Press conference on guiding principles of the 4th plenary session of the 20th CPC Central Committee

Mo Gaoyi:

Thank you, Mr. Han. Now, let's invite Mr. Zheng to brief us on industrial development, the domestic market, regional development and other aspects during the 15th Five-Year Plan period.

Zheng Shanjie:

Thank you, Mr. Mo. Good morning, everyone. The recommendations have made comprehensive arrangements for economic and social development during the 15th Five-Year Plan period. I would like to briefly introduce three aspects: industry, market and regional development.

The first aspect concerns industry, specifically building a modernized industrial system. China's economy started with the real economy and will also rely on the real economy to move toward the future. The recommendations clearly position "building a modernized industrial system and reinforcing the foundations of the real economy" as the top strategic task. Four priority areas have been set out, which can be understood as consolidating and upgrading fundamentals, fostering new growth drivers through innovation, expanding and improving quality and capacity, and enhancing efficiency through stronger foundations.

Consolidating and upgrading fundamentals means upgrading traditional industries. Traditional industries form the foundation of China's current industrial system, accounting for about 80% of value added in manufacturing. The recommendations call for promoting upgrading in key industries, consolidating and enhancing the position and competitiveness of chemicals, machinery, shipbuilding and other sectors in the global industrial division of labor, and developing advanced manufacturing clusters. These measures will accelerate effective quality improvements and reasonable quantitative growth in traditional industries. Preliminary estimates suggest that about 10 trillion yuan in new market space will be added over the next five years, releasing enormous development momentum and significant benefits for people's wellbeing.

Fostering new growth drivers through innovation means fostering emerging industries and industries of the future. In 2024, the value added of China's "three new" economy —encompassing new industries, business forms, and models— accounted for over 18% of GDP. The recommendations propose creating new pillar industries and accelerating the development of strategic emerging industry clusters such as new energy, new materials, aerospace and the low-altitude economy, which will give rise to several trillion-yuan-level or even larger markets. The recommendations also propose making forward-looking arrangements for future industries. These include advancing quantum technology, bio-manufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence and sixth-generation mobile communications as new economic growth drivers. These industries are poised for significant growth, with the scale set to be added over the next decade being equivalent to creating a whole new high-tech sector in China, thus injecting continuous momentum into the high-quality development of the country's economy.

Expanding and improving quality and capacity means promoting high-quality and efficient development in the service industry. China's service industry still has huge potential for capacity expansion and quality improvement. The recommendations call for measures to expand capacity and improve quality in the service industry and deepen the integration of modern services with advanced manufacturing and modern agriculture. These initiatives will accelerate the reshaping and optimization of the economic ecosystem, better meet people's needs for a better life, unlock new space for economic growth and create another huge new market.

Enhancing efficiency through stronger foundations means developing a modernized infrastructure system. China already has the world's largest infrastructure networks across high-speed rail, highways, ports, postal and express delivery, power grids, broadband and other areas. The recommendations call for strengthening overall infrastructure planning, developing appropriately future-oriented new types of infrastructure, and improving the modern integrated transportation system. These measures will better promote the interconnected, coordinated, and secure development of infrastructure, enhance efficiency, and provide stronger support for economic growth.

The second aspect concerns the market, specifically building a robust domestic market. Major economies are all driven by domestic demand, and the market is the scarcest resource in today's world. A robust domestic market is the strategic foundation for Chinese modernization. The recommendations propose adhering to the strategic basis of expanding domestic demand and outline three key tasks. In our view, to implement these tasks well, it is crucial to focus on the following three aspects: expanding increments, improving efficiency and ensuring smooth circulation.

First, we will expand new demand. China has both the space and potential to expand domestic demand. The recommendations propose working toward improving living standards while increasing consumer spending and coordinating investments in physical assets and human capital. Key measures include carrying out special initiatives to boost consumption, expanding the scope of service consumption, and upgrading goods consumption. They also emphasize maintaining reasonable investment growth, advancing the high-quality implementation of major national strategies and enhancing security capacity in key areas, launching a number of major landmark projects, and improving long-term mechanisms for private sector participation in major projects. These steps will comprehensively expand domestic demand and drive sustained, positive economic growth in China.

Second, we will improve efficiency. The annual scale of China's fixed asset investment has reached 50 trillion yuan. However, tasks such as improving people's living standards, addressing weak links and nurturing new growth drivers remain challenging. Therefore, government funds in particular must be better directed toward critical areas of development and improving people's lives. In response, the recommendations urge optimizing the structure of government investment and increasing the share of government investment in people's wellbeing. They also call for coordinating the use of various types of government investment and strengthening the management of the entire investment process. These efforts will better leverage government investment's catalytic role and continuously improve overall investment efficiency.

Third, we will ensure smooth circulation. Only with a unified national market can we achieve smooth economic circulation. The number of items on China's negative list for market access has been reduced from 328 to 106, and more than 4,200 policy measures that hindered the flow of factors have been cleared. However, obstacles and bottlenecks remain. In this regard, the recommendations call for unifying underlying institutions and rules of the market, breaking down local protectionism and market segmentation, regulating local governments' economic promotion activities, unifying market supervision and law enforcement, and taking comprehensive steps to address rat race competition. These initiatives will more effectively remove various market barriers and fully deliver the dividends of China's super-large market.

The third aspect concerns regions, specifically promoting coordinated regional development. Since the 20th CPC National Congress, General Secretary Xi Jinping has made a series of new plans for further advancing the regional development strategy. To consistently implement these plans in the 15th Five-Year Plan period, the recommendations have identified five priority tasks. In our opinion, there are three key focuses.

The first is to focus on optimizing the layout. First, we should refine the regional layout. According to the recommendations, new breakthroughs should be achieved in China's eastern, central, western and northeastern regions. This includes the three major development engines of the Beijing-Tianjin-Hebei region, the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area, as well as the two green development belts along the Yangtze River and Yellow River basins. The recommendations have also outlined measures to promote hard connectivity in infrastructure, such as building large cross-region and cross-river basin transport corridors, as well as to improve soft coordination through mechanisms involving regional planning coordination, industrial collaboration and benefit sharing. It is also necessary to optimize the spatial distribution of national territory. In this regard, the recommendations have put forward measures such as strengthening the implementation of the functional zoning strategy and improving the distribution of strategic industries and energy resource bases.

The second is to focus on new urbanization. The recommendations propose advancing people-centered new urbanization, granting urban residency to eligible rural migrants in a scientific and orderly manner, and vigorously implementing urban renewal initiatives. These efforts will effectively promote a positive cycle between investment and consumption, unlocking enormous domestic demand potential. Here is an example. In the 15th Five-Year Plan period, China is expected to build and renovate over 700,000 kilometers of underground pipeline networks, generating new investment demand exceeding 5 trillion yuan.

The third is to focus on coordinated land and marine development. The total value of China's marine economy has surpassed 10 trillion yuan. The recommendations propose strengthening marine development, utilization and protection, enhancing ecological environment protection and restoration of key sea waters, and firmly safeguarding marine rights, interests and security. These efforts will further promote the high-quality development of the marine economy and accelerate the construction of a strong maritime country.

Moving forward, the NDRC will follow the plans of the CPC Central Committee and the State Council, carefully align requirements and the agenda according to the recommendations, and move faster to draft the Outline of the 15th Five-Year Plan to make it a high-quality plan that meets both actual conditions and expectations.

Thank you.