Key Talks in 1992, Court Cases in 2024, and
“New Quality Productive Forces”†
Table of Contents
- “New Quality Productive Forces” and the Third Plenary Decision
- “New Quality Productive Forces” and Deng Xiaoping’s Talks in 1992
- “New Quality Productive Forces” and Five Typical Cases in 2024
Estimated Reading Time
- 6 min
Coined by President XI Jinping in 2023, the term “new quality productive forces” is of great significance because related reforms—with specific reference to venture capital, private equity, and other types of investment—have been identified by the Chinese leadership. Key talks given in 1992 by the late reformist leader DENG Xiaoping and select court cases recently released by the Supreme People’s Court help illuminate the meaning of the term. In addition, actions taken by the courts in these cases to support the development of “new quality productive forces” allow investors to better assess opportunities arising from such development.
“New Quality Productive Forces” and the Third Plenary Decision
“The term ‘new quality productive forces’ was first introduced by President Xi in September 2023, when he visited Heilongjiang, […].”
The term “new quality productive forces” was first introduced by President Xi in September 2023, when he visited Heilongjiang, a northeastern province in China that has for decades served as an important base for the country’s traditional industries such as coal, lumber, machinery, and petroleum. While recognizing Heilongjiang’s efforts, the president urged the province to “accelerate the upgrading of traditional manufacturing industries” and to “integrate resources for scientific and technological innovation to lead the development of strategic emerging industries and future industries so as to accelerate the formation of new quality productive forces [emphasis added].”
On July 18, 2024, China’s top leaders met at the third plenary session of the 20th Central Committee of the Communist Party of China to adopt a decision (“Third Plenary Decision”; for more details, see this article), in which the “Improvement of the System and Mechanism for Developing New Quality Productive Forces in Accordance with Local Conditions [emphasis added]” is identified as one of the reform tasks that needs to be completed by 2029. To complete this reform task, China, according to the Third Plenary Decision, plans to take multiple actions, such as the following:
- “Promoting revolutionary breakthroughs in technology and innovative allocation of production factors to […] give birth to new industries, new models, and new driving forces so as to develop productive forces characterized by high technology, high efficiency, and high quality”;
- “Supporting enterprises to transform and upgrade traditional industries with digital intelligence technology and green technology”;
- “Improving relevant rules and policies to […] promote the aggregation of various advanced production factors towards the development of new quality productive forces”; and
- “Encouraging and regulating the development of angel investment, venture capital, and private equity investment as well as leveraging in a better way the function of government investment funds to develop ‘patient capital’”.
All these details help substantiate the term “new quality productive forces”. However, the exceptional significance of these forces cannot be fully appreciated without understanding the context rooted in key talks given by Deng Xiaoping in 1992.
“New Quality Productive Forces” and Deng Xiaoping’s Talks in 1992
In early 1992, amidst growing concerns about the future of socialism in China after the collapse of the Soviet Union and drastic changes in Eastern Europe, Deng Xiaoping, who boldly led China onto the path of reform and opening up in the late 1970s, dispelled these doubts by giving key talks during his visits to a few cities in southern China, including Shenzhen, a special economic zone created by him.
Deng attributed the rapid growth of Shenzhen at the time—which has continued to grow to become China’s high-tech hub today—to socialism. He explained that the essential difference between socialism and capitalism does not lie in whether there is “more planning or more market”. In his words, “planning and the market are both economic means. The essence of socialism is to liberate productive forces and develop productive forces so as to […] ultimately achieve common prosperity [emphasis added]”. To highlight the significance of “productive forces”, Deng explained that a crucial standard used to evaluate the performance of certain work is to decide whether the work is conducive to the development of productive forces in society.
Deng’s insights were praised by President Xi last Thursday, which marked the 120th birthday of the late reformist leader. President Xi summarized Deng’s main insights about socialism and productive forces in this way: “planning and the market are both economic means; they can be used as long as they are beneficial to the development of productive forces”.
“With the above context, one can better comprehend President Xi’s own explanation of the term ‘new quality productive forces’, […].”
With the above context, one can better comprehend President Xi’s own explanation of the term “new quality productive forces”, as presented in January 2024:
[…] Productive forces are the fundamental driving forces for the development of human society, […].
[…] innovation plays a leading role in new quality productive forces, which are characterized by high technology, high efficiency, and high quality […]. [These forces] were born out of revolutionary breakthroughs in technology, innovative allocation of production factors, and in-depth industrial transformation and upgrading […].
[emphasis added]
The above content is largely reflected in the Third Plenary Decision regarding new quality productive forces, as analyzed in the preceding section.
“New Quality Productive Forces” and Five Typical Cases in 2024
Less than a month after the adoption of the Third Plenary Decision, the Supreme People’s Court released five Typical Cases (i.e., cases with referential value, as explained in this article) to show how the Chinese judiciary helps develop “new quality productive forces in accordance with local conditions”.
One case is illustrative. The case concerns judicial mediation of a contractual dispute facing a traditional automobile company in Harbin, the capital city of Heilongjiang, in the course of its green and low-carbon transformation. With multiple well-recognized green innovations, the automobile company was perceived as a key contributor to the revitalization of Northeast China and the growth of green economy in the region. As a result, the court actively facilitated judicial mediation of the dispute to enable the company to have more time to pay the amounts stipulated in the contract, helping sustain the long-term success of the company.
Such a proactive judicial approach is expected to become quite common in the coming years as the Chinese judiciary feels obligated to help develop “new quality productive forces” in accordance with the Third Plenary Decision. Investors of green technology and other innovations in China should take this favorable judicial approach into account in their assessment of investment opportunities related to “new quality productive forces”.
- The citation of this article is: Dr. Mei Gechlik, Key Talks in 1992, Court Cases in 2024, and “New Quality Productive Forces”, SINOTALKS.COM®, In Brief No. 47, Aug. 28, 2024, https://sinotalks.com/inbrief/202408-english-new-quality-productive-forces.
The original, English version of this article was edited by Nathan Harpainter. The information and views set out in this article are the responsibility of the author and do not necessarily reflect the work or views of SINOTALKS®. ↩︎
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