Xiconomics in Practice: Xi’s inspection tour in Hunan spotlights new quality productive forces, opening-up

Chinese President Xi Jinping made an inspection tour in Central China’s Hunan Province starting from Monday, where he learned about various works, including local efforts to accelerate the development of new quality productive forces and promote high-standard opening-up.

This marks Xi’s first domestic inspection tour since the successful conclusion of the two sessions, the Xinhua News Agency reported. The focus of the trip has further shed light on the great importance the top Chinese leader attaches to new quality productive forces and high-level opening-up, while the location underscored the vast potential of Hunan and the broader Central China region in pursuing high-quality development, economists said on Tuesday.

China has made steady progress in forming new quality productive forces and further opening up its market to the world, which has injected fresh impetus into the Chinese economy as well as the global economy, both of which face serious downward pressure amid rising geopolitical tension and protectionism in certain countries, economists noted.

Top priorities

On Monday, Xi, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, inspected Changsha, the provincial capital of Hunan. During the inspection, Xi visited a campus of Hunan First Normal University and a battery materials joint venture. He learned about the university’s efforts in putting resources related to the Party’s heritage to great use, its adherence to fostering virtue through education, and local endeavor to accelerate the development of new quality productive forces and promote high-standard opening up, according to Xinhua.

On Tuesday, Xi inspected the city of Changde, where he learned about the restoration and utilization of historical and cultural blocks, the comprehensive management of urban water environment, preparation work for spring farming, and the improvement of grassroots governance efficiency, Xinhua reported.

The tour in Hunan marks the first domestic inspection trip made by the Chinese President since the conclusion of the two sessions – China’s annual legislative and political consultative sessions – on March 11, when the country set a series of policy priorities and development goals for the year. Forming new quality development forces and pursuing higher-standard opening-up were highlighted by top officials and the Government Work Report.

During the two sessions, Xi also paid great attention to new quality productive forces, calling for focusing on high-quality development as a top priority, and urging efforts to step up innovation, foster emerging industries, adopt forward-thinking plans to develop future-oriented industries, and improve the modernized industrial system.

The focus on new quality productive forces during the Chinese President’s inspection tour in Hunan further underscored great importance attached to relevant efforts, Chinese economists said.

Cao Heping, an economist at Peking University, said that the inspection tour showed how China is focused on taking concrete efforts to speed up the development of new quality productive forces, which are crucial for China’s development. “The inspection tour has a lot to do with efforts to form new quality productive forces after the two sessions,” Cao told the Global Times on Tuesday.

China has been making steady progress in forming new quality productive forces, as it has taken a series of measures to bolster innovation and industrial upgrade. In the first two months of 2024, added value of major equipment manufacturers went up 8.6 percent year-on-year, and high-tech manufacturing saw a 7.5 percent year-on-year increase in added value, supported by a 41.2-percent growth in semiconductor equipment, a 21.6-percent surge in integrated circuits, and an 18.2-percent increase in intelligent unmanned drones, according to official data.

High-standard opening-up is also a top priority for China. The Government Work Report also included a series of measures, including lifting all market access restrictions on foreign investment in manufacturing. On Tuesday, the State Council, China’s cabinet, released an action plan to further promote high-standard opening-up, outlining 24 measures covering five areas, including expanding market access and increasing policy support for foreign businesses.

Greater opportunities

China’s focus on both new quality productive forces and high-standard opening-up creates great opportunities for global businesses to invest and expand in the Chinese market, as highlighted by the Chinese President’s visit to BASF Shanshan Battery Materials Co, a joint venture (JV) between German chemicals giant BASF and Chinese firm Chinese lithium battery materials maker Shanshan Corp in Changsha. The JV has become one of the global leading lithium battery materials suppliers, according to BASF.

Over the years, the German conglomerate has been steadily expanding its operations in China, with 27 major wholly-owned subsidiaries, 11 major joint ventures, and 25 sales offices in the Greater China region, the company said in a statement sent to the Global Times on Tuesday, adding that total sales in China reached about 9.4 billion euros in 2023. “BASF has been a committed partner to Greater China since 1885,” it said.

The Chinese leader’s inspection tour in Hunan also highlighted the great potential for Hunan and the broader central and western region in both forming new quality productive forces and high-standard opening-up, economists said.

There are some very positive trends taking form in Hunan and the central and western region, as the region has shown great advantage and potential in key emerging sectors such as new-energy vehicles and other advanced industries, according to Hu Qimu, a deputy secretary-general of the digital-real economies integration Forum 50, pointing to robust computing capacity and clean energy as examples of advantages.

Forming advanced industries in the central and western region is in line with China’s crucial task of better coordinating between development and security, Hu said.

Take Hunan as an example, the province has been boosting innovation and opening-up in recent years. In 2023, Hunan’s R&D investment growth ranked fifth in the country; and the added value of its high-tech industries grew by 8.9 percent year-on-year to 1.1 trillion yuan, according to official data. Also in 2023, Hunan’s total imports and exports hit 617.5 billion yuan, with imports surging 14.6 percent to exceed 200 billion yuan for the first time. Hunan’s trade with Belt and Road Initiative partners is growing rapidly, accounting for 52.4 percent of its total trade in 2023.

(Global Times)

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