To give the article a head start, keep in mind that China is one of the fastest growing countries in the world. It is still a developing country, but its performance is certainly much better than many developed countries in the world. The rapid industrialization, modernization of technology and good policy making, all have contributed to the success of the country.
Recent industrial growth based on innovation has been very successful for China’s economy, leading to the country’s growth. The country’s transition to innovation-driven growth intensified during the pandemic. Shocking, right? It is reported to have added a lot of value to the country’s GDP.
There has been an increase in new industries and new business models in the country. They have seen an upward trajectory during the time of the pandemic, as other countries struggled to tackle the COVID-19 virus. The value added by these newly introduced sectors is nearly 2.62 trillion dollars, which contributes to 17.08% of the GDP, an increase of almost 0.7% from the previous year, which indicates that these new sectors have experienced strong growth even during the pandemic.
According to reports, the innovation-driven sector is expected to grow tremendously by 2035, contributing a third of GDP. Moreover, it is expected to reach 50% of GDP by mid-century, when the country is expected to have reached the second centenary goal of becoming a large socialist economy.
What are the “three new” economies?
The “three new” economy refers to the collection of all economic activities in the country that contribute to the growth of growth driven by scientific and technological innovation in China. To go into details, these include new economic activities carried out by the new technological and scientific achievements as well as new links and chains derived from existing industries that can adapt to diverse business needs such as internet enabled business services as well as business operations integration.
The added value of the “three new” economies in 2020 increased by 4 to 5% compared to the previous year.
Credit for the growing innovation-driven technology can be attributed to the country’s powerful logistics network system. The prevalence of the well-developed internet network across the country, as well as the increase in cashless mobile payments, have also been responsible for the rapid recovery of the country’s economy. Tian Yun, the former vice president of the Beijing Economic Operations Association, said that the internet has brought many benefits to the developing new technology driven by innovation.
About the Chinese innovation situation
Speaking of progress, one fact that cannot be ignored is the growth of this economy during the pandemic. When the Coronavirus started to spread around the world, the savings were in the fall. Many countries, including India, have suffered extensive destruction as a result of the pandemic. Lockdowns prevailed in all countries, hampering all economic activities, but China was still able to further develop the new economy.
China, alongside the fight against the virus, has had to deal with complicated international consequences but has still been very successful. The growing added value of the three new economies is not the dividend of new behavior created by the global COVID-19 virus. In addition, it indicates the effective government planning.
The plans for the country’s vision of technology-driven growth have been successful and bearing fruit. It was discussed in the 13th Five-Year Plan and lays the groundwork for the economy to emerge quickly from the effects of COVID-19. While other countries are still struggling to maintain a stable economy, China is becoming unstoppable with its growth.
Digitization is the future. Every country is making sincere efforts to turn its economy into a digital economy. The benefits are huge and every country is doing their best in this race. However, China, with the right policies and planning, has been very successful in developing a technology-based economy.
As we all know, in economics, technology is known as the main engine of economic growth of countries, regions and cities. How? ‘Or’ What? Technological progress leads to more efficient production of better and faster goods and services, which is the main factor determining the prosperity of the economy.
However, developing a technology-based economy is not as easy as it sounds. The mechanisms by which the technological economy develops are very complex. Further study of their development may lead to the revision of previously adopted policies or, in some cases, may force a country to adopt new policies. The concept of the required technology itself can be very confusing.
On the positive side, the development of an economy based on technological innovation offers many employment opportunities, thereby reducing unemployment levels. It offers better jobs, a healthy working environment, increases the level of education and therefore develops the economy.
The recent growth of the new innovation-based economy has created a huge demand for new contracts between countries, education departments and research and development departments. It should be borne in mind that the main elements for the development of a technology-based economy are appropriate knowledge in the form of theories, a better policy framework, scientific advances and well-developed protocols. Before making a policy, every risk associated with it must be studied in order to develop the economy, which China has done very effectively. Without proper knowledge and planning, this would only have resulted in failure of the economy.
With China pushing domestic innovation, the ratio of the “three new” economies to GDP is expected to increase by 20% by the end of the 14th Five-Year Plan which will end in 2025. The ratio is expected to increase by 20%. here a high ratio and should therefore exceed one third of GDP by 2035.
The country is expected to achieve a number of long-term goals leading to the qualitative transformation of the economy towards a fully digital economy by 2050, in the middle of the century. India, which is also progressing to become a digital economy, will surely benefit if it studies China’s performance and learns from its mistakes.
Edited by Aishwarya Ingle