Huang Qifan,

Executive Vice Chairman of the Academic Committee of China Institute for Innovation and Development Strategy, former Mayor of Chongqing

Distinguished President Zheng Bijian,

Distinguished leaders and experts,

It is a great pleasure to join you at today’s event. The “Proposals of the CPC Central Committee on Formulating the ‘15th Five-Year Plan’ for National Economic and Social Development,” adopted at the Fourth Plenary Session of the 20th CPC Central Committee, emphasizes “reform and innovation as the fundamental driving force” for development during the “15th Five-Year Plan” period. In my view, reform and innovation were crucial to the successful completion of the “14th Five-Year Plan” goals, and they will likewise be essential tools for achieving the the “15th Five-Year Plan” goals.

I. Achievements of the 14th Five-Year Plan Were Rooted in Reform and Innovation

Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China is set to conclude the “14th Five-Year Plan” with remarkable new achievements. These accomplishments stem from the synergistic effects of two major driving forces: reform and innovation.

On reform, major progress was as follows:

1. Major breakthroughs in economic system reform

China further improved the socialist market economy, built a high-standard market system, and significantly enhanced the vitality of market entities. The Fair Competition Review Regulations and the Private Economy Promotion Law were promulgated, establishing the framework of a unified national market and effectively reducing local protectionism and market fragmentation. Reforms on market-based allocation of production factors advanced in depth, further improving the basic institutions for property rights protection, fair competition, and social credit.

2. Breakthroughs in reforms of key sectors.

Power market reforms accelerated, achieving unified trading and competitive bidding in five provinces under China Southern Power Grid, with market-based transactions accounting for 63% of traded electricity in 2024, facilitating clean energy integration. Pilot reforms to the rural homestead system deepened, exploring the separation of ownership, qualification rights, and usage rights, granting farmers more property rights. Reforms of state-owned assets and enterprises progressed steadily, with mixed-ownership reforms enhancing the vitality and efficiency of SOEs.

3. Reform and opening-up advanced in coordination.      

China fully implemented a negative list for cross-border trade in services, eliminated all foreign investment restrictions in manufacturing, and made new strides in institutional opening-up. Actual utilized foreign investment exceeded USD 100 billion for five consecutive years. High-quality Belt and Road cooperation continued, with growing volume and efficiency of China-Europe freight trains. More institutional innovations emerged from pilot free trade zones, and the Hainan Free Trade Port is moving toward customs closure operations.

On innovation, key progress was as follows:

1. Historic breakthroughs in R&D expenditure and innovation capacity.    

In 2024, China’s total R&D expenditure exceeded RMB 3.6 trillion, up 48% from 2020 or an increase of 1.2 trillion, reaching an R&D intensity of 2.68%, above the EU average and close to the OECD average. China’s global ranking in comprehensive innovation capacity rose from 14th in 2020 to 10th in 2024. China has 26 of the world’s top 100 sci-tech innovation clusters, ranking number one globally, along with more than 460,000 high-tech enterprises and over 100,000 “little giant” SMEs.

2. Significant breakthroughs in key core technologies.

China achieved multiple world “firsts” and top performances in  fields such as quantum information, AI, manned spaceflight, lunar exploration, and deep-sea research. Annual integrated circuit output increased 72.6% from the end of the “13th Five-Year Plan”, adding 190 billion chips, with sharply rising domestic equipment adoption. High-performance computing remains world-leading, and strategic industries such as high-speed rail and large aircraft achieved independent controllability. Goals in the ten priority sectors of Made in China 2025 have been largely met.

3. A sound innovation ecosystem is taking shape.

China now has over 500,000 high-tech firms, up 83% from 2020. Enterprises account for more than 77% of national R&D spending, becoming the leading innovation actors. Young researchers under 45 lead 43.3% of major national R&D projects. The “three new” economy has reached RMB 24 trillion, accounting for 18% of GDP and emerging as a major growth engine.

Experience during the “14th Five-Year Plan” proves that reform and innovation are twin engines of China’s development. Reform removes institutional barriers and builds an enabling environment for innovation; innovation provides momentum for reform and accelerates institutional transformation. Together, they nurture new quality productive forces, move China up the global value chain, and lay a solid foundation for achieving basic socialist modernization by 2035.

II. Reform and Innovation Remain Fundamental for Achieving the “15th Five-Year Plan” Goals

The “15th Five-Year Plan” period will be a crucial stage for laying the foundation for basic socialist modernization. Reform and innovation will be essential for maintaining strategic initiative in an increasingly competitive world. We must both enhance systemic coordination to implement reform measures adopted at the Third Plenary Session of the 20th Central Committee, and strengthen innovation-driven development by integrating technological and industrial innovation to achieve high-level self-reliance in science and technology.

Reform and innovation will unlock three major development dividends:

1. The dividend of urban–rural integration.

As China faces declining population and accelerating aging, revitalizing economic dynamism requires better spatial allocation of the population. Measures proposed at the Third Plenary session must be implemented, such as granting public services based on place of residence and enabling eligible rural migrants to enjoy equal access to social insurance, housing, and compulsory education, thereby accelerating urbanization. Within 5 to 10 years, China aims to align the urbanization rates of registered and resident populations, raising overall urbanization to roughly 75% by 2035.

2. The dividend of a unified national market.

China is the world’s only ultra-large-scale unified market with a common legal system, shared language, a single currency, and broadly similar infrastructure nationwide. Such a market creates economies of scale, learning effects, and Wright’s law effects[1], greatly reducing business costs and generating new industries. That’s the reason why foreign investment continues to flow into China.

However, issues such as local protectionism and fragmented regulation still hinder efficiency, leading to problems like involution, overcapacity, and low-quality competition. During the “15th Five-Year Plan”, China must consolidate progress under the “Five Unifications and One Openness,” promote market-based allocation of production factors, adjust central–local fiscal relations, and regulate government and industry regulatory behavior to form a unified, open, and orderly national market.

3. The dividend of new quality productive forces.

The new wave of technological revolution is characterized by multiple breakthroughs and deep integration across fields, creating many promising growth pathways. China’s rich application scenarios, complete industrial chains, and large talent pool offer fertile ground for nurturing new quality productive forces. Yet challenges remain, including relatively weak basic research, lagging education reforms, and insufficient integration of scientific and industrial innovation.

To address these gaps, the Fourth Plenary session called for strengthening original innovation and breakthroughs in key core technologies, improving the new national system, and focusing national efforts on areas such as integrated circuits, industrial mother machines, high-end instruments, basic software, advanced materials, and bio-manufacturing. It also emphasized deep integration of sci-tech and industrial innovation and coordinated advancement of education, science, and talent development to build globally influential hubs.       Once implemented, these measures will unleash new quality productive forces and inject powerful momentum into China’s high-quality development.

Ladies and gentlemen,

The decisions adopted at the 20th National Congress of the CPC and the Third and Fourth Plenary Sessions of the 20th Central Committee guide China’s new journey toward modernization. They embody the strategic vision and reform resolve of the CPC Central Committee with Comrade Xi Jinping at its core. As long as we study and implement them earnestly and work with determination, the bright prospects of Chinese modernization will surely come within reach.

[1]When the cumulative output doubles, the unit cost will decrease by a fixed proportion. The reasons are as follows: Proficiency improves with increased practice, processes are optimized, scales expand, efficiency rises, and supply chains mature. All these factors will naturally drive down costs.