Thriving New Growth Drivers to Promote a Burgeoning New Economy

Thriving New Growth Drivers to Promote a Burgeoning New Economy

—Series Report IX on the Economic and Social Development Achievements since the 18th CPC National Congress

Source: National Bureau of Statistics 

Published on: September 26, 2022 Characters: 5725

Since the 18th CPC National Congress, with the acceleration of new generation of technological revolution and industrial transformation, the rapid reconstruction of global landscape for innovation, and the profound changes of the world economy, China has entered a critical period of development model transformation, economic restructuring and gear-changing of growth drivers, during which innovation has increasingly become the key to cracking development problems. Facing new opportunities and challenges, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the whole country has resolutely implemented the new development philosophy, followed through the innovation-driven development strategy, strengthened strategic scientific and technological research, and advanced the "mass entrepreneurship and innovation” campaign. China has since achieved new technological breakthroughs, fostered new growth drivers, vigorously developed its new economy, and entered the ranks of innovative countries. At the same time, science and technology are increasingly playing a leading role in promoting high-quality growth and better meeting people’s needs for a better life.

I. An Improved Innovation Structure and a Better Innovation Ecosystem

Since the 18th CPC National Congress, the CPC Central Committee has placed innovation at the core of the country's overall development. It has continued to increase innovation input, given full play to the leading role of enterprises in innovation, accelerated the building of innovation platforms, deepened reform of the science and technology system, improved the environment for innovation in the whole society, and steadily enhanced the overall efficiency of the national innovation system.

(I) Greater investment in innovation

Investment in innovation has been increased across the board, with rapid and sustained growth in R&D spending, providing a strong support for stimulating innovation vitality and enhancing innovation capacity. In 2021, China’s investment in R&D reached RMB 2,795.6 billion, an increase of 1.7 times over 2012 at current prices, with an AAGR of 11.7%, ranking second globally after the United States. The intensity of R&D investment has steadily enhanced. In 2021, the ratio of R&D investment to GDP reached 2.44%, 0.53 percentage points higher than in 2012 and close to the average of OECD countries. Investment in basic research has been increased. In 2021, the investment in basic research hit RMB 181.7 billion, an increase of 2.6 times compared with 2012, with an AAGR of 15.4%; accounting for 6.5% of the total investment in R&D, an increase of 1.66 percentage points compared with 2012.

(II) Dominant role of enterprises in innovation

The incentive mechanism for enterprise innovation has been improved, promoting the further gathering of innovation factors in enterprises, and developing a market-oriented technical innovation system with enterprises as the main body, and which deeply integrates enterprises, universities, research and applications. In 2021, the investment in R&D by enterprises of all types hit RMB 2,150.4 billion, an increase of 1.7 times over 2012, with an AAGR of 11.9%, accounting for 76.9% of China’s total investment in R&D. Enterprises have carried out extensive innovation activities, and made solid progress in the integration of manufacturing, education and research. In 2021, 38.3% of industrial enterprises above designated size had R&D activities, 24.6 percentage points higher than in 2012; carrying out a total of 825,000 R&D projects, an increase of 1.9 times over 2012. High-tech enterprises have played a distinct leading role in innovation. At the end of 2021, high-tech enterprises owned 1.213 million valid invention patents, accounting for 63.6% of the total number of valid invention patents of domestic enterprises.

(III) Burgeoning innovation platforms

With the progressive improvement of national innovation platform system, major innovation platforms in a series of key areas, such as information science, life science, nanoscience and quantum science, have been established, providing important support for research in major basic frontier areas and the innovation and development of enterprises. At the end of 2021, 533 national key laboratories and 191 national engineering research centers were in operation, and 20 national scientific data centers and 31 national germplasm and experimental material repositories had been laid out and constructed. The construction of enterprise innovation platforms has been accelerated and the support for innovation and development of the real economy has been effectively strengthened. At the end of 2021, there were 1,287 national science and technology business incubators and 1,636 national corporate technology centers. The landscape of innovation continues to be optimized, with Beijing, Shanghai, Guangdong-Hong Kong-Macao Greater Bay Area ranking among the top 10 global science and technology clusters, and the construction of comprehensive national science centers in Huairou of Beijing, Zhangjiang of Shanghai, and Hefei of Anhui was kicked off.

(IV) Rapid improvement of innovation systems and mechanisms

Adhering to the "two-wheel drive" of scientific and technological innovation and institutional innovation, the reform of the science and technology system has shifted from establishing a framework and building a system to enhancing systemic capabilities and strengthening institutional resilience. Efforts have been made to improve a new national system under the condition of socialist market economy, optimize and reorganize the way to set up and manage major scientific and technological tasks, and adopt a system of "opening competition mechanism to select the best candidates" and "horse-racing" to fight the battle for key and core technologies. By the end of 2021, the National Technology Achievement Transformation Guiding Fund had set up 36 sub-funds with a total capital scale of RMB 62.4 billion. With better talent evaluation and incentive mechanisms, leading talent and innovation teams have emerged at a faster pace, and the full-time equivalent of R&D personnel has increased from 3.247 million man-years in 2012 to 5.62 million man-years in 2021, ranking first in the world for nine consecutive years. The commercialization of scientific and technological achievements has been accelerated, the right to use, disposal and profit from scientific and technological achievements has been fully decentralized, and the technology trading market has become more active. In 2021, China's technology market turnover reached RMB 3.7 trillion, an increase of 4.8 times over 2012. The set-up of a science and technology innovation board, the reform of the growth enterprise market, and the establishment of the Beijing Stock Exchange have opened up channels for technology companies to get directly listed and raise funds, and developed a virtuous circle of mutual promotion of science and technology, industry and finance.

II. Greater Momentum of Entrepreneurship Underpinned by New Market Players and New Growth Drivers

Since the 18th CPC National Congress, further progress has been made in the reform of "streamlining administration, delegating power, strengthening regulation, and improving services", continuously improving the business environment, stimulating greater momentum for innovation, promoting the emergence of new entities and businesses, vigorously boosting the growth of new industries and products, and constantly forming various new forms and models of business, so as to effectively expand the space for economic development and create a surging force for high-quality development.

(I) In-depth progress made in mass entrepreneurship and innovation in both depth

The mass entrepreneurship and innovation campaign have greatly stimulated the vitality of market entities. Various types of market entities with high vitality, strong resilience and good growth potential have emerged, providing solid support for maintaining stable growth and employment and promoting development. In 2021, there were 28.87 million newly registered market entities nationwide, with more than 79,000 new market entities registering on average per day, including nearly 25,000 new enterprises registering on average per day. At the end of 2021, the total number of market entities in China reached 154 million, an increase of 1.8 times compared with the end of 2012, with an AAGR of 12.1%. Since the 18th CPC National Congress, the total number of newly added tax-paying market entities nationwide has reached 93.15 million, an average annual increase of more than 10 million; the number of general VAT taxpayers increased from 5.44 million at the end of 2015 to 12.38 million at the end of 2021, an increase of 1.3 times. Activities such as the National Mass Innovation and Entrepreneurship Week, the "Maker in China" Innovation and Entrepreneurship Competition, and the China Innovation & Entrepreneurship Competition have been vigorously carried out, and the development of platforms supporting mass entrepreneurship and innovation has made remarkable progress, effectively supporting the development of entrepreneurship and innovation. As of 2021, there were 212 demonstration bases for mass entrepreneurship and innovation, and 2,551 nationally registered maker spaces.

(II) Great vitality shown by new sci-tech enterprises

China has attached great importance to improving the innovation capacity of enterprises, and actively promoted the concentration of innovation resources in enterprises. In respond, various enterprises have seized the opportunities and taken the initiative to foster a number of innovative leading enterprises with core competitiveness, showing great potential for development. In 2021, the number of high-tech enterprises in China reached 330,000, and the amount of tax paid increased from RMB 0.8 trillion in 2012 to RMB 2.3 trillion. According to the Global Unicorn Index 2021, China had 301 "unicorn companies" in 2021, 74 more than the previous year. Relevant data showed that, there were 171 gazelle enterprises and 222 cheetah enterprises in 2021, an increase of 71 and 96 compared with the previous year respectively. Small and medium-sized innovative enterprises have become more resilient, and increasingly serving as a new force for technological and model innovation. By the end of 2021, China had fostered more than 40,000 "specialized and innovative" enterprises and 4,762 "small giant" enterprises. The index of the integrated development of small and micro enterprises increased from 36.4 in 2015 to 46.1 in 2020.

(III) Boom in new industries and products

The integration of advanced manufacturing and modern service industries have been vigorously deepened to make the real economy better and stronger, and continue to explore new economic growth point. The high-tech and equipment manufacturing industries are developing better, with further enhancement of industrial basic capacity and the modernization of the industrial chains, promoting the transformation and upgrading of "Made in China" to "Intelligent Manufacturing in China". In 2021, the added value of high-tech manufacturing and equipment manufacturing enterprises above designated size accounted for 15.1% and 32.4% of the added value of industrial enterprises above designated size, up 5.7 and 4.2 percentage points respectively from 2012. The modern service sector has been integrating with industrial transformation, consumption upgrading and scientific and technological innovation, progressively increasing its share in the service industry. In 2021, the added value of info-transmission software and IT services and leasing and business services accounted for 7.2% and 5.8% of the added value of services, respectively, up 2.5 and 1.1 percentage points from 2012. The output of green and intelligent products is growing rapidly. In 2021, the output of new energy vehicles, industrial robots, solar cells and integrated circuits increased by 28.2 times, 12.5 times, 4.4 times and 2.5 times respectively compared to 2014.

(IV) Boom in new business models

A new generation of information technology is widely used, and the integration of online and offline is accelerating with the increasingly important online consumption under the impact of the pandemic, boosting new business forms and models such as unmanned retail, contactless delivery, live delivery, online diagnosis and treatment, and remote working. It has not only promoted industrial restructuring, but also met people's needs for personalized, high-quality and diversified services. In 2021, the online retail sales of physical commodities reached RMB 10,804.2 billion, accounting for 24.5% of the total retail sales of consumer goods, up 15.3 percentage points over 2014; the overall volume of express business exceeded the 100 billion mark for the first time, reaching 108.3 billion parcels, an increase of 18 times over 2012, ranking first in the world. Application scenarios such as short video and network broadcast are increasingly diverse, and mobile Internet traffic is growing rapidly. In 2021, the total traffic data via mobile Internet reached 221.6 billion GB, 252 times more than in 2012. The Statistical Report on the Development of the Internet in China shows that as of December 2021, the scale of online office and online medical users in China had reached 469 million and 298 million respectively, and the number of online video and short video users had hit 975 million and 934 million respectively.

III. Continuous Unleashing of Great Potential of Innovation in the Context of a Thriving Digital Economy

Since the 18th CPC National Congress, the creative potential of the whole society has been fully unleashed, basic research and key core technologies have been effectively advanced, the country's strategic scientific and technological strength has been strengthened, the transformation of scientific and technological achievements into real productive forces has been accelerated, and the trend of industrial digitization and digital industrialization has accelerated, injecting new sources of vitality into economic development.

(I) Great achievements made in basic and frontier research

The overall strength of China's basic research has increased significantly, with disciplines such as chemistry, materials, physics and engineering leading the world, and major original scientific and technological achievements have been made in cutting-edge technologies such as quantum communication, iron-based superconductivity, neutrinos, stem cells and brain science. The infrastructures for major scientific and technological research have been improved, and a number of key projects have been rolled out, including the Scattered Fission Neutron Source, the Five-hundred-meter Aperture Spherical radio Telescope (FAST), the Full Superconducting Tokamak Nuclear Fusion Experimental Device, the Pulsed Strong Magnetic Field Experimental Device, and the National Protein Science Research Facility, which is the world’s first comprehensive scientific device in the life sciences. All these have laid a solid foundation for further development of China’s basic research. China has successfully isolated the world’s first strain of the novel coronavirus, completed the genome sequencing of the virus, developed a great number of clinical drugs, testing equipment and reagents as well as vaccines. Science and technology have played a key role in the prevention and control of COVID-19 pandemic.

(II) New breakthroughs in the fields of strategic high technology

China has advanced the deployment of a series of major scientific and technological tasks, and actively sought the commanding heights of science and technology in the deep-sea, deep-space, deep-earth, deep-blue and other fields, shifting from following others to keeping pace and even leading the pack in some areas, providing important support and strong driving force for industrial transformation and upgrading and high-quality economic development. The new generation of carrier rocket has made its maiden flight; the "Tianhe" core module of the Chinese Space Station was successfully launched; the Shenzhou 13 manned spacecraft and the "Tianhe" core module achieved radial rendezvous and docking for the first time; the Chinese Space Station entered into a full-scale construction phase. The Tianwen-1 rover successfully landed on Mars, and the Zhurong rover roamed on Mars. The "Striver" manned submersible completed a 10,000-meter sea trial; the "Haidou-1" unmanned submersible refreshed its record of dive depth; the Beidou navigation system became fully operational; the "Guohe One" and "Hualong One" third-generation nuclear power technology made new breakthroughs; the first self-developed aircraft carrier was commissioned, and the Fujian Aircraft Carrier was launched. China’s self-developed large civil aircraft C919 made its first flight; the Hong Kong-Zhuhai-Macau Bridge was opened; China’s high-speed railway set world records for the highest operating speed and lowest operating temperature, and the 600 km/h high-speed magnetic levitation system was successfully launched.

(III) Accelerated pace of tech commercialization

With the increasing protection of intellectual property rights, continuous improvement of the mechanism for the application of innovation achievements, and the substantial increase of patent applications and licenses, the transformation of scientific and technological innovation achievements into practical productive forces has accelerated, releasing the sustained driving force for innovation and development. More and better intellectual property achievements have been made. In 2021, the number of patent licenses in China hit 4.601 million, an increase of 2.7 times compared with 2012, with an AAGR of 15.5%; as of end 2021, the number of valid patents hit 15.421 million, an increase of 3.4 times compared with the end of 2012. According to the World Intellectual Property Organization, in 2021, the number of international patent applications submitted by Chinese applicants through the PCT was 69,500, ranking first in the world for three years in a row. By the end of 2021, there were 7.5 high-value invention patents per 10,000 persons, an increase of 4.5 compared with the end of 2016. Sustained economic benefits can be found in the application of intellectual property rights. In 2020, the added value of patent-intensive industries reached RMB 12.13 trillion, accounting for 11.97% of GDP, an increase of 0.37 percentage points over 2018.

(IV) Emerging digital economy

Having implemented development strategies for the digital economy, improved digital infrastructure, activated the potential of data elements, and vigorously promoted digital industrialization and industrial digitization, China has made major breakthroughs in the development of the digital economy, providing a strong driving force for sustained and sound economic and social development. In 2020, the added value of China's core digital economy industries accounted for 7.8% of GDP, with the total output of digital economy leaping to the second place in the world. China has led the world in information infrastructure construction, and has built the world's largest 5G network. As of end 2021, China had deployed and opened a total of 1.425 million 5G base stations, accounting for more than 60% of the world. Accelerating integration of digital technology and various industries and booming e-commerce have boosted the growth of sharing economy and platform economy. According to the China Sharing Economy Development Report (2022), China's sharing economy transaction scale reached around RMB 3,688.1 billion in 2021, up about 9.2% from a year earlier. Accelerated steps have been taken toward digital transformation of industry, continuously improving the digitalization level of production equipment of industrial enterprises, and more enterprises have been on the "cloud". At present, China has cultivated more than 100 industrial Internet platforms with industrial characteristics and regional influence, connecting more than 76 million industrial machines, and bringing together more than 590,000 industrial APPs.

IV. Decisive Achievements in Building an Innovation-driven Country, with an Increasingly Supportive Role of Innovation in Advancing Socio-economic Development

Since the 18th CPC National Congress, solid progress has been made in building an innovation-oriented country to strengthen innovation as the primary driver of development, promote the transformation of the economic development model from being factor-driven to innovation-driven, so as to empower high-quality development with innovation and effectively improve people's livelihood. China has become one of the innovative countries and an increasingly important pole in the global innovation landscape.

(I) Giant leaps achieved in innovation, competitiveness, and sustainable development

Remarkable results have been achieved in innovation-driven development, and China has gradually embarked on an innovation-driven journey of development to build a country not only strong in talents and science and technology, but also in industries, economy and the country are strong. Higher rankings have been continuously achieved in innovation index and international competitiveness. In 2021, China’s innovation index ranked 12th in the world, up 22 places from 2012, ranking first among middle-income economies. In 2019, China ranked 28th among 141 countries and regions in terms of competitiveness, ahead of most middle-income countries. The capacity for sustainable development has been greatly improved. In 2021, China’s Sustainable Development (SDG) Index hit 72.1, ranking 57th globally, up 14 places from 2017.

(II) Innovation increasingly driving economic transformation

By insisting on the central task of improving the quality and efficiency of economic development, accelerating the construction of a modern economic system, and striving to promote quality change, efficiency change and power change, China's economic development has changed from relying mainly on a large number of input and expansion of factors to relying mainly on innovation-driven, higher-quality growth with scientific and technological progress, labor quality improvement and management innovation. The contribution of scientific and technological progress has increased significantly. The contribution of scientific and technological progress to China’s economy increased from 52.2% in 2012 to over 60% in 2021, and the contribution of agricultural technological progress to China’s economy grew from 53.5% to over 60%. With solid progress in structural adjustment, transformation and upgrading, improvement has been made in the quality of workers, as well as the innovation ability and management skill, gradually moving the industrial chain to the medium-high end, and continuously improving the labor productivity. In 2021, total labor productivity (at 2020 prices) hit RMB 146,380 per person, 80.3% higher than in 2012, with an AAGR of 6.8%, and 0.2 percentage points higher than the AAGR of GDP. With the deepening of the supply-side structural reform, the new economy has gradually increased its share in the national economy and become an important engine of economic development. In 2021, the added value of the "three new" economy was RMB 19,727.0 billion, accounting for 17.25% of GDP, an increase of 1.88 percentage points over 2016.

(III) Innovation empowering social governance and livelihood improvement

By comprehensively promoting the penetration of scientific and technological achievements into the social and livelihood fields, the strong spillover effects of innovative development have become evident, greatly improving social governance and people's quality of life. As digital government, digital society, digital villages, smart cities, and "Internet Plus Government Services" are gaining popularity, new administrative service models such as "processing at a single portal", "without the need for a second visit", with "one network unified management", and "one network collaboration" have been widely applied, and China's online government service has leaped to the global leading level. With the national government affairs service platform as its main hub, the national integrated government affairs service platform covers 1,376 government affairs services of 46 State Council departments, and has direct access to more than 5.48 million local government affairs services of 31 provinces (autonomous regions and municipalities directly under the Central government) and the Xinjiang Production and Construction Corps. China has taken the lead in image recognition and voice recognition in the world, pioneered the large-scale application of 5G mobile communication technology, occupied most of the global market share of consumer-grade drones, accelerated the promotion of new ways of production and life such as mobile payment, online ordering, online car hailing, smart home, etc. Increasingly, innovation has become a powerful leader in the transformation of production and life style. In 2020, the rate of mobile payment in China reached 86%, ranking the first in the world and 2.5 times the world average.

Overall, since the 18th CPC National Congress, the implementation of China's innovation-driven development strategy has been accelerated, featuring a more sound innovation system, a more optimized innovation environment, more solid support for innovation factors, and a deeper integration of the innovation chain and industrial chain, which has provided strong support for creating a new development pattern and promoting high-quality development. At the same time, it is necessary to note that there are still shortcomings in China's original innovation, and the problem that innovation capacity can't meet the requirements of high-quality development is still prominent. For the next stage, we should adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully, accurately and comprehensively implement the new development philosophy, adhere to the central position of innovation in the overall development of China's modernization, take self-reliance and self-improvement in science and technology as the strategic support for national development, deeply implement the strategy for invigorating China through science and education, the workforce development strategy, and the innovation-driven development strategy, accelerate the cultivation and growth of new growth drivers, and provide lasting and powerful momentum support for the great rejuvenation of the Chinese nation.