On July 18, 2024, the Third Plenary Session of the 20th Central Committee of the Communist Party of China (hereinafter referred to as the "Third Plenary Session") adopted the Decision of the Central Committee of the Communist Party of China on Further Deepening Reform and Promoting Chinese-style Modernization (hereinafter referred to as the "Decision"). The CBN Research Institute interprets the key contents of the Decision from an economic perspective in conjunction with the Explanation on the Decision of the Central Committee of the Communist Party of China on Further Deepening Reform and Promoting Chinese-style Modernization (hereinafter referred to as the "Explanation").
First, the main background of the four aspects
System building is the main line. The "Explanation" mentions that "the improvement of the socialist system with Chinese characteristics is a dynamic process, which will inevitably continue to develop with the development of practice, and the existing system needs to be continuously improved". The current state of development is closely related to the content of the Decision, so we first need to clarify the background of the Decision.
(1) A new round of scientific and technological revolution and industrial transformation
In the context of the continuous development of the global digital economy, the application scope of the new generation of information technology involving big data, Internet of Things, artificial intelligence and other fields continues to expand, extending new industries, and providing a foundation for the continuous upgrading of many traditional industries, and social productivity will be further liberated and developed in this context. New energy, new materials and biotechnology are also constantly changing people's lives, and we are facing a new round of scientific and technological revolution and industrial transformation.
In the scientific and technological revolution and industrial transformation, technology is the core. In 2023, the export value of the "new three" (i.e., electric manned vehicles, lithium-ion batteries and solar cells) of high-tech manufacturing industry will reach 1.06 trillion yuan. However, China's current industrial system is still characterized by being large but not strong, complete but not refined. In 2023, the ratio of R&D expenditure to GDP will continue to increase by 0.09 percentage points from the previous year, reaching 2.64%. However, the problem that key core technologies are controlled by others and have not fundamentally changed still exists.
(2) People-centered concept
Adhering to the people-centered approach is a basic strategy for upholding and developing socialism with Chinese characteristics in the new era.
Common prosperity and the benefits of modernization to all the people are important directions of development. For now, we need to look at the gaps that still exist. In 2023, the actual year-on-year growth rate of per capita disposable income of rural residents was 2.8 percentage points higher than that of urban areas, but in absolute terms, the level of this indicator in urban areas exceeded that of rural areas, and at the end of that year, the Internet penetration rate in urban areas reached 83.3%, 16.8 percentage points higher than that in rural areas.
At the same time, the population structure has also changed in recent years, with the proportion of people aged 60 and above accounting for 21.07% of the total population in 2023, an increase of 1.23 percentage points from 2022, and the birth rate has dropped to 6.39% for seven consecutive years. The aging population and declining birthrate are significant, and it is necessary to respond proactively accordingly.
(3) Complex international situation
Globalization can make resource allocation more efficient. However, since the past few years, international geopolitical conflicts and trade protectionism have had a huge impact on global cooperation. In 2023, IMF data shows that global GDP will increase by 3.21% year-on-year in real terms. As a result, China's industrial chain cooperation and trade with overseas countries will inevitably be hindered to a certain extent.
However, we should also make it clear that although in the face of the complex and volatile international situation, there are still great opportunities for Chinese companies in overseas markets. Starting in January 2024, the global manufacturing PMI is no longer in the contraction range, which to a certain extent means the recovery of external demand. From the perspective of regional markets, emerging markets such as Southeast Asia and Africa have shown huge development space along with local economic development.
(4) Construction of ecological civilization
Building a beautiful China is an important goal of building a modern socialist country in an all-round way, and the construction of ecological civilization has received great attention, and high-quality economic and social development needs to be green and low-carbon. With the empowerment of new technologies, energy consumption per unit of GDP will decrease by 0.5% from the previous year to 0.553 tons of standard coal per 10,000 yuan, and the efficiency of energy and resource utilization will continue to improve.
However, when we look at another set of data: in 2023, coal consumption will still account for more than 50.0% of total energy consumption; Among the 339 cities monitored at the prefecture level and above, 40.1% of the cities still did not meet the air quality standard...... It is undeniable that we still have a lot to do in the construction of ecological civilization.
2. Interpretation of important expressions
The first part of the "Decision" is a general remark, and the second to fourteenth parts deal with economic, political, cultural, and other aspects of reform. This article selects a few important keywords for detailed interpretation.
(1) New quality productivity, innovation and high-level scientific and technological self-reliance and self-reliance
In 2023, the term "new quality productivity" was first proposed, and the "Decision" adopted by the Third Plenum of the Central Committee of the Communist Party of China once again emphasized this concept. An important feature of the new quality productivity is innovation. Here it is necessary to clarify what "innovation" entails. We believe that "innovation" here has two important meanings.
On the one hand, it is the "innovation" in the application of technology and technology from scratch on a global scale. The development of new quality productive forces, accompanied by the emergence and application of high-tech, high-efficiency, and high-quality productive forces, can, to a certain extent, guide the current new round of scientific and technological revolution and industrial transformation, strengthen China's position in the global market, and at the same time bring new momentum to economic growth. On the other hand, "innovation" echoes the "high-level scientific and technological self-reliance and self-reliance" mentioned in the first part of the "Decision", pointing to the continuous enhancement of domestic technology to cope with the current problem of "key core technologies being controlled by others has not fundamentally changed", and to provide support for expanding domestic demand and smoothing external circulation.
In the third part of the "Decision", it is proposed to "improve the system and mechanism for the development of new quality productive forces according to local conditions", strengthen technological innovation, pay attention to the development of new fields and new tracks, future industries, strategic industries, emerging industries and the green and digital transformation of traditional industries, and promote and encourage all kinds of advanced production factors and funds to gather here. In addition, the term "innovation" related to technology is also mentioned many times in the fourth part, "Building an institutional mechanism to support comprehensive innovation", which supports innovation in education, science and technology systems, and human resource development.
(2) Producer services, trade in services and public services
In the full text of the "Decision", "service" is another high-frequency word in addition to "innovation" and "science and technology", which appears 59 times, and the service industry has received huge attention. With the new round of scientific and technological revolution and industrial transformation, the manufacturing industry is developing towards digital intelligence, mining new forms of service industry, in-depth high-quality service supply, in fact, it is also a process of creating a large number of employment opportunities, which can cultivate domestic demand and further expand external demand.
In the context of industrial transformation, the "high-quality development of the producer service industry" has been emphasized again in the "Decision". In addition, we note that there are two other services related themes that have been mentioned several times – trade in services and public services, which will also be the focus of future policy efforts.
In 2023, China's trade in services reached a record high of 6,575.43 billion yuan, but the value of exports fell by 5.8% from the previous year. Compared with the strong competitiveness of goods and products in the global market, forming a huge trade surplus, the performance of China's service products in the global market is slightly inferior. In the third part of the Decision, "Improving the Institutional Mechanism for Promoting High-quality Economic Development" and the seventh part, "Improving the Institutional Mechanism for High-level Opening-up", the "Decision" emphasizes the service of professional service institutions to go overseas, and pays attention to the global service supply in shipping, finance and other aspects.
Under the people-centered concept, the provision of public services has a direct impact on people's lives. Unlike "producer services" and "trade in services", "public service" has also been mentioned many times in the Decision of the Central Committee of the Communist Party of China on Deepening the Reform of Party and State Institutions adopted by the Third Plenary Session of the 19th Central Committee, and has been a key word for a long time. We compared the two documents and there were clear advances in three areas. First, this year's document emphasizes the balance and accessibility of basic public services, and in the sixth part, "Improving the Institutional Mechanism for Urban-Rural Integrated Development", it proposes to "implement a system of providing basic public services through permanent residence registration" to optimize the supply of basic public services for rural migrants. Second, in the 11th part of "Improving the System for Safeguarding and Improving People's Livelihood", it is proposed to improve the level of relevant public services in view of the characteristics of the aging population and the declining birthrate. Third, in Part 10 "Deepening the Reform of the Cultural System and Mechanism" and Part 11, the Decision focuses on the provision of services in culture, employment, social security and other aspects, and makes a detailed description.
(3) Adhere to and implement the "two unswerving" and build a unified national market
In the second part of the "Decision", "building a high-level socialist market economic system", it once again emphasizes "adhering to and implementing the 'two unswerving'" and "building a unified national market".
In the expression of relevant content, "fairness" is a high-frequency word. Through fair market competition, the vitality of social innovation can be activated and the efficiency of resource allocation can be improved. In view of the improvement of the fairness of market competition, the "Decision" further promoted the legislation of the Law on the Promotion of Private Economy, paid attention to the market access and financing of the development of the non-public economy, and proposed the construction of a unified national market with "unified market basic system rules, fair and unified market supervision, and high-standard connection of market facilities".
Another aspect worth paying attention to is the participation of state-owned assets and state-owned enterprises (SOEs) and the private sector in the field of cutting-edge technologies. The "Decision" mentions the concentration of state-owned capital in "important industries and key areas related to national security and the lifeline of the national economy" and "forward-looking strategic emerging industries"; As for the non-public economy, it is proposed to "support capable private enterprises to take the lead in undertaking major national technological research tasks", which is an important embodiment of "the complementary advantages and common development of various ownership economies".
(4) The relationship between central and local finances
In the fifth part of the "Decision", "Improving the Macroeconomic Governance System", the relationship between the central and local finances is further clarified. Since 2022, the revenue from the transfer of state-owned land use rights in the income of local government funds has continued to decrease; As of the first half of 2024, the year-on-year decline in revenue has not stopped. As an important source of revenue for local governments in the past, this revenue still accounts for 85.55% of the revenue of local government funds at the local level even in the first half of 2024, and its scale continues to shrink to affect local fiscal expenditure to a certain extent. The two parts of the "Decision" proposed "increasing local independent financial resources" and "increasing the proportion of central fiscal expenditure" are important directions to alleviate this problem. Among them, "increasing local independent financial resources" is mainly carried out through specific methods such as "expanding local tax sources and appropriately expanding the authority of local tax administration".
(5) Ecological environment governance and green and low-carbon development
Traditional industries and manufacturing industries are currently developing towards greening, and the twelfth part of the "Decision" "Deepening the Reform of the Ecological Civilization System" puts forward goals for this.
In this part, the Decision proposes to "implement fiscal, tax, financial, investment, and price policies and standard systems that support green and low-carbon development, and develop green and low-carbon industries". There was a similar expression in the report of the 20th National Congress of the Communist Party of China, but the word "implementation" was not used at that time, but "improvement". The repeated mentions of relevant content emphasize the importance of promoting the construction of ecological civilization in many aspects. In addition to the "green tax system" mentioned in Part 12 of the Decision and the "green finance" mentioned in Part 5, the use of investment vehicles such as green development funds and low-carbon REITs may also receive more support.
The specific direction of building an ecological civilization is also quite extensive. The development of "pollution control", "waste recycling", "clean and efficient use of coal", "new energy", "carbon emissions" and other fields are mentioned in the "Decision".
(Image source: Visual China)
——
Text | Li Jiayi is a researcher at the China Business Research Institute
Contact Us | [email protected]
(This article is from Yicai)
!["At the door" can clean your teeth! Yingpu Street Community Health Service Center added a new dental project[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)