Chinese state media warns: Don’t rush into “new productivity” : Radio free asia

The "new quality productivity" proposed by China's top leader Xi Jinping was included in the work report of the recently concluded National People's Congress, which temporarily attracted widespread attention from the outside world to China's economic policy trends. However, the Economic Daily, which has an official background, issued an article last week saying that the development of new productive forces should not be rushed into force. So, what exactly is the Chinese government’s policy on the so-called “development of new productive forces”?

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As early as September last year, Xi Jinping proposed the concept of "new quality productivity" during an inspection in Heilongjiang. Subsequently, Chinese state media published articles one after another to promote the popularity of this concept.

"Economic Daily" published an article signed by "Sheng Chaoxun" on January 11 this year, "Accelerating the Cultivation and Formation of New Productivity", which proposed that new productivity is relative to traditional productivity and refers to the extensive use of big data and artificial intelligence. , the Internet, cloud computing and other new technologies are closely combined with high-quality workers, modern finance, data information and other elements to create new industries, new technologies, new products and new business formats.

The article also said that China has high-quality soil and good basic conditions for the formation of new productive forces. It should seize the opportunities of the new round of scientific and technological revolution and industrial transformation, further deepen reform and opening up, accelerate the cultivation and expansion of strategic emerging industries and future industries, and gather and promote new industries. The majestic power of qualitative productivity.

On March 3, just before the convening of the National People's Congress this year, Xi'an University of Science and Technology took the lead in establishing the "New Quality Productivity Research Center", which was personally directed by the president of the school.

Take electric vehicles as an example

But the same Economic Daily's tone on "new productivity" changed just two months after its January article was published. The title of the article this time changed to "To prevent the rush to develop new productive forces".

The article said that in developing new productive forces, the breakthrough and main direction is to cultivate and strengthen emerging industries, covering all technology-intensive industries. These industries require large capital investment and long time cycles. If we ignore the laws of industrial development and blindly follow the trend, we will only waste speed and waste, leading to new duplication of construction, overcapacity and other problems, which will have a negative impact on local economic and social development.

It is worth noting that the current development trend of China's electric vehicle industry is being questioned and scrutinized more and more. According to The Paper, at the China Electric Vehicle Hundreds Forum (2024) held on March 16, Shan Zhongde, Vice Minister of the Ministry of Industry and Information Technology, said that the Ministry of Industry and Information Technology will further strengthen industrial overall layout and investment guidance to curb blind investment. and duplication of construction, accelerate the promulgation of regulations on electric vehicle production access management, and improve the exit mechanism for backward enterprises.

At the State Council press conference in January, Xin Guobin, Vice Minister of the Ministry of Industry and Information Technology, when talking about the development momentum of new energy vehicles in 2024, said that there are still some disorderly competition behaviors in this field, and some places and enterprises still have The blind launch and repeated construction of new energy vehicle projects. He also emphasized that most new energy vehicle companies, especially those focusing on domestic sales, have not yet achieved profitability.

An article in the Economic Daily pointed out last week that the rush to develop high-tech industries will not only result in a waste of resources caused by "unfinished projects", but will also lead to the dispersion and misallocation of high-quality resources and raise the prices of industry production factors. , resulting in industry chaos such as scattered layout. The article emphasizes that China has experienced lessons in this regard and should learn from them.

This is an old problem

Looking through articles about the development of China's high-tech industries over the years, we can find that rushing to the top is almost a recurring phenomenon in these industries.

There was an article on the website of the Chinese Academy of Sciences in 2003, "High-tech Industries Be Wary of Duplicate Construction," which pointed out that data at that time showed that China had built more than 20 integrated circuit production lines, and more than a dozen provinces and cities were busy with planning and certification. , and the construction boom of high-tech parks is also rising in various places, and many places are building "software parks" and "high-tech parks".

The article analyzes that the reason why local governments ignore duplication of layout and rush to launch high-tech projects is the "performance competition", and the "root cause" lies in performance assessment. Some local officials said that superiors will only consider whether your economic development is slower or faster than others when evaluating, and no one will analyze who is developing sustainably and who is killing the goose to lay eggs.

But twenty years later, China does not seem to have changed its pattern of redundant construction and rushing forward in the field of high-tech industries. The 2020 article "Problems and Responses in Artificial Intelligence Empowering the Real Economy" by the official People's Daily pointed out that the phenomenon of duplication of construction in the field of artificial intelligence is very serious; many local governments have included artificial intelligence as a key industry. As of February 2018, a total of 65 robot industrial parks are under construction or have been completed across the country; however, judging from the current situation, there are very few robot industrial parks with real technology development capabilities, and most robot companies are concentrated in entertainment with low technical levels. , service robots.

The article analyzes that many of these companies that are pouring into new industries are not thinking about how to do a good job in the industry, but are eager to catch up with the "window" and realize cash in the capital market in the short term. Therefore, these companies compete for users by burning a lot of money, providing large subsidies, and engaging in "price wars." This approach can bring some prosperity in the short term, but once the technology fails or the environment changes, the bubble will be punctured.