context: NPFs (new productive forces) were the key focus at the 2024 Two Sessions. While everyone is jumping on the bandwagon, Xi Jinping 习近平 stressed that NPFs need to be developed selectively based on local conditions.
Amidst the hype around NPFs (new productive forces), it is important to maintain a calm and rational attitude, argues a series of anonymous op-eds published in the Economic Daily from 15-18 March. NPF is not just a slogan, the op-eds stresses: current over-generalisation and misuse of the concept may have harmful effects.
Everyone blindly investing in the same strategic emerging and future industries will lead to serious problems, the op-eds warns, including
- duplication of efforts
- dispersion, misallocation and waste of resources
- higher costs due to irrational competition for talent and other resources
- unfinished projects
- overcapacity
The author agrues, the state should stay vigilant and take preventive measures early on. Otherwise entire industries may ‘first rise together and then fail together’.
Many local governments are issuing support measures for a range of tech-heavy industries like AI, cloud computing, big data, 5G, industrial internet, integrated circuits and more. But such mechanical and homogeneous policies won’t work, the op-ed cautions. Local governments should not adopt a ‘one size fits all’ approach, it urges, but should
- carefully consider the local economic reality
- identify specific focus points based on local competitive advantage
- carefully study long-term plans before taking action
- improve top-level design and coordination
- not ignore traditional industries
Tech-heavy industries require long-term R&D investment, the op-eds note; breakthroughs cannot be achieved overnight.