Justin Yifu Lin: How to fully unleash new quality productivity?
2024-07-18
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How to prevent a sudden rush and bubble formation? The most important thing is to seek truth from facts and make layouts in accordance with the comparative advantages determined by the existing industrial foundation, capital, human capital and natural resources.
We need to explore the distribution system, which also involves innovative arrangements in the financial system. The financial needs of traditional industries and emerging industriesDifferent industry
Text | "Finance" reporter Zou Biying
Editor | Wang Yanchun
In June, Yanyuan is full of green grass and singing birds. The Institute of New Structural Economics is located in the quaint Langrun Garden of Peking University, and Mr. Lin Yifu's office is deep in the courtyard. For Mr. Lin Yifu, it was a busy afternoon. Just after the opening meeting of the "Strategic Emerging Industry Integration Cluster Development Project" in Wanzhong Building, Mr. Lin Yifu hurried to accept an interview with Caijing. Recently, the book "New Quality Productivity: The Focus and Inner Logic of China's Innovation and Development" co-authored by Lin Yifu and other scholars was published. The book emphasizes that the full development of new quality productivity has become an important driving force for promoting the high-quality development of China's social economy.As the dean of the Institute of New Structural Economics, the Institute of South-South Cooperation and Development, the honorary dean of the National School of Development at Peking University, and a foreign member of the British Academy and the Academy of Sciences for the Developing World, Lin Yifu has always focused his academic vision on China's economic development and economic system reform. Guided by Marx's dialectical materialism and historical materialism, he proposed the new structural economics based on the experience of success and failure in the development and transformation of China and other developing countries, advocating that developing countries and regions should seek truth from facts and develop industries with comparative advantages based on their own factor endowments and the reality of their structures, and promote the transformation and upgrading of economic structures and the development of the economy and society under the joint action of "effective markets" and "effective governments".This time, the topic we are talking about is new productivity. Since July last year, Xi Jinping, General Secretary of the CPC Central Committee, President of the State, and Chairman of the Central Military Commission, has proposed to integrate scientific and technological innovation resources, seize the opportunities of a new round of scientific and technological revolution and industrial transformation, lead the development of strategic emerging industries and future industries, and accelerate the formation of new productivity. At the Central Economic Work Conference in mid-December last year, it was proposed to promote industrial innovation with scientific and technological innovation, especially to use disruptive and cutting-edge technologies to give birth to new industries, new models, and new momentum, and develop new productivity. In May this year, General Secretary Xi Jinping published an article in the magazine "Seeking Truth", proposing that the main consideration of new productivity is: productivity is the fundamental driving force for the development of human society and the ultimate cause of all social changes and political changes.Lin Yifu received a master's degree in political economics from Peking University and a doctorate in economics from the University of Chicago. Before returning to China, he did postdoctoral research at the Center for Economic Development at Yale University. He has served as a counselor to the State Council, a full-time vice chairman of the All-China Federation of Industry and Commerce, and a senior vice president and chief economist of the World Bank. He is currently a member of the Standing Committee of the 14th National Committee of the Chinese People's Political Consultative Conference and deputy director of the Economic Committee. As an economist with both international vision and political experience, Lin Yifu pointed out to Caijing that every technological revolution will bring about huge industrial changes. After steam engines, electricity, computers and information technology, we are now entering the fourth industrial revolution. Compared with the original technology and industry, the productivity released by each round of technological revolution and industrial change is "new quality productivity."At present, there are many different opinions about "new quality productivity", and there is a risk of being superficial. However, Lin Yifu clarified that the essence of new quality productivity is the improvement of the level of social productivity brought about by technological revolution and industrial transformation. Compared with the original technology and industry, it must have the characteristics of high technology, high quality and high efficiency. The development of new quality productivity must have emerging industries and future industries as the carriers of technological revolution. However, we cannot ignore material conditions and rush into it, nor can we ignore and abandon traditional industries and develop a model. The essence of new quality productivity is technological revolution. Emerging industries and future industries are its inevitable carriers. However, traditional industries can also become carriers of new quality productivity by adopting revolutionary new technologies to achieve high-end, intelligent and green development. In fact, even the emerging industries and future industries now will become mature and dominant industries by the middle of this century when China builds itself into a socialist modern power. By then, there will probably be new technological revolutions and emerging industries and future industries at that time. The dominant industries at that time will also need new technologies to develop new models and new momentum.The Fourth Industrial Revolution Cannot Be MissedWe have caught up with developed countries in the third industrial revolution, but if we fall behind in the fourth industrial revolution, the gap may widen again.Productivity iteration is the endogenous engine of human development. The new round of scientific and technological revolution and industrial transformation has formed a historic intersection with my country's accelerated transformation of economic development mode. Since General Secretary Xi Jinping first proposed "new quality productivity" in Sichuan in July 2023, "new quality productivity" has become a hot word. What do you think of the basic connotation and strategic significance of new quality productivity?I am very happy to discuss the topic of new productivity with you. Since the Industrial Revolution in the 18th century, the development of human society has indeed been a process of rapid development of science and technology, the continuous emergence of new productivity, and the continuous progress of society. Before the Industrial Revolution in the 18th century, China's development achievements were the world's leading, and mankind was in the agricultural society at that time. Some economic historians have found that the annual per capita GDP (gross domestic product) growth rate of Western European countries was only 0.05% at that time. It would take 1,400 years for per capita GDP and people's material possessions to double. In peacetime, the population growth rate is fast, and food is insufficient, which brings social unrest and wars between countries for living space; after social unrest and war, the population decreases, food becomes abundant, the population growth rate accelerates, and bottlenecks appear again, food shortages, wars, and such a repetitive Malthusian trap. Western society is like this, and the change of dynasties in ancient Chinese society is also related to this.After the Industrial Revolution, which started in Western Europe, science and technology have been changing with each passing day, and economic development has been advancing by leaps and bounds. According to research by economic historians, the growth rate of GDP per capita in Western Europe, North America and other countries that pioneered the Industrial Revolution suddenly jumped 20 times, from only 0.05% per year to 1%. The time it takes for human material possessions to double has been reduced from 1,400 to 70 years, and life expectancy has also been extended. In traditional agricultural society, human life expectancy was less than 35 years old. After the Industrial Revolution, with the increase of material and the improvement of life, life expectancy has gradually increased from 35, 40, 50, and 60 years old to 70 and 80 years old. This is the result of industrial changes and improved productivity brought about by the scientific and technological revolution. At that time, countries in other parts of the world did not seize this opportunity, and a great divergence occurred. my country, like many other countries in Africa, Central and South America, and Asia, became a colony or semi-colony of Western industrialized countries.The first industrial revolution, which began in the 1750s, was represented by the invention and use of steam engines. Then, in the 1870s, the second industrial revolution, represented by electrification, began. Then, in the 1940s and 1950s, the third industrial revolution, represented by computer information technology, began. The time interval between each industrial revolution is shrinking. In the countries that achieved the first industrial revolution, the growth rate of per capita GDP increased 20 times compared with that before the industrial revolution. More than 100 years later, these countries led the second and third industrial revolutions, and the growth rate of per capita GDP doubled to 2%. Each technological revolution has brought new industries and new technological transformation of old industries. We are now entering the fourth industrial revolution represented by big data, artificial intelligence, genetic engineering, and life sciences. Like the previous industrial revolutions, there will be the emergence of emerging industries and future industries and the technological transformation of traditional industries, which will promote the great development of "new quality productivity".What does developing new quality productivity mean for China's economy? What will happen if we miss out on new quality productivity?Seizing the opportunities of the Fourth Industrial Revolution and allowing new quality productivity to continue to emerge is related to the coordination of two major situations.The first big picture is the strategic overall situation of the great rejuvenation of the Chinese nation, which requires my country to build a socialist modern power by the middle of this century. As a modern power, it must be supported by a real economy with a productivity level that is ahead of the world. At that time, the leading industries will be the emerging industries and future industries emerging from the current fourth industrial revolution. my country lagged behind Western developed countries in the first and second industrial revolutions. After 75 years of unremitting efforts since the founding of the People's Republic of China, especially under the guidance of the new development concept and new development pattern after the 18th National Congress of the Communist Party of China, my country has caught up with developed countries in most industries of the third industrial revolution. my country must seize the strategic opportunity of the fourth industrial revolution, in the development of emerging industries and future industries, my country and developed countries stand on the same starting line, and become a leading country in these industries, so that the new China can become a socialist modern power by the 100th anniversary of its founding in 2049, and achieve the strategic overall goal of the great rejuvenation of the Chinese nation. The second big picture is that my country is facing all kinds of stormy and even turbulent tests brought about by the accelerated evolution of the world's unprecedented great changes in a century, and various external pressures are accelerating at any time. Although China has been a world leader in many industries such as steel, shipbuilding, computers, and information technology before the Fourth Industrial Revolution, lithography machines and basic chips are relatively backward and face "decoupling and chain breaking", threatening the development of some emerging industries and future industries in my country in the Fourth Industrial Revolution. If we do not develop well in the emerging industries and future industries of the Fourth Industrial Revolution, my country may fall behind again. Only by standing at the forefront to face challenges and leading or keeping pace with Western developed countries in the emerging industries and future industries of the Fourth Industrial Revolution can we avoid the continuous emergence of the passive situation of being "stuck in the neck". In response to the challenges brought about by the accelerated evolution of the world's unprecedented changes, my country is required to develop and plan the strategic emerging industries and future industries of the Fourth Industrial Revolution, while making good use of new data technologies, new artificial intelligence technologies, and new green technologies to transform my country's traditional industries, transform traditional industries with the technologies of emerging and future industries, and support emerging and future industries with the material basis of traditional industries. The two complement each other, so as to control the unprecedented changes and realize the great rejuvenation of the Chinese nation. This is my experience of studying the General Secretary's series of expositions.The scope of new productivity is currently controversial. On the one hand, it is believed that new productivity refers to cutting-edge technology fields such as artificial intelligence and quantum computing, which are emerging industries or future industries. On the other hand, some traditional industries can become emerging industries after technological transformation, and it is recommended that national policies should not overemphasize the division of industries. What do you think?New technologies should be based on and carried by industries. The General Secretary stressed that we should lead the development of strategic emerging industries and advance the layout of future industries to accelerate the formation of new qualitative productivity. New industries must be the carriers of new qualitative productivity, but traditional industries can also be the carriers of new qualitative productivity. Steam engines brought new industries such as trains and ships, but steam engines were also used to transform the original textile factory equipment, turning the hydraulic power in the factory into steam power. Electrification technology has certainly brought new industries such as electric lights, electrical appliances, and motors, but it has also been used to replace steam engines and internal combustion engines in traditional factories. The same situation is also reflected in the third industrial revolution. Computer technology has created emerging industries such as large-scale computers for scientific research and commercial use, personal desktops, laptops, and mobile phones, but it has also been used to improve the control of various equipment such as machine tools, automobiles, and ships, and has been widely used in various activities in industry, commerce, and the service industry. The scientific and technological revolutions of big data, artificial intelligence, and genetic engineering have brought emerging industries and future industries, and can also be used to transform traditional agriculture and manufacturing to improve quality and efficiency. These traditional industries will also provide necessary support for the development of emerging industries and future industries.TeslaDevelopment in the United Statesnew energyFor more than a decade, Tesla produced less than 30,000 cars a year and nearly went bankrupt. In 2019, it invested in Shanghai and produced 480,000 cars in the second year, making Tesla the world's largest automobile company with a market value of up to 600 billion US dollars. The secret lies in the strong supporting capacity of my country's traditional industries. Therefore, when seizing the opportunities of the new round of technological revolution to develop emerging industries and future industries, we should not favor one over the other in technological changes carried out by my country's traditional industries with complete supporting facilities, but should advance in parallel so that my country can win in the fourth industrial revolution.Understanding the nature, determinants and development momentum of new productivity is crucial for my country to coordinate the two major situations. China is a country with a 5,000-year-old glorious civilization. Studies have found that before the 15th and 16th centuries, we were ahead of the world for more than 1,000 years. However, because we missed the opportunity of the first industrial revolution, our country suddenly fell behind. We also failed to catch up with the second industrial revolution. However, after the founding of the People's Republic of China, especially after the reform and opening up, China's economy has developed rapidly, and we have basically caught up with all industries in the third industrial revolution. In the production and application of computers and the popularization and development of information technology, my country is ahead of the world in many aspects. China's 4G and 5G network laying has the widest coverage in the world, with the most related patents, and the research and development of 6G technology is also at the forefront of the world. During the third industrial revolution, we caught up with developed countries, making our country closer and more confident than at any time in history to realize the great rejuvenation of the Chinese nation. If we fall behind in the fourth industrial revolution, we may widen the gap with the world's advanced countries.At present, the fourth industrial revolution is emerging. We are standing at the same starting line as developed countries and have four unique advantages: First, China has a population of 1.4 billion, and the number of talents is proportional to the population. We have the advantage of rich scientific and technological talents in various fields; second, China has a super-large domestic market, and the latest technology can be quickly applied in various scenarios, quickly achieving the advantage of economies of scale; third, China has the most complete industrial supporting facilities, and can quickly and at a low cost turn concepts into products. Fourth, China has institutional advantages. We can give full play to the role of the effective market and the government, and seize the opportunities of the fourth industrial revolution. Of course, the number of emerging industries is still small, and the future industries are only beginning to emerge. The vast majority of industries are still traditional industries. However, traditional industries are also the foundation of China's employment and economic development. We must use industrial digitalization, artificial intelligence, and green technology to upgrade traditional industries and make them the carriers of new quality productivity. Traditional industries cannot be said to be backward industries. Traditional industries can be transformed by revolutionary technology to achieve high-end, high-quality, and high-efficiency.With the continuous revolution of science and technology, any industry will change from the future to emerging, and from emerging to traditional. However, as long as there is market demand for its products and its production still conforms to the comparative advantages determined by the local factor endowment structure, such industries should continue to rely on new technologies to improve quality and efficiency and enhance competitiveness. This is an important path for the long-term development of enterprises and an inherent requirement for any industry to maintain its new quality.How to prevent local uprisingThe most important thing is to seek truth from facts, adapt to local conditions, and give full play to the comparative advantages of various regions. Some places should also make full use of their own advantages as latecomers.Emerging industries and future industries are the main fronts for developing new productivity, but developing new productivity requires more urgent coordination of the transformation and upgrading of traditional industries. How to coordinate the relationship between the development of traditional industries and emerging industries and future industries?New productivity must be carried out by industry. As it involves the fourth industrial revolution, some emerging industries and future industries will emerge, such as artificial intelligence,robot, drones, life sciences, etc. However, industries are only carriers. The core essence of new quality productivity is the improvement of productivity brought about by technological change, which inevitably requires high technology, high quality, and high efficiency. Traditional industries are also important carriers of new quality productivity. For example, a factory in a traditional industry has been transformed with big data, artificial intelligence technology, and green energy, which has increased output, reduced costs, improved quality, and enhanced competitiveness in domestic and foreign markets. It also embodies high technology, high quality, high efficiency, and high-end.We must fully and accurately understand the new quality productivity. We must, as the General Secretary emphasized, firmly grasp the primary task of high-quality development and develop new quality productivity in accordance with local conditions. Developing new quality productivity does not mean ignoring or abandoning traditional industries. We must prevent a rush into it and bubbles, and we must not adopt a single model. This requires distinguishing which are future industries, which are emerging industries, and which are traditional industries that improve quality and efficiency? How to grasp this degree? The most important thing is to seek truth from facts, based on the existing industrial foundation, and give play to the comparative advantages of local factor endowments in accordance with local conditions. Some places should also make full use of the advantages of latecomers. New structural economics divides China's existing industries into five categories based on three criteria: the gap between an industry's technology and the world's frontier, whether it conforms to comparative advantages, and whether it is a new industry emerging from a technological revolution: catching-up industries, leading industries, transition industries, emerging industries, and strategic industries. First, catching-up industries. We have them, and developed countries also have them. We are still catching up. Many aspects of traditional manufacturing are still at this stage. For example, some equipment manufacturing and material industries, developed countries have always been ahead during the first three industrial revolutions, and their productivity levels have remained at the forefront of the world. We are still catching up. Chip manufacturing and lithography machines are representatives of this type of industry. The second category is leading industries. There were televisions and air conditioners before World War II. These are the products of the electrical era of the second industrial revolution. Now our home appliance industry is already leading the world. The third category is transition industries.In the past, China was in the lead, but later lost its comparative advantage due to capital accumulation, changes in factor endowment structure, and shifts in comparative advantage. Examples include labor-intensive processing industries such as shoes, luggage, and textiles that developed in the 1980s and 1990s. Enterprises must turn to branding, product design, and market channel management at both ends of the smile curve with high added value. The processing part must use machines to replace people to reduce costs in order to flatten the smile curve or move to inland areas or abroad with low wages to create a second spring. In addition, there are some industries where the technology route has changed and the original products have lost the market. For example, the emergence of digital cameras has caused color film to lose the market. In the face of the crisis, Japan's Fujifilm Company relied on its original technological advantages to enter thebiomedicine , cosmetics, high-performance materials and other fields. The collagen technology used in film production is applied to cosmetics. The ultra-thin coating technology is used to develop polarizing plate protective films for LCD TVs and smart phones. The fourth category is emerging industries. This type of industry is a new industry brought about by the fourth industrial revolution. We are on the same starting line as developed countries. In some emerging industries with short R&D cycles that are mainly based on human capital investment, such as artificial intelligence, life sciences and other new industries, there are many Chinese people, many talents, and a huge domestic market. New inventions and newly created products or technologies can immediately obtain a large market in China, and can use the advantages of my country's complete industrial supporting facilities to quickly turn concepts into products; in addition, there are some changes in factor endowment structure and comparative advantages, which enable some places to enter some industries that did not have comparative advantages and were not developed in the past. These industries are mature in the domestic and international markets, but they are new industries for the local area. Many mature industries in the eastern part of my country are emerging industries in the western part. The fifth category is strategic industries. Some of these industries are industries of the third industrial revolution, while others are emerging industries or future industries of the fourth industry. Strategic industries are characterized by particularly long R&D cycles, which may take ten or even twenty years. The long R&D cycle requires a large amount of financial and material capital investment. Developed countries have accumulated capital over a long period of time since the industrial revolution, and capital is relatively abundant in their factor endowments. They have comparative advantages in industries and technologies that require large amounts of capital investment. my country does not yet have a comparative advantage. However, this type of industry is related to my country’s national security and economic security. In order to avoid being "choked", we need to develop our own industries.For catching-up industries, in addition to using the latecomer advantage to catch up, my country can also use revolutionary new technologies to overtake others. For example, my country's automobile industry, which is powered by internal combustion engines, was still in the catching-up stage ten years ago. Now it has switched to new energy + artificial intelligence unmanned driving, and my country's automobile industry has changed from a catching-up industry to a leading industry.For leading industries, we must continue to utilize new technologies to empower them and rely on the continuous improvement of new quality productivity to maintain the industry's position. We must also pay attention to technological revolutions to prevent the automotive industries like Japan, South Korea and Germany from being overtaken by latecomers.For transitional industries, capable enterprises can enter the two ends of the smile curve with high added value, operate brands, develop new products, and master market channels.Li Ning, Anta and other sports products, or use the Internet and short videos to build new formats, such as Xiyin and Temu. Enterprises in the production link should consider using artificial intelligence and automation technology to reduce production costs to flatten the smile curve, or move to the central and western regions of my country with lower wage costs and "Belt and Road Initiative"Countries along the route are creating a second spring.For the emerging industries with short R&D cycles brought about by the Fourth Industrial Revolution, my country's developed regions have advantages in capital, talent, and industrial supporting facilities. With the joint efforts of effective markets and effective governments, they can create a promising environment for entrepreneurs to seize the opportunities of the new technological revolution, develop emerging industries, and plan for future industries. For the relatively backward central and western regions, they should also seize the opportunities of industrial transfer for entrepreneurs with the joint efforts of effective markets and effective governments, develop new industries that conform to the comparative advantages determined by the local factor endowment structure, and use digitalization, artificial intelligence, green technologies, etc. to improve quality and efficiency, so that the high-end development of industries can become the carrier of new quality productivity.For strategic industries, which are related to national security or economic security, although they do not conform to comparative advantages, my country must develop them on its own. Some of these industries are emerging industries with long R&D cycles, and my country needs to compete with developed countries; some are future industries, and we must plan them now; others are industries of the third industrial revolution, which developed countries have developed for decades and are leading the world, while we are still catching up. These industries need the support of the country to develop, and some need to use a new national system to develop.How to prevent a sudden rush and bubble formation? The most important thing is to seek truth from facts and choose industries suitable for local development according to the comparative advantages determined by the industrial base and factor endowment structure of each region. At present, 85% of my country's industries still belong to traditional manufacturing, and most of them are still in the catching-up stage. my country's per capita GDP is 12,700 US dollars, while Germany's is more than 40,000 US dollars, South Korea and Japan's is more than 30,000 US dollars, and the United States is 80,000 US dollars. This is because the productivity level of most of our industries is still lower than that of these developed countries and we are still catching up. All regions should make use of their comparative advantages as much as possible to make use of the advantages of latecomers, introduce, digest and absorb to carry out re-innovation, or use revolutionary technologies to change lanes and overtake. Most emerging industries require a large amount of capital and human capital investment, and are suitable for development in developed regions such as Beijing, Shanghai, Shenzhen, Guangzhou, Wuhan, Nanjing, Changsha, Xi'an, and Chengdu, where universities, human capital, and front-end industries are concentrated;Solar, wind energy, data storage, etc. require suitable geographical conditions. For example, the solar energy industry is suitable for development in sparsely populated western deserts and wasteland areas. The layout of future industries requires national support. Places with suitable conditions can cooperate with relevant enterprises, research institutes, and national laboratories.The most important thing for all regions in developing industries that serve as carriers of new productive forces is to adhere to the principle of seeking truth from facts, to plan according to the comparative advantages determined by the existing industrial foundations, capital, human capital and natural resources of each region, and to make these industries bigger and stronger through the joint efforts of an effective market and an efficient government.However, it is difficult for some local governments to be realistic and they all believe that they are capable of developing emerging and future industries.Here we need to understand the connotation of new quality productivity. New quality productivity has high technology, high efficiency and high quality at the same time. It is possible to reach the high-tech standard with government subsidies and support, but what about high efficiency? Without high efficiency, it is unsustainable and will eventually fall apart. Without high quality, it cannot meet the people's increasing expectations for a better life, and there will be no market and competitiveness. New quality productivity is based on industry, but it must be high-tech, high-quality and high-efficiency. Traditional industries can also have high technology, high efficiency and high quality through the transformation of revolutionary technologies such as digitalization, artificial intelligence and greening, and they have also developed new quality productivity.You just mentioned that strategic industries need the support of national laboratories, which involves the core issue of innovation. From an international perspective, what should China do in the next step of innovation? How do you view opportunities and challenges?In the fourth industrial revolution, my country is not only at the same starting line as developed countries, but also has many advantages. For example, my country has a population of 1.4 billion, a large number of talents, and its science and engineering education is not far behind the world level, and some are even ahead. Every year, more than 5 million graduates in science, technology, engineering, and mathematics are produced. In addition, there are many entrepreneurs and people with entrepreneurial spirit in my country, which is a talent advantage. Of course, the income and living standards of developed countries are relatively high, and many high-tech talents from developing countries immigrate to developed countries. We must maintain an open attitude, do our own work, create the best research environment, and use the best industrial supporting capabilities and market application prospects to attract companies like Tesla. Tesla has been developing in the United States for more than ten years, and its technology has been constantly innovating, but the industrial supporting facilities in the United States are not good. Tesla produces less than 30,000 cars in the United States each year, with high investment in science and technology, low production, heavy debts, and almost bankruptcy. We welcome Tesla to invest with an open attitude, set up a factory in Pudong, Shanghai in 2019, built in one year, and produced 480,000 cars in the second year, making Tesla the world's largest electric vehicle manufacturer, helping Tesla to reach a market value of US$600 billion and become the world's highest-valued car factory.We should adopt this open attitude and welcome foreign emerging industries to invest and set up factories in China. We should also welcome overseas talents to work in China. At present, the annual investment in scientific research in developed countries accounts for about 2.5%-3% of GDP, and China's proportion is at the same level. China is the world's largest economy in terms of purchasing power parity, and it can provide the most scientific research funds in the world every year. In recent years, China has applied for the most patents and published the most papers in major international scientific journals every year. We can build a nest to attract the phoenix, attract other outstanding talents in the world to China, help us seize the opportunity of the fourth scientific and technological revolution, let new quality productivity continue to emerge with emerging industries, and continuously transform future industries into emerging industries, while also letting traditional industries rejuvenate with new quality productivity.How to Deepen Institutional Reform under New Business ModelTo develop new productivity, we need appropriate production relations. We need to explore the distribution system, which also involves innovative arrangements in the financial system. The financial needs of traditional industries are different from those of emerging industries.
People say that new quality productivity is mainly "three new things", in addition to "new manufacturing", there are also "new models" and "new services". However, new services and new formats may face a monopoly market. Do you think there is a lot of room for them? How can they exert their power?For new things, let them appear first. If you don’t let them appear, they will never exist. For example, the scale economy of Internet platforms is very prominent now, and there is indeed the advantage of first mover. If they are in a monopoly state and the profits are high, they will attract competitors to join the market to provide services with similar functions. Taobao dominated the market at first, and later there were similar functions but slightly different models.JD.com、Pinduoduo, the market share is constantly being eroded. Secondly, we need to create a suitable financial, legal, and intellectual property protection environment for new entrants, encourage competition, and prevent monopoly. Thirdly, digital technology, artificial intelligence, etc. do have first-mover advantages, and after a period of accumulation, they may present a monopoly. If it is indeed a monopoly, it is necessary to break it with regulation, find means to supervise new technologies, and ensure competition. Some emerging industries may use big data to kill old customers, and this requires supervision to ensure the interests of consumers. In general, entrepreneurs need to be encouraged to develop new manufacturing, new models, and new services. After development, necessary regulations should be formulated according to their characteristics to promote competition and protect consumers. Only in this way can we seize the development opportunities brought by the technological revolution and let the new quality productivity continue to serve to improve the quality of life and development to meet people's growing expectations for a better life.At present, many enterprises and industries are keen on hyping concepts or taking advantage of hot topics, perhaps to attract more government policy support, and always mention "new quality". How do you view the policy role of the government in leading the industry, while preventing the government from taking on too much responsibility for new quality productivity? How to combine effective market and effective government to cultivate new quality productivity? This is a dialectical question. New productivity must rely on industry as a carrier to realize the new productivity brought by revolutionary technology and promote the improvement of productivity level. Entrepreneurs must seize this opportunity, which depends on market incentives. However, market failure is common in the process of technological innovation and industrial upgrading. Entrepreneurs need the government to help them overcome market failures in order to turn the opportunities of new productivity from potential to reality. For example, revolutionary technology can only be produced by breakthroughs in basic scientific research, otherwise the development of revolutionary technology will be a sourceless water. The government needs to solve the bottleneck of basic science; after the breakthrough of basic scientific research, there is also a need for scientific and technological and corporate talents who can use the new knowledge of basic scientific research to develop new products. The government must plan ahead and invest in the education of scientific and technological talents and support the development of related enterprises when investing in basic scientific research. Huawei's 5G technology is a good example. Huawei's 5G is the world's leading 5G. The basic scientific research breakthrough of Huawei's 5G technology comes from a paper by a Turkish mathematician. Why can't Turkey develop 5G? Because it has not cultivated talents and enterprises for the corresponding technology development. Talent education in mathematics, science, engineering, and technology is what the government should do. In terms of hardware, China's 5G communications are leading the world because the Chinese government leads the world in the deployment of 4G and 5G base stations. The good development of the platform economy is also related to the popularization of 4G and 5G networks. The improvement of communication and transportation infrastructure provides the necessary conditions for the innovation of business formats. In general, the effective market is based on the government's effectiveness, and the government's effectiveness is based on the effective market. They complement each other. In the face of a new round of technological revolution and industrial transformation, if new industries, new business formats, and new services, which are carriers of new quality productivity, are to emerge in my country in an endless stream, we need the joint efforts of an effective market and an effective government.All regions are committed to developing new quality productivity. How to avoid sloganization or bubble formation requires grasping the standards of new quality productivity. First, whether the developed industry has become a carrier of new technology; second, whether the efficiency has been improved, and only by improving efficiency can it be profitable and sustainable; third, whether the quality has been improved, and only high-quality products can have continuous market demand. The above three conditions are met by the technological transformation of emerging industries and traditional industries. In addition, some future industries are developing new high technologies, and their products cannot be mass-produced and make money, so they need to be cultivated. Industry-leading companies like Huawei will have the ability and willingness to invest in order to maintain their leading position. The vast majority of future industries rely mainly on scientific research institutes and national laboratories to carry out technical research. After breakthroughs are made in the research, scientific and technological personnel or entrepreneurs with the ability to develop scientific and technological enterprises generally rely on venture funds to develop new technologies into marketable new industries. my country's new car-making forces are a typical example. Local governments can provide guidance funds, tax incentives, factories, etc. to support the development of such industries.If some places are not clear at first, a lot of waste will have already occurred by the time they are seen clearly.Most local government officials have the desire to benefit the local area during their tenure. It is understandable that they do not want to fall behind in the new round of scientific and technological revolution and industrial transformation. However, in order to develop the economy well, we must seek truth from facts and combine the comparative advantages of local industrial foundations and endowment conditions to select emerging industries and technological innovations in traditional industries that can serve as carriers of local new productivity. The classification of the five industries mentioned above can be used as a reference to avoid inaction or misconduct in the development of new productivity, thereby losing development opportunities or causing a lot of waste.Some economists have suggested fostering new quality productivity by adopting tax exemption and tax reduction policies instead of subsidies. Is this a good idea?Tax exemption and reduction will be effective only after the enterprise has started production, has a market, income and profits. If the enterprise has not started production yet, or the output is still small, and the revenue is still insufficient to cover the expenditure, the incentive effect of tax exemption and reduction on the enterprise is not great. At this time, tax exemption for consumers in the early stage of new energy vehicles can encourage everyone to buy new energy vehicles and help enterprises achieve economies of scale in production more quickly, which is more effective than tax exemption and reduction for production enterprises. If it is the technological transformation of traditional industries, a tax deduction system can be implemented for its technological investment. I think it cannot be a one-size-fits-all approach. It needs to be realistic and realistic. According to the technical characteristics of developing new quality productivity and the characteristics of the development stage of each industry, appropriate policy measures can be designed.To develop new productivity, we need to break through obstacles through deepening reform. For example, we need to deepen reforms in the economic system, scientific and technological system, and market-based allocation of factors, break through the bottlenecks and obstacles that hinder the development of new productivity, and innovate the allocation of production factors. How do you view the relationship between new productivity and comprehensive deepening of reform?The economic base determines the superstructure, and the superstructure reacts on the economic base. The economic base is composed of productivity and production relations determined by productivity. Therefore, new productivity will inevitably bring about some changes in production relations, which involve the ownership form of various means of production, the status and mutual relationship of R&D personnel, workers and managers in production, and the arrangement of income distribution. Huawei's development is an example. Huawei is a typical representative of advanced new productivity in the third industrial revolution. On this basis, it has seized the opportunity of the fourth industrial revolution and made China's information technology the world leader in a short period of time. We can see the changes in Huawei's production relations. All employees hold shares to mobilize the enthusiasm of each employee. Each employee is the owner of the company. Ren Zhengfei holds only 0.73% of the shares. Employees are divided into different groups based on their work performance. The more they work, the more they contribute, the more they get.To develop new productivity, we need to have production relations that are compatible with it, explore appropriate ownership arrangements and distribution systems, and also have relevant institutional arrangements of the superstructure that are compatible with it, such as financial institutional arrangements. As the new round of scientific and technological revolution and industrial transformation is in full swing, enterprises in the catching-up, leading, and overtaking industries can use their own funds, bank financing, stock markets, bond markets, and government tax incentives for technological transformation to increase technological upgrading; places with human capital, natural conditions, and industrial foundations required for the development of emerging industries can also use government guidance funds and venture capital to support the development of innovative and growing enterprises; the advanced layout of future industries requires more investment in research institutes, national laboratories, and university research funds with financial support; world-leading companies in the Internet, information, digital platforms, and other industries can also use their technological accumulation and strong capital investment capabilities to layout future industries to avoid being overtaken by others, so as to maintain their world-leading position in the fourth industrial revolution.In addition, the emerging industries and future industries of the Fourth Industrial Revolution are the results of a large amount of R&D investment. After the successful development of technology, perfect intellectual property protection is needed so that enterprises can be motivated to carry out expensive R&D. Therefore, my country also needs to strengthen the legislation and enforcement of the patent system. The development of new productivity depends on high-tech talents with innovative spirit. my country must also change the system of examination-oriented education and strengthen the independent cultivation of innovative and outstanding talents. At the same time, create conditions to encourage scientific and technological talents working overseas to return to my country and attract foreign scientific and technological talents to work in my country.In general, my country and developed countries are on the same starting line in the Fourth Industrial Revolution. If we can deepen reforms in the economic system, scientific and technological system, and market-based allocation of factors, clear the bottlenecks and obstacles that hinder the development of new productive forces, and carry out institutional innovation in the ownership form of production relations, distribution system, and other related systems such as finance, patents, and education that support corporate investment, production, and operations to adapt to the development of new productive forces, then my country can make full use of its institutional advantages of a large population, abundant talents, a huge domestic market, complete industrial supporting facilities, and a combination of an effective market and an effective government to win the Fourth Industrial Revolution, provide a solid material foundation for coordinating the overall strategic picture of the great rejuvenation of the Chinese nation and managing the great changes that have not been seen in a century, realize the great rejuvenation of the Chinese nation with Chinese-style modernization in the new era, and build China into a socialist modern power by the 100th anniversary of the founding of the People's Republic of China in 2049.
