Translation: State Council's June 2025 Report on the Development of New Quality Productive Forces
Chinese government on its main progress and achievements in developing new quality productive forces, as well as the challenges, opportunities, and next steps.
Welcome to a special issue of NPC Observer Monthly, a (mostly) monthly newsletter about China’s national legislature: the National People’s Congress (NPC) and its Standing Committee (NPCSC).
On June 24, Deputy Director of China’s National Development and Reform Commission Xiangli Bin reported to the NPCSC on the development of “new quality productive forces” [新质生产力] on behalf of the State Council. Full text of report has just been released today in the latest issue of the NPCSC Gazette.
This is far from my area but I thought it might be of interest to others. So in this newsletter I’m providing a lighted edited machine translation of the report. You can also download the report as published in the Gazette below. If you wish to quote from the translation, I strongly recommend verifying it against the original text.
Report on the Development of New Quality Productive Forces
Standing Committee of the National People’s Congress:
Entrusted by the State Council, I hereby report to the Standing Committee of the National People’s Congress on the development of new quality productive forces. Please deliberate.
The development of new quality productive forces is a major strategic decision made by the Party Central Committee with Comrade Xi Jinping at its core, reflecting a profound insight into the complex domestic and international environment facing China, a deep understanding of the phased characteristics and laws of China’s economic and social development, and an accurate grasp of the trends of the new round of scientific and technological revolution and industrial transformation. Since the 20th Party Congress, General Secretary Xi Jinping has delivered a series of important statements on the theory and practice, methods and pathways for developing new quality productive forces, providing fundamental guidance and a roadmap for action. The Party Central Committee and the State Council have strengthened top-level design and made systematic arrangements for developing new quality productive forces as suited to local conditions. The Standing Committee of the National People’s Congress has attached great importance to this work, providing careful guidance and strong support through means such as enacting or amending legislation and overseeing the handling of key proposals [by NPC deputies or CPPCC members]. All regions and departments have conscientiously implemented the decisions of the Party Central Committee and the State Council, carefully listened to the opinions and suggestions of deputies to the National People’s Congress, and vigorously promoted the steady growth of new quality productive forces.
I. Main Progress and Achievements
(1) The effectiveness of sci-tech innovation continues to improve, and the results of innovation-driven development are increasingly evident.
The system for sci-tech innovation has been steadily strengthened. The national laboratory system is advancing, with national-level innovation platforms and bases being optimized and consolidated. Beijing, Shanghai, and the Guangdong–Hong Kong–Macao Greater Bay Area have made remarkable progress in building international sci-tech innovation centers, all ranking among the top five in the 2024 Global Science and Technology Cluster Ranking. Management of major sci-tech infrastructure across its full life cycle has been enhanced, with 77 facilities laid out and 42 already operational. Leading sci-tech enterprises and specialized, sophisticated, and innovative small and medium-sized firms are being cultivated and expanded, with enterprises playing an increasingly central role in innovation.
Major scientific and technological breakthroughs are emerging. The Sci-Tech Innovation 2030 Major Projects and subsequent state sci-tech megaprojects have been comprehensively launched, producing a number of landmark results. The Dream deep-sea drilling vessel was completed and commissioned; the Striver manned submersible achieved record-breaking deep dives; the third-generation homegrown superconducting quantum computer Origin Wukong went online; and a 300-megawatt-class F-type heavy-duty gas turbine completed its first full-load test.
Progress has also been made in tackling critical “bottleneck” technologies. A nationwide effort has been mobilized to overcome key technical hurdles, with breakthroughs in several major constraints. The industrial chain for integrated circuit design, manufacturing, and packaging and testing has been further strengthened. In 2024, China’s integrated circuit output grew by 22.2%, with exports exceeding 1.1 trillion yuan, both record highs. Domestically developed high-end equipment such as high-horsepower continuously variable transmission tractors and large LNG carriers have been put into service. The C919 large passenger aircraft has entered full operation across the three major airlines, with cumulative passenger numbers exceeding 2 million.
(2) Sci-tech innovation and industrial innovation are deeply integrated, accelerating the building of a modern industrial system.
The transformation and upgrading of traditional industries is picking up pace. The 2024 Guiding Catalogue for Industrial Structure Adjustment was implemented to accelerate the high-end, intelligent, and green transformation of traditional industries. The smart manufacturing program has been advanced, with China accounting for more than 50% of global annual industrial robot installations. The Manufacturing Excellence and Quality Program is helping traditional industries expand product varieties, improve quality, and build brands. The national modern agricultural industry technology system has been strengthened, with the comprehensive mechanization rate for crop cultivation, planting, and harvesting exceeding 75%.
Emerging industries are developing rapidly. Strategic emerging industries are being promoted in integrated clusters. In 2024, the value-added of high-tech manufacturing enterprises above a designated size grew by 8.9% year-on-year, accounting for 16.3% of all large-scale industry. Annual production of new energy vehicles surpassed 13 million units, with China ranking first globally in production and sales for ten consecutive years. Innovation in pharmaceuticals is supported across the full chain, with the number of drugs under research and new drug approvals among the highest worldwide. Large-scale application of the BeiDou Navigation Satellite System is accelerating, with coverage exceeding 90% in transport, natural resources, emergency response, and other key areas.
Future industries are being proactively laid out. Top-level design for industries such as artificial intelligence, biomanufacturing, and quantum technology has been strengthened, with coordination mechanisms established. The “Future Industry Launch” initiative has been carried out for central state-owned enterprises. The “AI+” initiative is being fully implemented to empower a wide range of industries. Mechanisms for growth in future industry investment are being established, with a national venture capital guidance fund set up.
The digital economy is booming. The “Data Elements ×” initiative has been rolled out, cultivating a unified national data market. The “Eastern Data, Western Computing” project is advancing, supporting the construction of a nationwide integrated computing power network, now the world’s second largest. In 2024, the value-added of core digital economy industries accounted for about 10% of GDP.
(3) Green and low-carbon development has advanced in depth, accelerating the transformation of economic and social development.
The policy system for green development has been steadily improved. Opinions on accelerating the comprehensive green transformation of economic and social development have been issued, forming a comprehensive “1+N” policy framework for peaking carbon emissions and achieving carbon neutrality. Systems for carbon emission statistics and accounting, budget management, and standard measurement have been enhanced. A national voluntary greenhouse gas emissions trading market has been launched, and pilot programs for peaking carbon emissions have been promoted. As of April 2025, the national carbon emissions trading market had recorded a cumulative transaction volume of 640 million tons of allowances, with a total value of 44.05 billion yuan.
Green transformation in key sectors has been steadily advanced. The 2024 Catalogue for Guiding the Green and Low-Carbon Transformation of Industries has been implemented, along with the release of 112 green technologies and 147 demonstration projects of advanced green and low-carbon technologies. Support for large-scale equipment renewal and consumer goods replacement has been strengthened, promoting the adoption of efficient and energy-saving equipment and products. Special campaigns for energy conservation and carbon reduction, as well as ultra-low emission upgrades, have been implemented in key industries such as steel and cement. In 2024, China’s energy consumption per unit of GDP dropped by more than 3%.
The transition to green and low-carbon energy has accelerated. Efforts to improve the clean and efficient use of fossil energy have continued. China has built the world’s largest and fastest-growing renewable energy system, with non-fossil energy accounting for 19.8% of consumption. In 2024, ultra-high-voltage direct current transmission channels delivered more than 400 billion kilowatt-hours of green electricity. China supplied 80% of the world’s photovoltaic modules and 70% of key wind power components.
(4) Reform of systems and mechanisms has been steadily advanced, optimizing the innovation ecosystem.
A high-standard market system is being built more quickly. Market access rules have been improved, with a series of systemic and breakthrough measures introduced to ease access and eliminate unreasonable barriers that restrict the development of new technologies, products, business models, and industries.
Reform of market-based allocation of production factors has advanced in a coordinated way. Progress has been made in labor, capital, technology, and data markets, while a financial services system supporting sci-tech and industrial innovation has been strengthened. By the end of 2024, outstanding loans to high-tech enterprises reached 15.2 trillion yuan, up 13.8% year-on-year.
High-level opening-up continues to deepen. China has signed Belt and Road cooperation documents with more than 150 countries and over 30 international organizations. A new action plan has been introduced to advance high-level opening-up and attract and utilize foreign investment. The Belt and Road Sci-Tech Innovation Action Plan has been continuously implemented, further integrating China into global innovation networks.
(5) Education, sci-tech, and talent development have been advanced in an integrated way, with a steadily growing pool of high-quality talent.
The training system integrating science and education has improved. Adjustments and improvements to higher education disciplines and specialties have been promoted, with new programs established in urgently needed fields such as integrated circuits, life and health sciences, and quantum science. The National Strategy for Cultivating Top Talent in Basic Disciplines has been implemented, with 288 training bases established across 77 universities. Efforts have been made to cultivate globally minded, international talent, with more than 1,600 cooperative institutions and programs established at the undergraduate level and above.
The mechanism for integrating industry and education has been further improved. A pilot program has established 139 specialized colleges, such as modern industry colleges and future technology colleges, while 45 national platforms for industry–education integration and innovation have been laid out in key areas such as integrated circuits, artificial intelligence, and biological breeding.
The development of professional and highly skilled personnel has accelerated, with the total number of skilled workers exceeding 60 million nationwide. Mechanisms to unleash talent vitality are being strengthened. Reforms to the classification of sci-tech personnel have advanced, with new standards for professional title evaluation and measures supporting enterprise-led skills evaluation. Pilot reforms of salary systems in universities and research institutes are under way, along with policies to incentivize remuneration in public-service institutions for high-level talent and in state-owned enterprises for major sci-tech innovations.
II. Challenges and Opportunities in Developing New Quality Productive Forces
At present, global sci-tech innovation is entering an unprecedentedly intensive and active period. A new round of sci-tech revolution and industrial transformation is reshaping the global innovation landscape and restructuring the world economy. At the same time, major changes unseen in a century are accelerating, and factors of instability and uncertainty are increasing significantly, creating a more complex and challenging environment for the development of new quality productive forces in China.
First, competition in sci-tech innovation is becoming increasingly fierce, and the supply of high-quality science and technology needs to be strengthened. High-tech fields have become the frontier and main battlefield of international competition. At the same time, China’s capacity for original basic research and disruptive technological innovation remains weak, and support mechanisms are still incomplete.
Second, there are weaknesses in key sectors and critical links, and industrial innovation capacity needs to be improved. Dependence on others for core technologies in areas such as integrated circuits and industrial machine tools remains pronounced. Some industries face phased and structural supply-demand imbalances, resulting in “involution-style” competition.
Third, the tasks of peaking carbon emissions and achieving carbon neutrality are daunting, and the comprehensive policy framework for green transformation needs to be improved. China’s energy consumption is still growing rapidly, and the pressure of balancing energy security with the energy transition has increased. Certain energy-intensive and high-emission industries remain locked into path-dependent development models, and the standards system for green and low-carbon development requires faster progress.
Fourth, the smooth flow of production factors still faces obstacles, and the mechanisms for stimulating innovation vitality need to be strengthened. Financial support for sci-tech and industrial innovation is insufficient. New technologies, products, business models, and industries are placing higher demands on regulatory rules and standards.
Fifth, the quality and effectiveness of talent cultivation remain inadequate, and the virtuous cycle among education, science, and talent needs strengthening. The mismatch between talent supply and the needs of science, technology, and industrial development remains prominent. Universities, research institutions, and enterprises have not yet fully formed synergy in talent cultivation.
At the same time as confronting these challenges, we must strengthen our confidence in development and be adept at seizing opportunities. China has a solid foundation and many favorable conditions for developing new quality productive forces.
First, we have notable institutional advantages. The socialist system’s ability to mobilize resources for major undertakings continues to show its strengths. More than 300 major reform measures adopted at the 20th Central Committee’s Third Plenum are being accelerated, providing a strong guarantee for unleashing new drivers of the development of new quality productive forces.
Second, we have a strong industrial foundation. China is the only country in the world with all the industrial categories classified by the United Nations, and has ranked first in the world in manufacturing output for 15 consecutive years. Of the world’s 500 major industrial products, China leads in output for more than 220 of them.
Third, we have a vast market. With a population of more than 1.4 billion, including more than 400 million people in the middle-income group, China is the world’s most promising consumer market. In 2024, domestic demand contributed 69.7% of economic growth, continuing to serve as the main driver of growth.
Fourth, we have abundant human resources. More than 5 million college graduates in science, technology, engineering, and mathematics [STEM] graduate each year in China, the most in the world. China has led the world for years in full-time equivalent research and development personnel.
In sum, while the development of new quality productive forces in China faces new risks and challenges, it also presents new opportunities and space for growth. Under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, we have the foundation, conditions, confidence, and capability to accelerate the cultivation and expansion of new quality productive forces and unleash stronger momentum for high-quality development.
III. Key Tasks to Further Promote the Development of New Quality Productive Forces
Next, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will fully implement the principles of the 20th Party Congress and the Second and Third Plenums of the 20th Central Committee. We will advance innovation in science and technology, industry, development models, systems and mechanisms, and talent management mechanisms, promoting the faster growth of new quality productive forces.
(1) Vigorously advance sci-tech innovation and accelerate revolutionary breakthroughs in technology.
We will strengthen coordination in the allocation of sci-tech resources, explore the establishment of full-process evaluation mechanisms for sci-tech projects, and enhance the effectiveness of sci-tech investment and the transformation of outcomes. Major science and technology projects will be advanced and laid out proactively. Investment in basic research will be increased, with mechanisms combining competitive and stable support improved, and the organization of basic research enhanced.
The national strategic sci-tech strength will be reinforced. The strategic leading role of the national laboratory system will be enhanced, the capacity of national research institutions to undertake breakthroughs and provide foundational support will be improved, the ability of top research universities to conduct basic research and train talent will be consolidated, and the original innovation and global competitiveness of leading technology enterprises will be strengthened.
Infrastructure and conditions for science and technology will be enhanced, with systematic promotion of major sci-tech infrastructure projects. The layout of national sci-tech innovation platforms and bases will continue to be optimized. All parties will be mobilized to decisively win the battle to overcome key core technologies. Enterprises will be firmly established as the main actors in innovation through institutional arrangements, with full implementation of the R&D expense deduction system. Deeper integration of industry, academia, and research under enterprise leadership will be promoted, supporting enterprises in participating in national decision-making on sci-tech innovation and undertaking major sci-tech projects.
(2) Promote industrial innovation through sci-tech innovation, driving deep transformation and upgrading.
We will advance major technological transformation and large-scale equipment renewal in manufacturing. Projects for digital transformation and smart manufacturing will continue, accelerating the “intelligent and digital” transformation of traditional industries. Actions to raise grain production capacity by 100 billion jin, revitalize the seed industry, and develop smart agriculture will be advanced, along with new models such as agricultural factories.
Pilot programs for the integration of advanced manufacturing and modern services will deepen, accelerating the digitalization, standardization, and branding of services. Structural contradictions in key industries will be actively addressed, and “involution-style” competition rectified in a comprehensive manner.
National programs to develop clusters of strategic emerging industries will continue, along with initiatives to cultivate emerging industries and create new growth drivers. Large-scale demonstration projects for applying new technologies, products, and scenarios will be launched, accelerating the cultivation of future industries such as biomanufacturing, quantum technology, and embodied intelligence. The application of AI based on domestically developed large models will be advanced across industries, cultivating and promoting high-value application scenarios.
(3) Advance innovation in development models and accelerate the comprehensive green transformation of economic and social development.
We will accelerate the establishment of a dual-control system for carbon emissions, and introduce comprehensive evaluation and assessment methods for carbon peaking and neutrality. Mechanisms to realize the value of ecological products will be improved, along with a unified national green certificate market.
Demonstration projects for advanced green and low-carbon technologies will be expanded. Energy-saving, pollution-reduction, and carbon-reduction upgrades will be supported in key sectors such as steel, coking, non-ferrous metals, and petrochemicals, along with renewal of energy-saving and pollution-control equipment. Clean energy will be phased in to replace coal facilities in an orderly manner, with priority given to eliminating dispersed coal use.
The development and integration of new energy sources will be coordinated, with construction accelerated for major hydropower projects, desert-based renewable energy bases, offshore wind farms, and other clean energy bases. Nuclear power will be developed actively, safely, and in an orderly manner. Distributed energy will be developed based on local conditions. The dispatching system for new energy storage will continue to be improved.
Policies for large-scale equipment renewal and consumer goods replacement will be expanded and upgraded, further increasing the supply and consumption of green products.
(4) Steadily advance institutional and mechanism innovation to promote innovative allocation of production factors.
Comprehensive pilot reforms for market-based allocation of factors will be fully advanced. Fundamental systems for data property rights, circulation and trading, and income distribution will be improved. Rules for secure governance of data circulation will be refined and implemented, with regulated cross-border flows of data promoted.
Universities and research institutes will be encouraged to license sci-tech achievements to medium-sized, small, and micro enterprises on a “use first, pay later” basis. Reforms on the ownership and separate management of job-related sci-tech achievements will be promoted. A more efficient comprehensive system for intellectual property management will be established, and punitive damages systems improved.
A multi-level financial services system for science and technology will be improved. Reforms of the STAR Market and ChiNext will be deepened, while a “science and technology board” in the bond market will be accelerated. Venture capital will be actively developed. The Catalogue of Industries Encouraging Foreign Investment will be expanded, with full implementation of national treatment for foreign enterprises. Outbound investment will be guided toward healthy, safe, and orderly development, and international cooperation on industrial and supply chains optimized.
(5) Deepen innovation in talent systems to build a high-level, innovative workforce.
Education, science and technology, and talent will be advanced in an integrated way. Relying on major tasks and key platforms, we will train and develop strategic scientists, top sci-tech leaders and teams, and outstanding engineers. Mechanisms for early identification and cultivation of top innovative talent will be explored. Adjustments to academic disciplines and programs in universities will be improved, and urgently needed talent in key areas cultivated.
The integrated model of academic and vocational education for training skilled talent will be fully advanced, promoting the integration of vocational and general education, as well as industry and education. Channels for personnel exchange among universities, research institutes, and enterprises will be opened, promoting joint training and exchange of talent.
Reforms of talent classification and the system of “title-based” evaluations will be deepened, with evaluation systems oriented toward innovation capacity, quality, effectiveness, and contribution. Service systems covering all returning overseas students will be improved. Pilot programs for high-skilled immigration will be explored, and services for foreign professionals optimized, accelerating the creation of a globally competitive talent system.
We will continue to study and implement General Secretary Xi Jinping’s important statements and instructions on developing new quality productive forces, fully implement the decisions of the Party Central Committee and the State Council, and under the oversight and support of the National People’s Congress and its Standing Committee, accelerate the implementation of all relevant policies and measures. This will better promote the development of new quality productive forces and provide powerful momentum for Chinese modernization.