LIU Qing: Develop New Quality Productivity in Open Economy Through Construction of Legalized Business Environment

I believe that in the context of our country’s economy being highly integrated into globalization and firmly committed to building a high-level open economy, understanding the formation and development of new quality productivity must also be viewed from the perspective of an open economy. We propose to lead the formation and development of new quality productivity in our open economy through comprehensive rule of law and the construction of a legalized business environment. I will briefly discuss this from four aspects.

First, the strength of high-quality contract enforcement and intellectual property protection is the most important source of comparative advantage in high-tech industries. The more advanced the industry, the more intricate and complex the inter-industry division of labor, the longer the industrial chain, and the more important the knowledge attributes contained in the product. Thus, there is a greater need for enhanced collaboration between domestic and international enterprises. Fair, just, and powerful contract enforcement, along with strong intellectual property protection, is the fundamental guarantee for smooth collaboration between enterprises.

Second, a legalized market system is a prerequisite for achieving innovation through competition. Innovation inherently involves high investment and high risk. In a highly competitive market environment, if intellectual property protection is lacking, companies cannot fully enjoy the potential returns from their innovations, and therefore are less likely to take the risk of innovating. This is particularly noteworthy in the current context of our country’s expansion of imports and openness.

Third, a legalized market system is a prerequisite for promoting innovation through openness. By further expanding openness and lowering tariffs on intermediate and capital goods, on one hand, foreign technology transfer and domestic enterprises' independent innovation can be promoted. However, on the other hand, it may also lead companies to adopt the attitude of mechanically borrowing, relying more on external technological products. When intellectual property protection is insufficient, companies’ innovation returns cannot be guaranteed, and they will be more inclined to mechanically borrowing, substituting imports for independent innovation.

Fourth, the uncertainty of economic policy and business environment is a significant barrier to innovation. Policy uncertainty is a huge impediment to innovation. A sound market system and economic legal system can provide more stable economic expectations for enterprises. Economic policies, however, are often more changeable and unpredictable. To promote innovation, our country needs to govern the economy as much as possible through a sound economic legal system instead of various temporary economic policies.

In conclusion, to develop new quality productivity, I believe that among the many paths, the rule of law is the first. We need to lead the formation and development of new quality productivity in an open economic environment through comprehensive rule of law and the construction of a legalized business environment, creating new reform dividends for our new era.

(Translated by ZHANG Yuqing; Proofread by YANG Fanxin)