A view of Shanghai's Lujiazui area Photo: VCG

China holds a competitive edge in terms of the quantity of data and technology patents,MKS sports but there are still gaps with the US and the EU regarding high-quality patents and key technology innovations.

By promoting high-level opening-up, establishing an efficient and smooth global industry and supply chain flow mechanism, and creating a comprehensive opening system with strong attractiveness, China can build up globally advanced high-quality production factors.

The three major risks and challenges in the international environment are as follows.

First, some developed countries have imposed technological blockade on China, restricting investment and cooperation in advanced semiconductors, quantum technology, artificial intelligence (AI) and other fields, as well as hindering technological exchanges. This is seriously affecting complementary advantages and win-win cooperation involving the new quality productive forces between China and foreign countries.

Second, some developed countries are promoting the so-called "re-shoring" of manufacturing under the guise of national security, providing massive fiscal support for high-tech industries such as semiconductors, pharmaceuticals and others, and implementing policies such as "de-risking" with China. This situation affects the security and stability of China's industrial and supply chains, and it is not conducive to the transformation and upgrading of Chinese manufacturing sector.

Third, international economic and trade rules are readjusting now, and China is facing rising pressures in areas such as the green economy and the digital economy.

Nevertheless, there exist three major opportunities for China too. 

First, there is the deepening development of the new round technological revolution and industrial transformation. Unlike the previous three industrial revolutions, in key areas of the Fourth Industrial Revolution such as 5G and AI, China is expected to become an important leader in developing new quality productive forces.

Second, the international landscape of power is becoming more balanced. This is conducive to promoting global economic governance toward a more just and fair direction.

Third, the international division of labor in the fields of technology research and development, information services and other service industries continues to deepen, and the digital economy is flourishing, expanding the space and scope of international cooperation, and providing new opportunities for China to integrate into economic globalization.

To promote the construction of a new system of an open economy at a higher level, China should promote the joint construction of the Belt and Road Initiative; promote secure and efficient flow of innovative elements such as technology, talent and data; support all types of business entities in optimizing the allocation of advanced production factors on a global scale; create a favorable international environment for the development of the new quality productive forces in China, and achieve a higher level of mutually beneficial cooperation.

The significant feature of the new quality productive forces is innovation, which includes innovation at both the technological and business-model levels, as well as innovation at the management and institutional levels. China should further promote innovation as the primary driving force for growth; advance tech innovation to make original scientific and technological achievements; solve bottlenecks and overcome blockages that restrict the development of the new quality productive forces; further deepen reform comprehensively, and provide effective institutional mechanisms for the development of the new quality productive forces and achieving high-quality development.

The author is professor with School of Economics, Peking University. [email protected]