On June 22, 2024, the Macro-Finance Salon (No. 231) was successfully held in Beijing, co-hosted by the Institute of Advanced Social Sciences (Shenzhen) of Renmin University of China and the Party School of the CPC Bao’an District Committee of Shenzhen, and co-organized by the International Monetary Institute (IMI) of RUC and the Institute of Advanced Financial Studies (Shenzhen) of Renmin University of China. This event also marked the first lecture in the Social Science Salon Series of Ten Lectures on “New Quality Productive Forces and High-Quality Development in the Greater Bay Area” of Shenzhen Research Institute of RUC. The theme of this session focused on “Unleashing New Quality Productive Forces and Building an International Innovation Center in the Greater Bay Area.”

Le Xia, Chief Economist for Asia-Pacific at BBVA, delivered a keynote speech. Zaiping Yang, Secretary-General of the Asian Financial Cooperation Association and Former Executive Vice President of the China Banking Association, Qing He, Deputy Director of Monetary Finance Department of RUC, Taihui Zhu, deputy director of the Institute of Economic Development at JD.com, and Yongjia Lin, Department Head in Accounting & Finance/ Macao University of Science and Technology, attended and participated in discussions at this salon. Ke Song, Executive Vice President of the Shenzhen Research Institute at Renmin University of China and Executive Dean of the Institute of Advanced Social Sciences (Shenzhen) of Renmin University of China, presided over the meeting.

The conference centered on the theme “Unleashing New Quality Productive Forces and Building an International Innovation Center in the Greater Bay Area”, focusing on key areas such as technological innovation, industrial transformation and upgrading, and financial support. Attendees emphasized the importance of new quality productive forces, highlighting that its core lies in technological breakthroughs, innovative allocation, and industrial upgrading. The crucial role of finance in supporting new quality productivity was stressed, calling for the promotion of the commercialization of technological achievements and the resolution of financing issues for technology enterprises. Strategies for achieving a high-level cycle of “technology-industry-finance” were proposed. This salon provided new ideas and implementation paths for the high-quality development of the Greater Bay Area and is expected to have a profound impact on related policies and practical operations.

Key viewpoints of the attendees are as follows:

Keynote Speech

Le Xia, Chief Economist for Asia-Pacific at BBVA

Comprehensive Analysis of New Quality Productive Forces

First, the definition and importance of New Quality Productive Forces. Le Xia first emphasized the concept of new quality productive forces, pointing out that it is an advanced productivity driven by innovation, breaking away from traditional economic growth methods, and characterized by high technology, high efficiency, and high quality. He further emphasized that the future growth of China’s economy will largely depend on the development of new quality productive forces.

Second, the core elements of new quality productive forces. He provided a detailed explanation of the core elements of new quality productive forces, including revolutionary technological breakthroughs, innovative allocation of factors of production and deep industrial transformation and upgrading. He particularly noted that the combination of innovation and total factor productivity is key to the development of new quality productive forces.

Third, strategies to promote the development of new quality productive forces. Five strategies were proposed to accelerate the development of new quality productive forces, including vigorously promoting technological innovation, using technological innovation to drive industrial innovation, focusing on promoting innovation in development methods, solidly advancing institutional and mechanism innovation and deepening the innovation of talent work mechanisms. These strategies aim to comprehensively enhance new quality productive forces.

Fourth, the relationship between technological innovation and total factor productivity (TFP). He explored the relationship between technological innovation and TFP, noting that though technological innovation is crucial for enhancing total factor productivity, micro-level innovation activities do not necessarily translate automatically into macro-level total factor productivity improvements. He emphasized that while promoting technological innovation, it is also necessary to pay attention to the macro-level changes in total factor productivity.

Fifth, the trends in China’s total factor productivity. By citing Professor Xiaodong Zhu’s research, he demonstrated the trends in China’s total factor productivity and pointed out that China’s economic growth largely depends on the improvement of total factor productivity. He also specifically mentioned the recent slowdown in China’s total factor productivity and analyzed the underlying reasons.

Guest Panel Discussion

Zaiping Yang, Secretary-General of the Asian Financial Cooperation Association and Former Executive Vice President of the China Banking Association

The Dual Dimensions of New Quality Productive Forces and Technological Content

Zaiping Yang pointed out that conceptually, explaining new quality productive forces needs to be based on the three elements of productivity and should not be generalized or trivialized. He believes that new quality productive forces can be understood from two dimensions: quantitative state and qualitative state. The “quantitative state” refers to the three elements of productivity and their technological content. When the technological content reaches a certain level, quantitative changes cause qualitative changes, forming new quality productive forces. The technological contribution rate to GDP can be used as a reference. The “qualitative state” refers to new forms such as information, data, and even programming code. These new forms are either embedded in the three elements of productivity or exist independently, increasingly becoming a part of new quality productive forces.

He emphasized that science and technology, as the potential primary productive forces, can only become a quantitative state indicator of new quality productive forces when transformed into actual productive forces. Therefore, attention should be paid not only to the supply of basic to applied science and technology but also to the transformation of scientific and technological achievements into actual productive forces. Yang cited the “Needham Question”, pointing out that although ancient China made significant contributions to technological development, the efficiency of transforming scientific and technological achievements into actual productive forces was low, which remains an issue today. He believes that solving this problem relies on the entrepreneurial community to discover and realize market opportunities and the financial system’s role in allocating resources across time and space. Both aspects are anticipated to be pioneered in the Greater Bay Area.

He also mentioned that Total Factor Productivity (TFP), as a macro quantitative indicator of new quality productive forces, deserves attention. Over the past forty years of reform and opening up, China’s rapid economic growth has been driven by the dual engines of capital accumulation and TFP growth, with an average annual TFP growth rate of 4.35% and a contribution rate of 42.67% to economic growth. However, since 2009, the average annual growth rate of TFP has fallen below 2%, and its contribution to economic growth has dropped below 30%. This serves as a warning that it is necessary to vigorously develop new quality productive forces to reverse the downward trend and ensure that the TFP growth rate reaches 2.5% to 3% to achieve a high-quality growth rate of around 5%.

Finally, he emphasized that the new quality production relations corresponding to new quality productive forces also need to be taken into account. With a significant increase in the organic composition of capital, the variable capital of individual capital (capital used to purchase the living labor of workers) is nearing zero, while the constant capital (capital used to purchase accumulated past labor) is maximized, and its technological content is also maximized. This requires a reassessment of political economics issues such as the labor theory of value and the theory of surplus value. He believes that new quality productive forces is closely related to constant capital with increasing technological content, and capital cannot be simply demonized. Especially at the primary stage of socialism, capital still plays an important role.

Qing He, Deputy Director of Monetary Finance Department of RUC

The Core of New Quality Productive Forces and Financial Support

Qing He believes that new quality productive forces needs further theoretical elucidation. Its core consists of three parts: first, innovative breakthroughs; second, the recombination of traditional production factors to enhance efficiency; and third, alignment with the country’s new development concepts, including green development and common prosperity. New quality productive forces involves not only the improvement of TFP but also deeper connotations, such as the development requirements of green growth and common prosperity. Traditional production factors, through the combination of digitalization and new technologies, achieve significant improvements in production efficiency, which is also an important manifestation of new quality productive forces.

The role of finance in new quality productive forces is particularly important. Looking back at the industrial revolutions in history, each significant improvement in productivity was accompanied by transformations in the financial markets. From the evolution of hard technology to soft technology, the financial market needs to develop at multiple levels to support different types of innovation. The banking system should support hard technologies such as high-end manufacturing, while the capital markets and PE/VC should support highly innovative soft technologies. China needs to balance the development of both soft and hard technologies, establish a multi-level capital market and promote the transformation of technological achievements into productivity.

At the same time, the development of new quality productive forces requires strengthened financial regulation to avoid systemic risks and achieve an ideal productivity environment. Financial support for the innovation process should avoid a one-size-fits-all approach and ensure that financial capital can effectively drive the development of new quality productive forces through a multi-level financial market. The enhancement of new quality productivity involves not only improvements in technology and efficiency but also the overall advancement aligned with the country’s new development philosophy.

Taihui Zhu, deputy director of the Institute of Economic Development at JD.com

Promoting High-Level Cycles of “Technology-Industry-Finance” for the Development of New Quality Productive Forces

Taihui Zhu believes that promoting the development of new quality productive forces hinges on achieving high-level cycles of “technology-industry-finance”, which is reflected in four main aspects:

Firstly, the development of new quality productive forces ultimately aims to improve TFP. This should be understood through three driving factors including technological innovation breakthroughs, innovative allocation of factors and industrial transformation and upgrading, three main characteristics including high-tech, high-quality and high-efficiency, three implementation paths including upgrading traditional industries, developing new future industries and advancing the digital economy, three transformation targets including workers, means of labor and objects of labor, and three supporting elements including education, technology, and talent.

Secondly, the development of new quality productive forces is in line with the digital and intelligent transformation, requiring an accelerated integration of digital and real economies. The development of new quality productive forces should drive industrial innovation through technological innovation, particularly by fostering new industries, models, and products with revolutionizing and cutting-edge technologies. The focus is on accelerating strategic emerging industries and future industries, which need the support of digital and intelligent transformation, as this integration has an inherent consistency.

Thirdly, the key to the development of new quality productive forces lies in promoting technological innovation, which requires accelerating the integrated development of large, medium and small enterprises. It is particularly important to leverage the leading role of large enterprises, technology companies, and platform enterprises in driving the digital transformation of a broad range of small and medium-sized enterprises. This, in turn, promotes “integrated innovation” in innovation chains, industrial chains, supply chains, data chains, capital chains, service chains and talent chains.

Fourthly, the development of new quality productive forces cannot be achieved without financial support. This necessitates optimizing the financing structure and developing digital finance. On one hand, efforts should be made to significantly increase the proportion of direct financing, especially equity financing, to address the issues of mismatched financing models and terms that technology innovation faces. On the other hand, the use of digital technology to innovate financial service models should be promoted to facilitate the integrated development of financial services with technological and industrial innovation.

Yongjia Lin, Department Head in Accounting & Finance/ Macao University of Science and Technology

Synergistic Promotion of Macao’s New Quality Productive Forces and Diversification Policies

Yongjia Lin pointed out that in Macao, the mention of new quality productive forces is primarily to align with the government’s policy of moderate diversification. The Macao government has proposed a policy of moderate diversification known as “1+4” policy, focusing on developing the world tourism and leisure center while enhancing four emerging industries: healthcare, modern finance, high-tech, and convention and exhibition trade, as well as cultural and sports activities.

In Macao, new quality productive forces is primarily applied within the framework of diversification policies, focusing on two dimensions. From a financial perspective, addressing financing issues is crucial in developing new quality productive forces. When providing financing functions, financial institutions not only provide financial support for technological innovation but also offer feasible solutions for research and development investment and market promotion for technology enterprises, including the establishment of special funds, particularly aimed at financing intellectual property or funding for research and development projects.

Another dimension involves enhancing the monitoring of commercial banks’ credit service capabilities for science and technology enterprises, emphasizing on refining the criteria for identifying science and technology enterprises and categorizing them accordingly. Once these criteria are detailed, unified and operational standards can be provided for policy support. This includes promoting project pre-loans, intellectual property pledge loans, loans for technological innovation research and development, loans for industrial park development, and loans for technology transfer. The goal is to guide more financial resources towards innovative enterprises, meeting their diversified needs.

Currently in Macao, there are issues of insufficient quality and challenges in technology transfer regarding new quality productive forces. Suggestions have been made for entrepreneurs to assist in transformation and advocate for improving the feasibility of policies and regulations.

The themed salon “Unleashing New Quality Productive Forces and Building an International Innovation Center in the Greater Bay Area” brought together experts and scholars to deeply explore key issues related to the construction of the Greater Bay Area and the unleashing of new quality productive forces. Participants engaged in extensive discussions and exchanges on the role of the Greater Bay Area in promoting innovation and industrial upgrading, the necessity of policy support and strategic directions for future development. The outcomes and discussions of the salon provide new insights and implementation pathways for promoting high-quality development in the Greater Bay Area and the implementation of new quality productive forces. They are expected to have profound and positive impacts on policy formulation and practical operations in related fields.