Understanding China’s economy often entails decoding oblique ideological jargon. Here’s a new one to add to the glossary: “new quality productivity.”
Chinese leader Xi Jinping first used the phrase last September (link in Chinese). Since then, the party propaganda machine has repeatedly touted the concept’s “great theoretical and practical significance,” urging the cadres and the general populace to “deeply understand and grasp” it. Major state-run newspapers have given the concept prominent treatment. This week, Economic Daily ran a front-page editorial on how to achieve “new quality productivity.”
Boiled down, “new quality productivity” appears to mean leveraging scientific and technological innovation to turbocharge economic productivity—more bang for each unit of buck.
But Beijing has long extolled the importance of innovation for accelerating national development and catching with competitors like the US. So why the buzzy new phrase now to convey a message it has been prioritizing for years?
“New quality productivity” to boost “high quality growth”
Some clues may be found in another vague party catchphrase: “high quality” economic growth.
The phrase began gaining traction in 2021, having been enshrined in China’s latest national-level five-year plan and regularly promoted by Xi himself.
China analysts interpreted the focus on “quality” economic growth to signal a policy pivot: away from an economic model dependent on infrastructure and real estate spending, and toward consumption, exports, and business investment. It was also a roundabout way of saying China’s days of double digit GDP increases are over—a delicate message given that the party’s legitimacy is closely tied to delivering sustained economic growth.
It would appear that a similar narrative spin is now being applied to the “new quality productivity” concept. Indeed, China’s growth rate in total factor productivity—a metric for how efficiently labor and capital are deployed—has declined significantly since the global financial crisis. Recent months’ new focus on “new quality,” then, may be another way of gingerly acknowledging slowing growth in China’s productivity.
In December, Economic Daily ran an op-ed by a researcher specializing in “Xi Jinping thought.” The author noted that “new quality productivity is an important driving force for the high quality development” of China.
It’s a mouthful. It’s also another way of saying the roaring economic growth of yesteryear are now a thing of the past.