Maintaining Firm Commitment to Promoting High-Quality Economic and Social Development

At the third plenary session of the 20th Central Committee of the Communist Party of China (CPC), General Secretary Xi Jinping delivered a keynote speech in which he set out plans and arrangements for furthering comprehensive reform to advance Chinese modernization. It also provided an analysis of the developments and tasks before us at present. This address will serve as a fundamental basis and practical guide for our efforts to leverage deeper reform in driving high-quality economic and social development.

I. China’s major achievements in economic and social development

Since the 18th CPC National Congress in 2012, under the strong leadership of the CPC Central Committee with Xi Jinping at its core, all regions across the country and central departments have actively worked to tackle difficulties head-on by deepening reform and opening up and strengthening macro regulation. By responding effectively to risks and challenges, we have secured historic achievements and changes in China’s economic and social development. 

This year, in the face of grave and intricate developments on the international stage, as well as formidable tasks in promoting reform, development, and stability at home, all regions and departments have remained committed to pursuing social and economic progress while ensuring stability and enhancing stability by securing progress, all on the basis of adopting new policies and measures before abolishing the old. We have taken coordinated steps to expand domestic demand and deepen supply-side structural reform, promote new urbanization and rural revitalization, and ensure both high-quality development and greater security. Overall, these efforts have helped sustain steady economic development while also ensuring progress. With new growth drivers and strengths quickly taking shape, we have been able to make solid gains in promoting high-quality development.

Stable macroeconomic performance 

We have taken robust and effective steps to implement existing macroeconomic policies and worked steadily to improve the consistency of our macroeconomic policy orientation. We have frontloaded the implementation of macro policies, taken ongoing steps to steadily boost policy support, and worked to foster greater policy synergy. Between 2012 and 2023, China’s GDP rose from 54 trillion yuan to 126 trillion yuan, expanding at an average annual rate of 6.1%, with China’s average contribution to world economic growth exceeding 30%.

A staff member in a smart production workshop at a fastener manufacturing facility in Handan City, Hebei Province, August 16, 2024. Since 2012, China’s manufacturing sector has increased its global market share from 22.5% to around 30%, as a result of both quantitative and qualitative improvements. PHOTO BY XINHUA REPORTER WANG XIAO

This year, the government has steadily strengthened countercyclical economic measures. It issued 1 trillion yuan in ultra-long-term special treasury bonds to support the implementation of major national strategies and security capacity-building in key sectors. Around 300 billion yuan of funds raised from ultra-long-term special treasury bonds have also been used to bolster support for large-scale equipment upgrades and trade-in schemes for consumer goods. Thanks to the implementation of consumption policies to boost people’s wellbeing, we have ensured a steady rise in spending on culture and tourism as well as faster development of new consumption scenarios. Central government budget investment funds and local government special-purpose bonds have also been used to effectively stimulate private investment. 

As a result, in the first half of this year, China’s economy was able to withstand downward pressure to maintain overall stability and achieve improvement. GDP grew at a rate of 5%, one of the fastest growth rates among the world’s major economies.

Continued growth in innovative vitality 

Since 2012, China has experienced rapid growth in the areas of science and technology. The ratio of R&D investment to GDP has risen from 1.91% to 2.64%, and China has climbed from 34th to 12th place on the Global Innovation Index rankings. 

By promoting the industrial application of scientific and technological advances, we have accelerated the development of new quality productive forces. By the end of 2023, China was home to about 4.02 million valid domestic invention patents (not including Hong Kong, Macao, and Taiwan), becoming the first country to pass the 4 million mark. This has resulted in a raft of major scientific and technological advances coming on stream. China’s first domestically-made airliner, the C919, and its first homegrown large cruise ship have entered commercial service. Following a successful launch, the Tiangong space station continues to operate smoothly, and the Chang’e-6 robotic probe completed the first mission in history to bring back rock samples from the far side of the moon. Indeed, more and more new growth drivers are becoming the engines of the economy, thanks to the development and expansion of strategic emerging industries as well as the rapid growth of digital technologies, such as artificial intelligence, cloud computing, and 5G.

Adjustments and improvements to the industrial structure 

Agricultural production has remained largely stable. Annual grain output has stayed above 650 million metric tons for nine consecutive years, and an abundant supply of important food-basket products, such as meat, eggs, milk, vegetables, and fruits, has been maintained. 

China has both expanded and upgraded its manufacturing sector. With our global manufacturing share rising from 22.5% to around 30%, we have remained the world’s leading manufacturer for 14 years running. Notably, the contribution of high-tech manufacturing to the total added value of large industrial enterprises has increased from 9.4% to 15.7%. In the first seven months of this year, the output of alternative energy vehicles, generator sets, smartphones, and industrial robots all grew, rising by 32.9%, 19.8%, 10.6%, and 7.9%, respectively. 

In the services sector, a steady rate of growth has been maintained, with value added rising from 45.5% to 54.6% as a share of GDP. Producer services have expanded rapidly, allowing us to unlock greater potential for services consumption.

Deepening of reform and opening up 

Fresh progress and gains have been secured in reforms in key areas and at critical links. We have reinforced the core functions and competitiveness of state-owned enterprises (SOEs) and made concrete strides in developing a unified national market. In the private sector, a trend of steady improvement has been sustained. As of the first half of this year, there were more than 55 million registered private enterprises in China, representing a 4.1-fold increase from the end of 2012. 

China remains a world leader in terms of both inbound and outbound investment; among developing countries, it is the top recipient of foreign investment. In the first seven months of this year, foreign investment in China remained strong, with more than 31,000 new foreign-invested enterprises setting up nationwide. To drive high-quality cooperation under the Belt and Road Initiative, we have pursued deeper and more productive cooperation with our partners. Direct investment from China in countries along the Belt and Road has exceeded US$280 billion, and the China-Europe Railway Express has, to date, completed over 90,000 trips.

Coordinated development between regions and between urban and rural areas 

Systematic strides have been made in advancing major regional strategies. The Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area have grown into important engines of high-quality development. Meanwhile, in Xiong’an New Area, rapid progress has been made on projects to absorb functions nonessential to Beijing’s role as our nation’s capital. The Yangtze River Economic Belt and the Yellow River Basin have ramped up regional coordination on green development, and fresh gains have been made in environmental protection and restoration in our country’s key river basins. 

We have further refined the policy frameworks for supporting large-scale development of the west, revitalization of northeastern China, the rise of the central region, and trailblazing development in the eastern region. We have launched a five-year action plan for implementing the new people-centered urbanization strategy. As part of this, we have relaxed policy restrictions on the transfer of household registration, with the result that the share of permanent urban residents in the total population has risen from 53.1% to 66.16%. Major efforts have been made to implement work-relief programs and schemes to promote purchases of products from less developed areas. We have also consolidated and built on our achievements in poverty alleviation by promoting rural revitalization.

Accelerated efforts for a green transition 

We have made a concerted drive to simultaneously cut carbon emissions, reduce pollution, expand green development, and pursue economic growth. In line with this, guidelines have been issued on accelerating the green transition across all areas of economic and social development. We have pushed forward with the critical battle to prevent and control pollution and have taken steps to improve the governance and protection of our ecosystems. Since 2012, China has achieved average annual economic growth of 6% based on an average increase of 3.3% in energy consumption. This has enabled us to achieve a cumulative reduction in energy intensity of 26.1%, one of the fastest rates of reduction worldwide. 

In 2023, the average concentration of PM2.5 in cities at and above the prefectural administrative level across China fell to 30μg/m³. This has enabled China to achieve the fastest improvement in air quality of any country in the world. Since 2012, the percentage of China’s surface water meeting Grade III or higher in the nation’s five-tier water quality system has increased by 27.8 percentage points, reaching quality levels comparable to developed countries. With forest coverage topping 24%, China has become a global leader in both forest growth rate and total cultivated forest area. It now accounts for about one-fourth of the world’s newly created green spaces. In terms of renewable energy, China is also leading the way with regard to both total installed capacity and the rate of new installations. In 2023, renewables accounted for over 50% of China’s total power generation capacity, while the country accounted for more than half of all new renewable energy installations worldwide.

Major efforts to ensure people’s wellbeing

Thanks to a nationwide battle against poverty, China successfully eliminated absolute poverty, solving an issue that plagued the nation for millennia. This success paved the way for us to finish building a moderately prosperous society in all respects. 

By fully and effectively implementing the employment-first policy, we have ensured overall employment stability. Since 2013, 13 million new urban jobs have been created each year on average. In the first half of this year, 6.98 million new jobs were added, and the average surveyed urban unemployment rate stood at 5.1%. Personal income has grown faster than the economy as a whole. After adjusting for inflation, per capita disposable income increased by 94% between 2023 and 2012. Furthermore, the urban-rural personal income ratio decreased from 2.88:1 to 2.39:1, thanks to faster income growth in rural areas.

We have accelerated the implementation of public service policies and steadily enhanced the quality of basic public services, such as those for elderly care, childcare, education, medical care, and culture. No effort has been spared in our response to natural disasters such as regional droughts and floods. We have ensured the basic needs of affected populations are met and systematically moved forward with post-disaster recovery and reconstruction work.

Stronger foundations for secure development 

All regions and departments have resolutely implemented the CPC Central Committee’s decisions and plans for coordinating development and security. By ensuring mutual reinforcement between these two imperatives, we have laid stronger foundations for achieving secure development in the economic sphere. 

The foundations of food security are stronger than ever. We have achieved sound progress in new initiatives to boost grain production capacity by 50 million metric tons and accelerated the implementation of several major projects, including those for high-standard farmland development, chernozem soil protection, and the enhancement of the modern seed industry. We have also taken further steps to strengthen energy security. We have guaranteed our capacity to meet peak energy needs during summer and winter and rapidly expanded the installed storage capacity for new forms of energy. 

The resilience and security of industrial and supply chains is steadily improving. We have sped up the implementation of research projects on major technological equipment and made concrete progress in developing core technologies in key fields. We have also continued to enhance our data security capacity. We have made forward-looking moves to develop digital infrastructure and accelerated progress on establishing a national integrated computing system.

II. The current circumstances and favorable conditions for promoting high-quality economic and social development

At present, profound, all-encompassing changes of a kind unseen in a century are accelerating worldwide. In China, meanwhile, we are grappling with the pronounced problem of unbalanced and inadequate development. We should recognize, however, that such issues and pressures are a natural part of the process of development and progress. In terms of the growth rate and development momentum, China is much better placed than other major developed economies. The underlying trend of economic recovery and long-term growth remains unchanged for us, as does our economy’s tremendous resilience and potential. As a result, the favorable conditions for high-quality economic and social development in China outweigh any unfavorable factors that may exist. 

Dual-motor drive systems for alternative energy vehicles are displayed at the 2024 World Power Battery Conference in Yibin City, Sichuan Province, September 1, 2024. The exhibition, held from August 31 to September 2, showcased the latest achievements from the power battery industry and supply chains. PHOTO BY XINHUA REPORTER TANG WENHAO

On the international stage, challenges and opportunities exist side by side

On the one hand, the external environment, which has grown more complex, grave, and uncertain, is having an increasingly negative impact. Global economic momentum remains weak. The International Monetary Fund recently predicted growth of 3.2% for 2024 and 3.3% for 2025, well below the pre-Covid-19 average of 3.8% from 2000 to 2019. Global economic and financial volatility could potentially worsen, as some emerging market nations face escalating pressures from currency depreciation, capital outflows, and rising debt levels. Geopolitical instability is being driven by intensifying rivalries between major countries and the frequent outbreak of local conflicts and upheaval, all of which are creating more spillover effects.

On the other hand, the global economy is showing signs of recovery, and international trade is rebounding. This will help Chinese companies leverage their advantages to broaden their international market presence. The World Trade Organization projects that global merchandise trade volume will grow by 2.6% in 2024, rebounding from its decline in 2023, and reach growth of 3.3% in 2025. Emerging economies are demonstrating strong development momentum and growing into important engines for the world economy. Their influence and voice in global governance also continue to grow. High-quality cooperation under the Belt and Road Initiative has delivered concrete progress, and China’s circle of friends continues to expand. By working with Belt and Road partners to enhance connectivity and deepen mutually beneficial cooperation, we have helped inject fresh momentum into both partner economies and the global economy as a whole.

At the domestic level, we are seeing both pressure and momentum 

On the one hand, we are confronted by both aggregate issues and structural challenges, which require us to improve both the quality and effectiveness of development. We face inadequate effective demand, constraints on investment growth, difficulties in ensuring employment and boosting income, and an insufficient capacity and willingness to spend among consumers. The economy is showing signs of segmentation, as evidenced by uneven performance among industries. Specifically, many enterprises in traditional sectors are encountering significant difficulties and challenges. Bottlenecks are hindering domestic economic flows and limiting the movement of production factors. Furthermore, our ecological conservation efforts remain in a critical period marked by overlapping pressures and formidable tasks, while the foundation for green and low-carbon development requires further strengthening.

On the other hand, China continues to enjoy robust fundamentals and favorable conditions for achieving high-quality economic and social development. The key measures put forward by the 20th CPC Central Committee during its third plenary session in 2024 are focused on further deepening comprehensive reform. They will enable us to effectively address deep-seated institutional obstacles and structural challenges, further liberate and develop the productive forces, and continue providing the necessary drivers and institutional guarantees for advancing Chinese modernization. The advantages of China’s vast market are also becoming increasingly evident. China has a population of over 1.4 billion, with upwards of 400 million people in its middle-income bracket. It boasts the world’s most complete industrial system alongside an increasingly robust infrastructure network. With the rapid development of new quality productive forces, there remains significant space for meeting people’s needs for clothing, food, housing, transportation, and culture. There are still ample opportunities for investment in new industries, new arenas, and weaker areas and links. Going forward, coordinated progress in new industrialization and new urbanization will help ensure the sustained growth of domestic demand. 

Moreover, there remains sufficient space for further countercyclical adjustments, and the combination of macro policies has been improved to ensure greater effectiveness. Major initiatives are being fast-tracked, including those to support major national strategies and security capacity-building in key sectors, as well as large-scale equipment upgrades and trade-in schemes for consumer goods. As a result, ultra-long-term special government bonds, local government special-purpose bonds, and central government budget investment will all provide robust support for economic growth. Impressive progress has been made in pursuing green and low-carbon development. Our transition to green energy is advancing at a rapid pace, and the recycling rate for resources has markedly increased. All this is providing a solid foundation for more sustainable development.

Therefore, when analyzing the economic landscape, we must be able to see not only the individual trees but the forest as a whole. We should focus not just on the pattern of short-term fluctuations but also on the trajectory of long-term growth. China is indeed at a pivotal and challenging point in pursuing high-quality economic and social development where difficulties and obstacles abound. We are confronted with an external environment marked by transformation and turbulence, along with unavoidable growing pains, as we strive to enhance our industrial added value and restructure the economy. These are objective challenges that we cannot sidestep or escape. However, it is precisely by overcoming these difficulties, one after another, that we will enhance the quality and resilience of our economy; by navigating the challenges and cutting through the obstacles ahead, we will scale new heights of development.

III. Making solid progress in promoting high-quality economic and social development

Promoting high-quality development is the primary task in building a modern socialist country. To accomplish this task, we must adhere to the general principle of pursuing social and economic progress while ensuring stability, fully and faithfully apply the new development philosophy, move faster to create a new development dynamic, and further deepen comprehensive reform with a view to advancing Chinese modernization. Reform should be leveraged to ensure stable growth, make structural adjustments, and guard against risks. We must fully implement the decisions and arrangements of the CPC Central Committee on economic work and strive to effectively upgrade and expand China’s economic output.

Building a high-standard socialist market economy and continuing to enhance the vitality of all business entities

We will honor and act on the commitments to both the public and non-public sectors, ensuring that they complement each other and develop in tandem. Guidance will be issued on refining the layout of the state-owned economy and adjusting its structure. This will help SOEs strengthen functions related to strategic security, industrial leadership, the national economy, public wellbeing, public services, and other areas. A law on private economy promotion will be adopted, and refinements will be made to the systems and mechanisms for facilitating the participation of private entities in major national strategies. The modern corporate system with distinctive Chinese features will be improved, and efforts will be made to promote the formation of a number of world-class enterprises. 

We will do more to ensure smooth flows in the economy. We will provide guidance on building a unified national market, improve the implementation mechanism for competition policy, and fully enforce all policy measures on the regulation of local government practices for attracting investment. We eliminate local protectionism and market segmentation and carry out integrated pilot reforms on the market-based allocation of factors. The systems underpinning the market economy will be improved. This will see us bolstering the protection of property rights and intellectual property rights, updating the market access negative list, and working systematically to remove market access restrictions in the services sector. We will also improve the social credit system with Chinese features.

Improving the systems and mechanisms for promoting high-quality economic development and moving faster to develop a modern industrial system

We will develop new quality productive forces according to local conditions. We will move faster in planning for the industries of the future and establish a mechanism to ensure funding increases for these industries. We will initiate explorations in new arenas, such as quantum technology and life sciences, and launch an AI Plus initiative. We will also establish several zones to pioneer the development of tomorrow’s industries. 

We will work hard to develop and expand emerging industries. We will carry out national projects to create strategic emerging industry clusters, consolidate China’s competitive edge across the entire industrial chain for alternative energy vehicles, and foster high-growth gazelle and unicorn companies. Transformation and upgrading work will be accelerated in traditional industries. We will implement major technological upgrades and smart projects in manufacturing, execute an action plan for digital manufacturing, and rapidly scale up Industrial Internet applications. We will also deepen integration between advanced manufacturing and modern services. 

We will improve the systems and mechanisms for modern infrastructure construction and promote the digitalization of traditional infrastructure. To boost China’s strength in strategic science and technology, we will push for breakthroughs in core technologies in key fields and promote integrated advancements in technological and industrial innovation.

Improving the macroeconomic governance system and enhancing the implementation of macroeconomic policies 

We will improve the systems for national strategic planning and national economic and social development planning, to facilitate the implementation of the14th Five-Year Plan (2021–2025) and lay solid foundations for the 15th Five-Year Plan (2026–2030). Macro-policy coordination will be strengthened. We will enhance assessments to evaluate macro-policy consistency and ensure that fiscal, monetary, industrial, pricing, and employment policies work together effectively. We will enhance our system for managing expectations, communicate economic conditions and policies, and address market concerns and hot social topics. 

We will put ultra-long-term special government bonds to the best use possible by quickly implementing major national strategic projects and security capacity-building initiatives in key areas. We will ensure that project development is well aligned with the development of policies, planning, and mechanisms and coordinate the development of hard and soft infrastructure. We will push forward large-scale equipment upgrades and trade-in programs for durable consumer goods, while enhancing oversight and guidance over project implementation and the use of funds.

Building a complete domestic demand system and rolling out a range of measures to drive consumption and investment 

With consumption as a top priority, we will establish long-term mechanisms to drive consumer spending. We will nurture new consumer trends and scenarios, stimulate sales of goods such as automobiles and home appliances, and upgrade and expand services such as education, elderly care, childcare, and household services. We will actively promote the debut economy, boost consumption of trending China-chic products, and support the high-quality development of culture, sports, and tourism. 

Proactive efforts will be made to expand effective investment. To coordinate the effective use of all types of government investment, we will set up long-term mechanisms to support major public-benefit projects that are of fundamental importance and long-term value and accelerate the pace at which local government special-purpose bonds are issued and put to use. We will continue to expand our reserve of projects. We will move swiftly to identify a batch of key initiatives and major projects that are systemic, foundational, and strategic in nature and expedite preliminary preparations for such projects. A new public-private funding mechanism will be implemented, and we will continue to promote project investment opportunities to private investors. We will do a better job of attracting private capital to major infrastructure projects, particularly in sectors such as nuclear power and railways.

Boosting green and low-carbon development mechanisms and accelerating the green transition in all areas of economic and social development 

We will advance a coordinated transition to make industries greener and more digital and build out the clean energy and low-carbon sectors. While promoting cleaner and more efficient use of fossil fuels, we will also redouble efforts to develop renewable energy. We will make a major push to promote green construction practices and eco-friendly architecture in both urban and rural areas. 

Pushing ahead with the comprehensive conservation strategy, we will speed up efforts to develop a system for recycling waste and used materials. The supply of green products will be boosted, eco-friendly distribution channels will be improved, and active steps will be taken to expand green consumer spending. We will implement fiscal, taxation, financial, investment, and pricing policies and standards that support green and low-carbon development. We will actively yet prudently progress toward peak carbon emissions and carbon neutrality, accelerating the pace of retrofitting to promote energy conservation and carbon reduction in key areas and improving the statistics and accounting system for carbon emissions.

Accelerating the establishment of a new open economic system and promoting high-standard opening up 

We will work to steadily expand institutional opening up by promoting alignment with high-standard international economic and trade rules and harmonizing rules, regulations, management, and standards with international ones. We will foster new growth drivers for foreign trade, expanding trade in intermediate products, services, digital commerce, and eco-friendly products, as well as cross-border e-commerce exports. We will further reform the management for inward and outward investment. All market access restrictions for foreign investment will be removed in the manufacturing sector, and further steps will be taken to foster a first-rate business environment that is market-oriented, law-based, and internationalized. 

The layout for regional opening up will be optimized. We will implement the strategy for upgrading pilot free trade zones and accelerate the development of the Hainan Free Trade Port. Our efforts will see us moving faster toward all-around opening up through links running eastward and westward, across land, and over sea. To advance the Belt and Road Initiative, we will focus on implementing the eight steps for supporting its high-quality development and carry out both major signature projects and “small but effective” public wellbeing projects.

Strengthening the safeguards for economic security and preventing and defusing risks in key areas 

We will reinforce the foundations of food security in all respects and accelerate progress in the new drive to increase China’s grain production capacity by 50 million tons. We will continue to enhance coordination on the production, procurement, storage, processing, and sale of grain. The planning and development of a new type of energy system will be accelerated. We will boost our capacity to meet peak energy demands and strengthen the national reserves system. 

We will improve the development systems and mechanisms for key industrial chains and refine the coordination frameworks for the systematic and progressive relocation of industries within China. We will forge more resilient and secure industrial and supply chains. A framework for basic data systems will be put in place with a view to enhancing data security governance.

Promoting integrated urban-rural development and coordinated regional development 

Striving for coordinated progress in new industrialization, new urbanization, and all-around rural revitalization, we will advance infrastructure integration and promote equitable access to basic public services. To build on our success in poverty alleviation, we will strengthen the investment mechanisms for rural revitalization. We will also refine the mechanisms for developing, certifying, managing, and protecting high-standard cropland and elevate the development of rural industry. We will push ahead with efforts to upgrade rural living environments. 

Plans will be drawn up to implement four major initiatives, which will focus respectively on a new round of efforts to grant permanent urban residency to eligible people moving from rural areas, urbanization in areas with the largest potential for absorbing new populations, the development of modern metropolitan areas, and urban renewal schemes with a focus on boosting safety and resilience. We will develop a regional economic layout and territorial space system characterized by complementarity between regions and territorial spaces and facilitate integrated implementation of the coordinated regional development strategy and the major strategies of different regions. 

We will improve the institutional and policy frameworks for opening up a new vista in the large-scale development of the western region, securing new breakthroughs in the full revitalization of northeastern China, accelerating the rise of the central region, and encouraging the eastern region to modernize more quickly. Steps will be taken to enable regions like the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area to better play their roles as engines of high-quality development and to improve the mechanisms for developing the Yangtze Economic Belt and ecological protection and high-quality development in the Yellow River basin. We will move forward with the high-standard and high-quality development of the Xiong’an New Area.

Advancing the reform and development of social programs to safeguard and improve people’s wellbeing 

Reform of the income distribution system will be advanced with the aim of increasing the incomes of residents through multiple channels. We will refine the public employment services system with an eye toward promoting employment for key groups such as college graduates, veterans, and migrant workers. The social security, medical, and healthcare systems will be further reformed, and a sound social security system will be put in place to serve people in flexible employment, rural migrant workers, and those in new forms of employment. 

We will reform public services for both elderly care and childcare. We will refine supporting policies and incentives for boosting the birthrate and make a major push to develop public-benefit childcare services. We will also optimize the provision of basic eldercare and foster the growth of the silver economy. We will step up our prevention and response efforts for extreme weather and natural disasters and ensure that disaster relief and post-disaster reconstruction work are carried out effectively.

(Originally appeared in Qiushi Journal, Chinese edition, No. 18, 2024)