Library:The governance of China/Chapter 4: Economic Development

Chapter 4: Economic Development, Xi Jinping: The Governance of China, Volume I.

Economic Growth Must Be Genuine and Not Inflated

November 30, 2012
Main points of the speech at a symposium with non-Party members held by the CPC Central Committee.

Since the beginning of this year, China has been confronted with a complex international economic situation, as well as the demanding tasks of reform, development and stability. By taking a balanced and coordinated approach to development, we have focused on transforming our economic growth model. Following the general guideline of making steady progress, we have acted promptly to improve macro control and placed more emphasis on sustainable development. So far, we have seen positive results in many areas, including steady economic growth, adjustment of the economic structure, reform to a deeper level, and improvement of the people's well-being.

Although we have a generally positive analysis of China's economic and social development, we must not underestimate the risks and challenges facing us now and in the near future. We must be aware that the pace of world economic growth will continue to be slow, the problem between sluggish demand and overcapacity continues to grow, and domestic companies are troubled by rising costs and weaknesses in their capacity to innovate. The conflicts between the environment, natural resources and economic growth are becoming more serious.

Every coin has two sides. We must see both the advantages and disadvantages in the international and domestic situations, make full preparations for adversity, and strive to get the best possible results.

Next year will be the first full year to see the implementation of the decisions made by the Party's 18th National Congress. It is very important to do a good job of our social and economic development. We should focus on improving the quality and efficiency of economic growth, make steady progress, encourage innovation, lay a solid foundation for future development, press forward with reform and opening up, and realize sustainable and healthy economic development together with social stability and harmony.

First, we must maintain reasonable economic growth by continuing with our proactive fiscal and prudent monetary policies, and increase the natural vitality and motive force that drive economic growth. We must pursue real rather than inflated economic growth. In other words, we want efficient, high-quality and sustainable growth.

Second, we must consolidate the position of agriculture as the foundation of the economy, increase support for agriculture, improve our policies that benefit farmers and bring prosperity to them, accelerate modernized operation of agriculture, and ensure the supply of grain and other important agricultural products.

Third, we must make substantial progress in economic restructuring, expand domestic demand while stabilizing external demand, intensify our industrial restructuring and upgrading, and promote well-planned and healthy urbanization.

Fourth, we must carry out reform to improve the socialist market economy, have a good top-level design, carry out timely and targeted reform measures, combine steady progress in overall reform with breakthroughs in specific areas, experiment boldly, and pursue substantial results.

Fifth, we must improve the people's standard of living, with a particular focus on low-income groups, provide subsidies to poor students in colleges and universities, keep the employment market steady while doing all we can to expand it, and improve the urban and rural social security system. We will encourage the people to achieve prosperity through hard work, thereby combining the aim of the Party and the government's work with the goals that ordinary people strive for.

Open Wider to the Outside World

April 8, 2013
Main points of the speech at a discussion of representatives of Chinese and foreign entrepreneurs during the Boao Forum for Asia Annual Conference 2013.

The prospects for China's economic development are bright. China will make greater contributions to the world as it pushes forward reform and opening up, accelerates the transformation of the growth model, implements the opening-up policy, and provides a better economic environment and favorable conditions for foreign enterprises.

Entrepreneurs, who are also the main participants of this forum, are an important force in creating jobs and wealth and in promoting development and cooperation. Your decisions will have a major impact on the Asian economy as well as the wider world. I would like to take this opportunity to listen to your views and exchange ideas with you.

The world economy is still in a phase of instability and uncertainty, and recovery will be a lengthy process of advances and setbacks. In contrast, economic growth in Asia is relatively robust. In this context, China's economic prospects have become an issue of universal interest. I would like to share with you my views on this topic.

China has maintained sound overall economic development. Its growth will continue in the foreseeable future as industrialization, IT application, urbanization and agricultural modernization greatly expand the domestic market. The basics of our social productive forces remain solid, our advantages in productive factors are obvious, and our management and control systems and mechanisms continue to improve.

At the 18th CPC National Congress we set the Two Centenary Goals as our objectives, and committed ourselves to the Chinese Dream of the rejuvenation of the Chinese nation. We will continue to inject new energy into the Chinese economy as we strive to realize these objectives and the Chinese Dream. As a result of our endeavors, we can be very optimistic that the Chinese economy will maintain a relatively high growth rate. China will shift its development focus to improving the quality and efficiency of growth, and make every effort to promote a green, circular, and low-carbon economy.

The Chinese market operates fairly. Every company registered in China is an important component of the country's economy. Our commitment to the socialist market economy will remain resolute. We will continue to enhance the rule of law and actively improve our investment environment so that all enterprises can enjoy equal access to the factors of production, market competition and legal protection, and the Chinese market can become fairer and even more attractive. Our policies of utilizing foreign investment and protecting the legitimate rights and interests of foreign enterprises in accordance with law will not change.

China will never close its door to the outside world. Over the past ten years it has fulfilled its promises to the WTO by creating a more open and standardized business environment. We will open up new areas and enable deeper access. Our economy will remain open to foreign investors, and we hope that other countries will extend the same access to Chinese investors. We firmly oppose protectionism in any form, and we are willing and ready to solve economic and trade differences with other countries through consultation. We actively promote the establishment of a multilateral trade system characterized by balanced and mutually beneficial development.

China's domestic development benefits the rest of the world, and first of all its neighbors. In 2012 almost 16 million Chinese people traveled to our neighboring countries in east and southeast Asia. China has made a substantial contribution to Asia's economic development. In the next five years China's imports will reach US$ 10 trillion-worth and its outbound investment is expected to grow rapidly. China is making great efforts to increase its connections with its neighbors, to the advantage of both the regional and the world economy.

China remains committed to reform and opening up, and we will improve the relevant policies. We will continue to improve the capacity and quality of our services, and provide a better environment for foreign entrepreneurs to invest and launch ventures in China. We hope that foreign enterprises will seize these opportunities to achieve further development.

The "Invisible Hand" and the "Visible Hand"

May 26, 2014
Main points of the speech at the 15th group study session of the Political Bureau of the 18th CPC Central Committee which Xi presided over.

We should let the market play the decisive role in allocating resources, while allowing the government to better perform its functions. This is a theoretical and practical issue of great importance. A correct and precise understanding of this issue is very important to further the reform and promote the sound and orderly development of the socialist market economy. We should make good use of the roles of both the market, the "invisible" hand, and the government, the "visible" hand. The market and the government should complement and coordinate with each other to promote sustained and sound social and economic development.

The Third Plenary Session of the 18th CPC Central Committee pointed out that economic structural reform is the focus of continuing the reform comprehensively. The underlying issue is how to strike a balance between the functions of the government and the role of the market, and let the market play the decisive role in allocating resources and the government better perform its functions.

The proposal to let the market play the decisive role in allocating resources is a breakthrough in our Party's understanding of the laws governing the development of socialism with Chinese characteristics as well as a new achievement in the sinicization of Marxism. It symbolizes that the socialist market economy has entered a new stage.

To let the market play the decisive role in allocating resources and the government better perform its functions we must have a good understanding of the relationship between the role of the market and that of the government, which represents a core issue in our economic structural reform.

The Third Plenary Session of the 18th CPC Central Committee changed the market's role in allocating resources from "basic" to "decisive." Although only one word was altered, the market's role was redefined. "Decisive role" is a continuation and extension of "basic role."

Letting the market play the decisive role in allocating resources and letting the government better perform its functions are not contradictory. It does not mean that the market can replace the government's functions, nor vice versa.

Actually this is an effort to keep our economic reform targeted at existing problems. For more than two decades our socialist market economy has been developing, yet there are still quite a number of problems and drawbacks that inhibit the vitality of market entities and prevent the laws of the market and value from fully playing their roles.

If these problems are not solved properly it will be difficult to establish a well-developed socialist market economy, further transform the development model and adjust the economic structure.

We should remain committed to the reform to establish and improve the socialist market economy and bring the reform to a deeper and wider level. We should reduce the government's direct involvement in resource allocation and its direct interference in micro-economic activities. We should step up efforts to develop a uniform market system characterized by openness and orderly competition, and set fair, open and transparent market rules. The government should refrain from getting involved in the economic activities that the market can regulate effectively, and let the market do what the government is not supposed to do, so that the market can play its role of maximizing the effectiveness and efficiency of resource allocation, and enterprises and individuals can have more room to develop the economy and create wealth with vigor and vitality.

Balanced macro control and effective governance are the intrinsic requirements for giving full play to the strength of the socialist market economy. To ensure that the government better performs its functions, we should transform government functions, further the reform of the administrative system, use new administrative methods, improve the macro-control system and enhance the monitoring of market activities. We should strengthen and improve public services, and promote social fairness, justice and stability, as well as common prosperity.

Governments at all levels should exercise administration strictly in accordance with the law, and conscientiously fulfill their responsibilities. The government should manage well all matters that fall within its purview, and appropriately delegate powers that should be delegated. The government should make resolute efforts to avoid overstepping its bounds or failing to play its due role.

We should uphold the Party's leadership and let the Party play its role as the leadership core in exercising overall leadership and coordinating all efforts. This is an important feature of our socialist market economy. Over the last three decades since the introduction of the reform and opening-up policy, we have made marked achievements in our social and economic development, and the people's living standards have improved noticeably. These successes are attributable to the fact that we have firmly upheld the Party's leadership, and given full play to the roles of Party organizations at all levels and of all Party members. In China, the Party's strong leadership is the basic guarantee for the government to play its due role.

While comprehensively continuing the reform, we should uphold and develop our political advantages, and use them to guide and push forward the reform. We should motivate all the people to make constant efforts for a better socialist market economy.

Today, officials at all levels, especially leading officials, should continue to learn through practice, and put what they have learned into practice, study new problems and draw on new experiences. They should learn to correctly use both the "invisible hand" and the "visible hand," and become experts in balancing the relationship between the government and the market.

Transition to Innovation-Driven Growth

June 9, 2014
Part of the speech at the 17th General Assembly of the Members of the Chinese Academy of Sciences and the 12th General Assembly of the Members of the Chinese Academy of Engineering.

Currently, all Party members and people of all ethnic groups are striving for the completion of the building of a moderately prosperous society in all respects and the realization of the Chinese Dream. The 18th CPC National Congress put forward an important plan for the implementation of an innovation-driven strategy, and emphasized that scientific and technological innovation is pivotal to improving social productivity and the comprehensive national strength, so it must be put in a core position in our overall national development. This is an important strategy made by the CPC Central Committee, following a general analysis of the domestic and international situations, and of the overall picture of our development.

The 21st century heralds a new round of scientific, technological and industrial revolution. Global scientific and technological innovation has exhibited new trends and features. Cross-disciplinary integration is accelerating, new disciplines continue to emerge, and scientific frontiers keep spreading. Significant breakthroughs are being made or expected in basic scientific fields such as the structure of matter, the evolution of the universe, the origin of life and the nature of consciousness. Widespread diffusion of information, biological, new-material and alternative-energy technologies has brought about a green, intelligent and ubiquitous technological revolution.

The boundaries between research into basic and applied sciences, technological development and industrialization in the traditional sense are becoming increasingly blurred. The chain of scientific and technological innovation has become more flexible, technology upgrading and conversion have become quicker, and industry upgrading continues to speed up.

Scientific and technological innovation is constantly transcending geological, organizational and technological limitations. It intensifies the competition between innovation systems and makes innovative strategic competition more important in the competition for comprehensive national strength. Scientific and technological innovations, like a fulcrum which is said to be able to lever the earth, always create miracles. This has been proved in the development of contemporary science and technology.

In face of the new trends of scientific and technological innovation, the world's major countries are seeking to make new scientific and technological breakthroughs and gain competitive edges in future economic as well as scientific and technological development. We cannot afford to lag behind in this important race. We must catch up and then try to surpass others.

Since the introduction of the reform and opening-up policy some three decades ago, China has made remarkable achievements in social and economic development. Its economy has leapt to No. 2 in the world, and many of its major economic indices rank high on the world's list.

Nevertheless we must be clear that our economy, though large in size, is not strong. Its growth, though fast, is not of high quality. The extensive development model featured by economic growth mainly driven by factor inputs such as natural resources is not sustainable.

Now, the total population of well-off countries in the world is about 1 billion, while China has more than 1.3 billion people. If we are all to become modernized, the well-off population must more than double. If we are to consume as much energy in production and daily lives as the present well-off people do, all the existing resources in the world would be far from enough for us! The old path seems to be a dead end. Where is the new road? It lies in scientific and technological innovation, and in the accelerated transition from factor-driven and investment-driven growth to innovation-driven growth.

A few days ago, I read an article which argued that the Third Industrial Revolution would be a Robot Revolution. It asserted that robots would change the pattern of the global manufacturing industry, and China would become the world's largest robot market. The International Federation of Robotics predicted that the Robot Revolution would create a market value of trillions of US dollars.

Hardware and software for producing robots are becoming increasingly mature, the production cost keeps dropping and the functions robots can perform are more diversified thanks to the integration between robot technology and the new generation of information technology, such as big data, cloud computing and the mobile Internet, and the rapid development of 3D printing and artificial intelligence. Military unmanned aerial vehicles, self-driving cars and home-service robots have been put into application. Some artificially intelligent robots have pretty sturdy self-thinking and learning ability.

Robots are dubbed "pearls on the crown of the manufacturing industry." A country's achievement in robotics research, development, manufacturing and application is an important yardstick with which to measure its level of scientific and technological innovation and high-end manufacturing. Major robot-producing companies and countries have stepped up their efforts to gain advantages in terms of technology and markets.

I couldn't help wondering: China will be the largest robot market in the world, yet can its technology and manufacturing capability sustain it through the competition? We should make better robots and seize bigger market shares. There are many such new technologies and new fields. We should size up the situation, take the overall picture into account, and make plans as soon as possible and implement them solidly.

To carry out the innovation-driven strategy, the basic thing for us is to enhance our independent innovation ability, and the most urgent thing in this regard is to remove institutional barriers so as to unleash to the greatest extent the huge potential of science and technology as the primary productive force. Most importantly, we should unswervingly follow an independent innovation path featuring Chinese characteristics, stick to the guiding principles of independent innovation, leap-frogging development in key sectors, and development supported by science and technology and oriented towards the future, and speed up the pace of building an innovative country.

Years of painstaking efforts have resulted in great progress for China in science and technology, and China has entered the advanced ranks in the world in some important fields. In certain fields, it has become a "forerunner" or "parallel runner" instead of a "follower." China has entered a vital period, when new industrialization, application of information technology, urbanization and agricultural modernization are forging ahead simultaneously, in parallel or interactively. This has created ample space and an unprecedentedly strong momentum for independent innovation.

I have repeatedly said that the great rejuvenation of the Chinese nation can in no way be realized easily. In fact, the stronger we become, the greater resistance and pressure we will encounter. That's why we say that timing and resolution are vital, as historical opportunities are often ephemeral. Now we have an important historical opportunity to promote scientific and technological innovation. We must not miss it, but seize it tightly.

We are blessed with a solid material foundation laid over the 30-plus years of reform and opening up, and the fruits of persistent innovation, which are favorable for the innovation-driven strategy. Hence, we should take the initiative and adopt a proactive strategy. As to scientific and technological policies of great strategic value to our country and nation, we should make up our minds and act without any hesitation. Otherwise, we will let slip the historical opportunity, and may even have to pay a higher price.

In March 2013 I talked about scientific and technological innovation at a group discussion with scientists during the First Session of the 12th National Committee of the Chinese People's Political Consultative Conference. Generally speaking, the foundation of our scientific and technological innovation is not solid enough; our independent innovation ability, especially in the area of original creativity, is not strong. We still have to depend on others for core technology in key fields. Only by holding key technology in our own hands can we really take the initiative in competition and development, and ensure our economic security, national security and security in other areas.

We cannot always decorate our tomorrows with others' yesterdays. We cannot always rely on others' scientific and technological achievements for our own progress. Moreover, we cannot always trail behind others. We have no choice but to innovate independently.

Facts prove that it is self-sufficiency that has enabled the Chinese nation to stand among the world's independent nations, and independent innovation is the only path to the summit of science and technology. With this understanding, we should waste no time in making a difference. We cannot keep on talking year in and year out but do nothing about making a drastic change.

Of course, we don't mean to make independent innovation behind closed doors or all by ourselves. We shall never reject good experiences from others, from any part of the world. We should engage in international scientific and technological exchanges and cooperation more proactively, and make good use of both domestic and international resources.

Science and technology are global and time-sensitive, so we must have a global vision when we move forward. Currently, important scientific and technological breakthroughs and their accelerated application are highly likely to reshape the global economic pattern, and change the nature of industry and economic competition.

In traditional international playgrounds, the rules are set by others, and we play games by the established rules. Seizing the important opportunities made available by the new scientific, technological and industrial revolution means that we should be part of the games, and yet we can play a major role in the construction of the playgrounds, even at the beginning, so that we can make rules for new games. We will not have a chance if we are not capable enough to be part, indeed a major part, of the construction team. Opportunities are always for those who are fully prepared, and for those who are independent-minded, aspiring and persevering. We cannot move forward by leaps and bounds unless we do so with innovation.

Geo-scientist Li Siguang said, "Science exists because of new discoveries made by it. It would die without new discoveries." French writer Victor Hugo said, "Things created are insignificant when compared with things to be created." The direction of our scientific and technological development is innovation, innovation and more innovation. We should attach great importance to breakthroughs in basic theories, step up the construction of scientific infrastructure, continue to push ahead with basic, systematic and cutting-edge research and development, and provide more resources for independent innovation. We should actively integrate and make good use of global innovation resources. In response to our current and future needs, we should selectively participate in the construction and use of the world's major scientific appliances, and research and development bases and centers.

We should seize strategic opportunities in key scientific and technological realms, select strategically important segments and priority areas relevant to overall and long-term development, and promote collaborated innovation and open innovation through effective and rational resource allocation. We should build an efficient and strong supply system of key generic technology, work hard to make great breakthroughs in key technology and hold key technology in our own hands.

"A person with sharp ears can hear sounds others cannot, and a person with keen vision can see things others cannot." There is no end to scientific and technological innovation. Scientific and technological competition is like short-track speed skating. When we speed up, so will others. Those who can skate faster and maintain a high speed longer will win the title. Xun Zi asserted, "If a gallant steed leaps only once, it can cover a distance of no more than ten steps; if an inferior horse travels for ten days, it can go a long way because of perseverance. If a sculptor stops chipping halfway, he cannot even cut dead wood, but if he keeps chipping, he can engrave metal and stone."

Our scientists and engineers should bravely shoulder their responsibilities, overtake others, and find the right direction, to which they should stick. They should have the courage and confidence to blaze new trails, overcome difficulties and seek excellence, and audaciously make world-leading scientific and technological achievements.

The implementation of an innovation-driven development strategy is a systematic project. Scientific and technological achievements can generate real value and pay off only if they meet the needs of the country, the people and the market, and only after they have gone through the stages of research, development and application.

I have been wondering about the reason why our science and technology gradually lagged behind from the late Ming (1368-1644) and early Qing (1644-1911) dynasties. Studies show that Qing Emperor Kangxi was very interested in Western science and technology. He invited Western missionaries to give him lectures on astronomy, mathematics, geography, zoology, anatomy, music and even philosophy. More than 100 books on astronomy were introduced to him. When did he study these subjects, and for how long? He continuously studied them for two years and five months sometime between 1670 and 1682.

He began his study quite early, and learned quite a lot. The problem was that, at that time, although some people were interested in Western learning and learned quite a lot of it, they did not apply what they had learned to social and economic development. Rather, they simply talked, without taking any action.

In 1708 the Qing government asked some foreign missionaries to draw a map of China. It took them ten years to complete The Map of Imperial China – the first of its kind at that time. However, this important work was confined to the imperial storehouse as a top-secret document, away from the public eye. Therefore, it had no impact on social or economic development. But the Western missionaries who had drawn the map took the data back to the West and had it published. Hence, for quite a long time the West knew China's geography better than the Chinese people did.

What can we learn from this story? It means that science and technology must be combined with social development. No matter how much one has learned, it cannot possibly have any impact on society if the knowledge is merely put aside as a novelty, refined interest, clever trick or doubtful craft.

For years, our scientific and technological achievements could not be smoothly converted to productivity. Why? Because there were institutional bottlenecks in the scientific and technological innovation chain and loose connections between the various links in the innovation and conversion process. It is like a relay race: The second baton carrier is not there or has no idea of where to head when the first arrives.

To solve this problem, we must further scientific and technological system reform, change mindsets and remove institutional barriers hindering scientific and technological innovation, properly handle the relationship between government and market, and better integrate science and technology with social and economic development. We must open a channel through which science and technology can boost industrial, economic and national development. We must spur innovation with reform, accelerate the construction and improvement of a national innovation system, and let the well water of innovation gush out fully.

If we compare scientific and technological innovation to a new engine driving our development, reform is an indispensable ignition system with which to start the engine. We should take more effective measures to improve the ignition system, and let the new engine run at full speed.

While carrying out the reform of the scientific and technological system we should prepare ourselves to solve difficult problems, and implement the relevant decisions made at the Third Plenary Session of the 18th CPC Central Committee. We should put scientific and technological innovation in the center of our overall national development, speed up the preparations for the innovation-driven development strategy, and draw road maps and timetables for important tasks in this regard.

The reform of the scientific and technological system should be carried out at the same time as social and economic reform. We should reform the planning and resource allocation mechanism for the national scientific and technological innovation strategy, improve the performance evaluation system and incentive policies for officials, further cooperation between industries, universities and research institutes, and solve key problems obstructing the conversion of scientific and technological achievements as soon as possible.

We should vigorously improve coordination in scientific and technological innovation so as to avoid fragmentation and isolation, as well as overlapping and repetition in campaigns launched by departments in various fields. We should set up a national innovation system within which experts in all fields can interact and collaborate to achieve high efficiency.

We should improve the basic system of scientific and technological innovation, build and improve the national scientific and technological reporting system, and make innovations in the survey system, and national scientific and technological management information system as soon as possible, so as to maximize resource sharing. We should deploy the innovation setup around the industrial setup as well as the capital setup around the innovation setup. We should focus on national strategic goals and pool resources to tackle key scientific and technological problems pertaining to the national economy and the people's livelihood.

We should move faster to improve the basic research system, with the focus on cutting-edge basic research, key common technology, and high-tech for public welfare and that of strategic importance. We should double our efforts in completing important national scientific projects, and race to the front of international scientific research. While centering on scientific and technological innovation, we should also accelerate innovation in product, brand, industrial structure and business model. We should carry out the innovation-driven strategy throughout the modernization process.

While furthering the reform of scientific and technological systems, we should pay attention to a magic wand vital to our success – our socialist system. We have made many noticeable achievements in science and technology this way. This practice must not be given up! We should let the market play a decisive role in allocating resources and the government play its role better. We should step up planning and coordination as well as collaborative innovation. We should pool our efforts to accomplish big tasks, and focus on important, cutting-edge and basic research.

"To accomplish extraordinary feats, we must wait for extraordinary persons." Competent personnel are the most crucial factor for scientific and technological innovation. Respecting them has long been a fine Chinese tradition. As described in The Book of Songs, King Wen of the Zhou Dynasty respected competent people, who hence flocked to him, so his country became strong and prosperous. They are the most important factors for a country's long-term development. We need them for our great national rejuvenation. The more talented, the better; the more knowledgeable, the better.

China is a country rich in manpower and brainpower. The wisdom of our 1.3 billion people is our most precious possession. Knowledge is power, and competent personnel shape the future. If we want to get to the forefront of global scientific and technological innovation we must discover, nurture and retain such people throughout the whole process of innovation. We must train a large number of high-caliber, creative scientists and engineers.

We are proud of having the greatest number of scientists and engineers in the world. Nonetheless, we face a serious structural deficiency of innovative scientists and engineers, particularly world-class and other leading and high-caliber ones. The education and training that our engineers have received so far are not geared towards production and innovation.

"If you want one year of prosperity, then grow grain; if you want ten years of prosperity, then grow trees; if you want one hundred years of prosperity, then you cultivate people." We should make human resource development a top priority for scientific and technological innovation. We should improve the mechanism for training, recruiting and using competent personnel. We should work hard to foster a contingent of world-class scientists and engineers and other leading and high-caliber ones, as well as high-level innovation teams. We should focus on training young innovative scientists and engineers for the front lines.

We should perfect our competence-nurturing mechanism according to personnel development laws. "We should respect a tree's nature, and let it grow freely." We should not seek quick success and instant benefits, or try to help young shoots grow by dragging them up. We should encourage both competition and cooperation, and promote a rational and orderly flow of competent personnel. We should attract outstanding experts and scholars from overseas for our scientific and technological innovation. We should create a social environment that encourages innovation and values success while tolerating well-intentioned failure. We should improve the competent-personnel evaluation system and create ample space for such people to give full play to their talents.

The future belongs to the young. Innovative young people are the source of our creativity and the best hope for our scientific and technological development. "I beg Old Man Heaven to bestir himself, and send down talented people of more kinds than one." Academicians should not only be pioneers in scientific and technological innovation, but also guides for young people. I hope that they will shoulder their responsibility in nurturing young scientists and engineers, instruct them through words and actions, and continuously discover, train and recommend competent personnel, so that innovative people can stand out from the crowd. Young scientists and engineers should be dedicated to science, develop innovative thinking, tap innovative potential and enhance innovative ability. They should continue to push ahead while learning from previous generations.

Revolutionize Energy Production and Consumption

June 13, 2014
Main points of the speech at the sixth meeting of the Central Leading Group on Financial and Economic Affairs.

Energy security is an issue of general and strategic significance in the economic and social development of a country. It is crucial to driving national development and prosperity, improving standards of living, and ensuring lasting social peace and stability. In the face of changes in energy demand and supply and new developments in the international energy landscape, China must ensure national energy security by increasing energy production and creating a revolution in consumption. This is a long-term strategy, but it must be supported by key tasks and major steps that require immediate action.

After years of development, China has become the world's largest energy producer and consumer, with an energy supply structure that includes coal, electricity, petroleum, natural gas, new energy, and renewable energy. Remarkable improvements have been made in technology and equipment, and in the efficiency of both domestic and industrial energy use. Although China has achieved great success in energy development, it still faces a range of challenges, including huge pressure on the demand side, a number of supply limitations, serious environmental damage caused by energy production and consumption, and outdated technology. We must develop a strategic overview of national development and security to assess the situation, and then define a sound energy blueprint for the future.

First, we must revolutionize energy consumption, and rein in irrational energy use. We need to impose strict controls on overall energy use, effectively implement a policy in which energy conservation is the top priority, and save energy across the board in all spheres of economic and social activity. We should also adjust the structure of the energy industry, make energy conservation a priority in urbanization, and encourage an attitude to consumption characterized by diligence and thrift. We must build an energy-conserving society.

Second, we must revolutionize energy supply. To ensure energy security we must set up a supply system reliant on diversified energy sources, promote the clean and efficient use of coal, and develop non-coal energy sources, thereby creating an energy supply system driven by coal, petroleum, natural gas, nuclear energy, new energy and renewable energy. At the same time, we should upgrade our transmission and distribution network, and build more storage facilities.

Third, we must revolutionize energy technology, and upgrade the related industrial structure. We should encourage innovation in technology, in industry, and in business models, and pursue green and low-carbon energy development suited to our national conditions and adapted to positive international trends in the energy technology revolution. We will combine such innovation with new and high technology in other fields, and transform our energy technology and related industries into a new powerhouse to drive the overall industrial upgrading of our country.

Fourth, we must revolutionize the energy market. We will proceed with reform, restore energy's status as a commodity, build a system of workable competition, and put in place a mechanism in which energy prices are largely driven by the market. In addition, we will change the way that the government supervises the energy industry, and establish and improve the legal framework for energy development.

Fifth, we must enhance international cooperation in all sectors, and ensure that opening up supports energy security. While relying mainly on domestic energy sources, we will strengthen international cooperation in all sectors related to energy production and consumption, and make effective use of resources from other countries.

We need to study the 13th Five-year Plan for energy development, and work out a strategy to revolutionize energy production and consumption by 2030. We will move faster in revising energy efficiency standards. All outdated regulations must be revised, updated on a regular basis and implemented. We will continue to build large coal-fueled electricity generating power bases each with a capacity of ten million kw. We will tighten the criteria for coal-burning power stations, upgrading all those that do not meet energy conservation and emission reduction standards within a specified time, and continue to develop long-distance, high-capacity power transmission technology. New nuclear projects on the coast will be launched as soon as possible, and they will be subject to the world's highest safety standards.

In addition, China will encourage energy cooperation through the Belt and Road Initiative, and expand oil and gas cooperation with countries in Central Asia, the Middle East, the Americas and Africa. We will also intensify our efforts in energy exploration and extraction, and build more oil and gas pipelines and storage facilities. We will improve our emergency response, enhance capacity building, improve systems providing energy statistics, and launch initiatives to create, revise and abrogate laws and regulations in the energy sector.