China is charting a new course for its economy, fueled by innovation and cutting-edge technology.
As the final year of the 14th Five-Year Plan (2021-2025) approaches, the Chinese mainland is placing a heavy emphasis on developing new quality productive forces. First introduced in 2023, this concept refers to advanced productivity that moves beyond traditional economic growth models. It centers on high-tech, high-efficiency, and high-quality advancements in areas like artificial intelligence, big data, and new materials.
Rising R&D Fuels Innovation
In 2024, China solidified its position as a global innovation leader, climbing to 11th place in the Global Innovation Index. This marks one of the fastest improvements among major economies over the past decade.
This achievement is driven by sustained investments in research and development (R&D). According to the National Bureau of Statistics (NBS), China’s R&D expenditure reached 2.68 percent of its GDP, with total spending surpassing 3.6 trillion yuan (approximately $500 billion), an 8.3 percent increase from the previous year. Basic research funding surged by 10.5 percent, now accounting for 6.91 percent of total R&D spending.
Zhang Qilong, an NBS statistician, noted that favorable policies, a diversified investment environment, and stronger involvement from businesses have significantly contributed to this consistent growth.
Emerging Industries on the Rise
China’s industrial landscape is undergoing a transformative shift as emerging sectors rapidly expand. The value-added output in high-tech manufacturing grew by 8.9 percent year on year in 2024, according to Kang Yi, commissioner of the NBS.
The aerospace equipment and electronic communication device manufacturing sectors posted double-digit growth. Smart consumer equipment manufacturing surged by 10.9 percent, driven by soaring demand for intelligent car-mounted devices (up 25.1 percent) and unmanned aerial vehicles (up 53.5 percent).
“New market demands are accelerating the supply of high-quality products, reshaping China’s industrial pillars,” Kang emphasized.
Digital Economy Takes Center Stage
The digital economy continued its rapid ascent. The information transmission, software, and IT service sector expanded by 10.9 percent. Digital consumption innovations spurred online retail sales of physical goods, climbing by 6.5 percent.
Infrastructure for next-gen connectivity advanced steadily. By November 2024, China had deployed 4.19 million 5G base stations. It also launched its first 400G all-optical interprovincial backbone network under the “East Data West Computing” project, establishing ultra-high-speed computing channels.
Legacy industries also saw robust modernization efforts in 2024. Technical transformation investments in manufacturing rose by 8 percent, outpacing overall investment growth.
As China continues to invest in innovation and technology, it is steering its economy towards a future defined by high-tech industries and digital advancements, setting a promising path for the years ahead.
