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How Finance Supports the Development of New Quality Productive Forces

Feb 27-2026   



*This article is based on a keynote speech delivered by Wang Yiming, Vice Chairman of the China Center for International Economic Exchanges.

Scientific and Technological Innovation: The Core Element of New Quality Productive Forces

In recent years, China's capacity for scientific & technological innovation has increased significantly. By 2025, total R&D expenditure is projected to exceed 3.9 trillion yuan, with R&D intensity reaching 2.8% for the first time, surpassing the average level of OECD countries. However, it must also be acknowledged that China's innovation system still has shortcomings and weaknesses. Firstly, its capacity for original innovation remains insufficient. Secondly, it faces constraints in critical core technologies. Thirdly, there is a relative scarcity of leading scientific and technological talent.

The proposal of the 14th Five-Year Plan explicitly states: "Strengthen the orientation towards original innovation in scientific research and technological development, optimise the environment conducive to original and disruptive innovation, and produce more landmark original achievements." To achieve this goal, I believe three transformations must be implemented. Firstly, there must be a shift from merely following to running alongside or leading in more fields. Secondly, transition from end-product innovation to breakthroughs in key core technologies. Thirdly, evolve from integrated innovation to original innovation.

Industrial Innovation Is a Vital Vehicle for New Quality Productive Forces

China's manufacturing sector is undergoing a profound transformation, shifting from historical cost advantages to comprehensive competitive strengths. While traditional low-cost advantages can be replicated, integrated competitive strengths are far more difficult to replicate. These include: first, the advantage of a super-large market; second, the strength of a complete industrial chain; third, the wealth of talent resources; fourth, the edge in the digital economy; and fifth, the advantage in new energy.

The future of industrial innovation and development lies in intelligence, convergence and sustainability. During the 15th Five-Year Plan period, integrating scientific and technological innovation with industrial innovation will require addressing both "hardware" and "software" challenges. In terms of "hardware", accelerate the deployment of concept verification and pilot testing platforms, expand application scenarios, and enhance openness. In terms of "software", reforms should be implemented to grant rights to scientific achievements produced during employment, giving researchers greater autonomy in distributing revenue from technology transfer. A separate asset management system should also be established for such achievements.

Fostering a Virtuous Cycle of "Science&Technology, Industry and Finance"

Science&technology, industry and finance are three distinct yet interconnected domains. While each operates under its own paradigms, evaluation systems and developmental patterns, they are intrinsically interdependent and mutually reinforcing. Together, they form a bidirectional cycle embedded within the prevailing economic systems and developmental paradigms. Scientific&technological innovation serves as the driving force behind this cycle. It provides new technologies and products for industrial development, driving industrial growth and innovation. Industry transforms scientific and technological achievements into scale applications, and industrial innovation is difficult to achieve independently of scientific and technological breakthroughs.

The relationship between science&technology, industry and finance is constantly evolving. The new round of scientific and technological revolution and industrial transformation, centred on artificial intelligence, is having a profound impact on the development ecosystems of industry and finance. There is an urgent need to accelerate the development of a science&technology finance system that supports scientific&technological innovation.

In order to transition China's economy from a debt-driven development model centred on the "real estate-land finance-financial" cycle to an innovation-driven model based on the "science&technology-industry-finance" cycle, it is necessary to expand the scope of commercial banks' support for scientific and technological innovation, while also leveraging the pivotal role of capital markets more effectively. This involves developing diversified equity financing, promoting the development of a high-quality bond market, and building a modern financial system that meets the needs of scientific and technological innovation. To this end, the following measures can be implemented:

Firstly, expand the scope for banking financial institutions to support scientific and technological innovation. Secondly, optimise the investment-lending linkage model. Thirdly, establish a "Science and Technology Board" within the bond market. Fourthly, encourage the development of venture capital. Fifthly, enhance the capacity of the equity market to support scientific and technological innovation. Sixthly, refine the mechanisms for financing, risk-sharing and compensation. Seventhly, strengthen the role of technology in enabling financial services.


How Finance Supports the Development of New Quality Productive Forces

Feb 27-2026   



*This article is based on a keynote speech delivered by Wang Yiming, Vice Chairman of the China Center for International Economic Exchanges.

Scientific and Technological Innovation: The Core Element of New Quality Productive Forces

In recent years, China's capacity for scientific & technological innovation has increased significantly. By 2025, total R&D expenditure is projected to exceed 3.9 trillion yuan, with R&D intensity reaching 2.8% for the first time, surpassing the average level of OECD countries. However, it must also be acknowledged that China's innovation system still has shortcomings and weaknesses. Firstly, its capacity for original innovation remains insufficient. Secondly, it faces constraints in critical core technologies. Thirdly, there is a relative scarcity of leading scientific and technological talent.

The proposal of the 14th Five-Year Plan explicitly states: "Strengthen the orientation towards original innovation in scientific research and technological development, optimise the environment conducive to original and disruptive innovation, and produce more landmark original achievements." To achieve this goal, I believe three transformations must be implemented. Firstly, there must be a shift from merely following to running alongside or leading in more fields. Secondly, transition from end-product innovation to breakthroughs in key core technologies. Thirdly, evolve from integrated innovation to original innovation.

Industrial Innovation Is a Vital Vehicle for New Quality Productive Forces

China's manufacturing sector is undergoing a profound transformation, shifting from historical cost advantages to comprehensive competitive strengths. While traditional low-cost advantages can be replicated, integrated competitive strengths are far more difficult to replicate. These include: first, the advantage of a super-large market; second, the strength of a complete industrial chain; third, the wealth of talent resources; fourth, the edge in the digital economy; and fifth, the advantage in new energy.

The future of industrial innovation and development lies in intelligence, convergence and sustainability. During the 15th Five-Year Plan period, integrating scientific and technological innovation with industrial innovation will require addressing both "hardware" and "software" challenges. In terms of "hardware", accelerate the deployment of concept verification and pilot testing platforms, expand application scenarios, and enhance openness. In terms of "software", reforms should be implemented to grant rights to scientific achievements produced during employment, giving researchers greater autonomy in distributing revenue from technology transfer. A separate asset management system should also be established for such achievements.

Fostering a Virtuous Cycle of "Science&Technology, Industry and Finance"

Science&technology, industry and finance are three distinct yet interconnected domains. While each operates under its own paradigms, evaluation systems and developmental patterns, they are intrinsically interdependent and mutually reinforcing. Together, they form a bidirectional cycle embedded within the prevailing economic systems and developmental paradigms. Scientific&technological innovation serves as the driving force behind this cycle. It provides new technologies and products for industrial development, driving industrial growth and innovation. Industry transforms scientific and technological achievements into scale applications, and industrial innovation is difficult to achieve independently of scientific and technological breakthroughs.

The relationship between science&technology, industry and finance is constantly evolving. The new round of scientific and technological revolution and industrial transformation, centred on artificial intelligence, is having a profound impact on the development ecosystems of industry and finance. There is an urgent need to accelerate the development of a science&technology finance system that supports scientific&technological innovation.

In order to transition China's economy from a debt-driven development model centred on the "real estate-land finance-financial" cycle to an innovation-driven model based on the "science&technology-industry-finance" cycle, it is necessary to expand the scope of commercial banks' support for scientific and technological innovation, while also leveraging the pivotal role of capital markets more effectively. This involves developing diversified equity financing, promoting the development of a high-quality bond market, and building a modern financial system that meets the needs of scientific and technological innovation. To this end, the following measures can be implemented:

Firstly, expand the scope for banking financial institutions to support scientific and technological innovation. Secondly, optimise the investment-lending linkage model. Thirdly, establish a "Science and Technology Board" within the bond market. Fourthly, encourage the development of venture capital. Fifthly, enhance the capacity of the equity market to support scientific and technological innovation. Sixthly, refine the mechanisms for financing, risk-sharing and compensation. Seventhly, strengthen the role of technology in enabling financial services.