more vigorously promote reform and innovation, create a better environment for sustainable development and improve the market order. This will promote high-quality and efficient "internal circulation"-as part of the "dual circulation" development pattern-based on scientific and technological innovation, and expanding domestic demand.

Ma Qiji, a member of the Pangoal Institution academic committee

Domestic firms must lead innovation

The CEWC communique mentions "science and technology" 14 times, showing that the top authorities not only attach great importance to scientific and technological innovation but also aim to raise it to a higher strategic level.

As such, domestic enterprises should strive to play a bigger role in innovation while fulfilling their due social responsibilities.

The CEWC also clarified the role of the State, universities and enterprises in scientific and technological innovation, while emphasizing that enterprises should lead the innovation drive.

So, leading enterprises should set up "innovation platforms", and small and medium-sized companies should develop into an important force promoting high-quality development.

Only through scientific and technological innovation can domestic enterprises further sharpen their competitiveness and take on the leading global companies.

Mao Daqing, a member of the Pangoal Institution academic committee

The views don't necessarily represent those of China Daily.

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