In the past two years, China's stock market has experienced some fluctuations, affecting private investment and making consumer spending appear relatively weak. Coupled with various foreign "China's economy has peaked" and "China's economy is collapsing" theories, there is some concern about the future development prospects of China.
However, I believe the above are short-term issues. Overall, the main issue is a lack of confidence. In this regard, China has very ample fiscal, monetary, and financial policy space. I think this is a consensus among domestic academia. As long as these policies are used well, we should be able to stabilize confidence and the economy can return to normal growth.
At the press conference on September 24, the policy introduction by the People's Bank of China Governor Pan Gongsheng, China Securities Regulatory Commission Chairman Wu Qing, and Financial Regulatory General Bureau Director Li Yunze, along with a series of measures formulated by the Central Political Bureau meeting on September 26, everyone's confidence has obviously recovered. I believe the economic bottoming and rebounding can be expected.
For our country, the key is still long-term economic growth, because our goal is to achieve the great rejuvenation of the Chinese nation and build a prosperous, democratic, civilized, harmonious, and beautiful socialist modernized strong country by the middle of this century. In terms of long-term economic growth, the most important thing is to continuously improve the level of productivity. How can we continuously improve the level of productivity? The most important thing is that existing industries must continuously achieve technological innovation, and new industries with higher added value must continuously emerge. This is the development of new quality productivity that has been talked about a lot since last year.
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In terms of developing new quality productivity, I think we have many opportunities, because for the emerging industries of the fourth industrial revolution, including artificial intelligence, big data, life science, etc., first, we are on the same starting line as developed countries, and compared with other countries, our country has three major advantages: The first advantage is the talent advantage. The number of graduates in science, technology, engineering, and mathematics (STEM) majors in our country exceeds 5 million per year. The second advantage is that we have a super large domestic market. Technological innovation or the emergence of new industries can quickly achieve economies of scale in the domestic market and quickly have a strong competitiveness in the domestic and international markets. The third advantage is that our country has the most complete manufacturing ecosystem. If any product or technology requires hardware, our domestic market is the most complete, the cost can be the lowest, and the quality can be the highest. This is very obvious. For example, in software, several of the most downloaded software in the United States are owned by Chinese companies. Looking at hardware, Tesla has been developing in the United States for more than ten years, with the highest output not reaching 30,000 vehicles, and once faced difficulties. After investing in China in 2019, it produced 480,000 vehicles the following year, making Tesla the largest automotive company with a market valuation of 600 billion US dollars.
In addition, the advantages of domestic emerging industries such as electric vehicles, drones, solar panels, and lithium batteries have already emerged.
Of course, the vast majority of our industries are still in the field of traditional industries. In this regard, we have already taken the lead in many areas internationally, such as high-speed rail, home appliances, shipbuilding, etc. For other traditional industries that have not yet reached the international leading level and are still in the catch-up stage, we also have the advantage of being a latecomer. In these areas, we can use introduction, digestion, and absorption as a way of re-innovation, and the risk cost of this method will be relatively low.
At the same time, these traditional industries can also use digital transformation and artificial intelligence manufacturing to achieve overtaking. The most obvious example is electric vehicles. The original fuel vehicle industry has been in a long-term catch-up, and now after digitalization, artificial intelligence, and electrification, our electric vehicles have taken the lead internationally. From the above advantages, we have a very large space for developing new quality productivity in traditional industries.
Regardless of emerging industries or traditional industries, the opportunities for developing new quality productivity are very good, but it is also necessary to prevent a rush to start and a rush to follow. How can we prevent this? The most important thing is that all regions should act according to local conditions, under the joint action of an effective market and an effective government, to develop the comparative advantages of each region into competitive advantages in the market. Overall, the relatively developed eastern coastal areas of our country, as well as some central cities in the central and western regions, such as Wuhan, Chengdu, Xi'an, etc., have developed economies, abundant capital, and a large number of talents, and can put more effort into emerging industries.
For other relatively backward areas in the central and western regions, their comparative advantage is mainly in traditional industries, and they can make more use of digitalization, artificial intelligence, and introduction, digestion, and absorption to transform from catch-up industries to leading industries.Currently, we are facing a major transformation that has not been seen in a century and an accelerating international situation. External pressures will continue to increase, and there will inevitably be some fluctuations caused by short-term structural adjustments within the country, including insufficient effective demand. However, overall, development is the foundation and key to solving all problems. In the short term, we have a sufficiently large policy space to keep the economy stable and improving. In the long term, we are developing new quality productive forces, and there are many advantages in both emerging industries and traditional industries. As long as the joint role of an effective market and a proactive government is utilized to bring out these advantages, China's economy will certainly be able to continue to maintain medium-high speed growth and achieve the second centenary goal by 2049.