Tech Policy at the Third Plenum
New Productive Forces, AI Safety, R&D, State vs Private Sector
From July 15 to 18, the Central Committee of the CCP convened for the Third Plenum. Historically, Third Plenums have been used to announce foundational economic reforms. Most notably, the Third Plenum of the 11th Central Committee in 1978 marked the beginning of China’s “Reform and Opening Up” policy.
This Plenum’s main output is the Resolution of the Central Committee of the Communist Party of China on Further Deepening Reform Comprehensively to Advance Chinese Modernization 中共中央关于进一步全面深化改革 推进中国式现代化的决定 (Chinese original; full English translation). The 50-page document boasts 300 reform measures to be achieved by 2029, and is accompanied by a 21-page explanation by Xi Jinping (Chinese original; full English translation).
The Resolution is an abstract document that lays out the Party’s high-level reform priorities, not specific targets or policies. It’s an aspirational document, not a descriptive one.
In this post, Bit Wise curated the Resolution’s top quotes, showcasing what it has to say about science and technology. They cover:
The infamous “new quality productive forces,” and how those will reshape “relations of production,”
The role of both the state and the private market in tech innovation,
Strategies for tech self-reliance and supply chain security,
Reforms of R&D institutions and funding mechanisms to enhance innovation efficiency,
Improved incentives for researchers and private enterprises,
Enhanced integration of finance and technology sectors to support long-term innovation,
AI safety (!),
and more!
The Need for Tech-Policy Reform
The Resolution places tech and geopolitics at the heart of its reform motivations:
Education, science and technology, and talent function as basic and strategic underpinnings for Chinese modernization.
教育、科技、人才是中国式现代化的基础性、战略性支撑。
To deal with complex developments both at home and abroad, adapt to the new round of scientific and technological revolution and industrial transformation, and live up to the new expectations of our people, it is vital that we continue to advance reform.
面对纷繁复杂的国际国内形势，面对新一轮科技革命和产业变革，面对人民群众新期待，必须继续把改革推向前进。
Xi Jinping explains that the current PRC science and innovation ecosystem falls short:
At present, unbalanced and inadequate development remains a pronounced problem in promoting China’s high-quality development. For example, the market system still needs improvement; the market itself is not adequately developed; the relationship between the government and the market needs to be further straightened out; our innovation capacity falls short of the requirements for high-quality development; the industrial system, while large in size and extensive in scope, is not yet strong or sophisticated enough; the over-reliance on key and core technologies controlled by others has not been fundamentally changed.
当前，推动高质量发展面临的突出问题依然是发展不平衡不充分。比如，市场体系仍不健全，市场发育还不充分，政府和市场的关系尚未完全理顺，创新能力不适应高质量发展要求，产业体系整体大而不强、全而不精，关键核心技术受制于人状况没有根本改变…
Theoretical Musings on Tech and Society
“New quality productive forces” 新质生产力 — the hottest policy buzzword in Beijing this year — is featured prominently in the Third Plenum Resolution, claiming an entire section:
We will work to facilitate revolutionary breakthroughs in technology, innovative allocation of production factors, in-depth industrial transformation and upgrading, and the optimal combination of laborers, means of labor, and subjects of labor as well as their renewal and upgrading. All this will give rise to new industries, new business models, and new growth drivers and promote the development of productive forces that are characterized by high technology, high performance, and high quality.
推动技术革命性突破、生产要素创新性配置、产业深度转型升级，推动劳动者、劳动资料、劳动对象优化组合和更新跃升，催生新产业、新模式、新动能，发展以高技术、高效能、高质量为特征的生产力。
“Productive forces” is Marxist lingo for anything we use to produce things: our body, mind, knowledge, materials, technology, or even management systems. “New quality productive forces” are just smart brains, more advanced tech, better materials, etc. — in other words, less reliance on low-educated physical labor and large swaths of natural resources. Hence, “new quality productive forces” will make society more prosperous and green. The ultimate goal is “a significant increase in total factor productivity” 大幅提升全要素生产率.
Productive forces are closely linked to “relations of production” 生产关系, shorthand for the foundational social and economic relationships between people in the economic process, such as employer-employee relationships or ownership.
We will work to better adapt the relations of production to the productive forces, the superstructure to the economic base.
推动生产关系和生产力、上层建筑和经济基础…
Relevant rules and policies will be improved to accelerate the formation of relations of production that are more compatible with new quality productive forces.
健全相关规则和政策，加快形成同新质生产力更相适应的生产关系…
While all this may sound esoteric, the idea is simple: as technology advances, social and economic systems need to evolve accordingly. Such theoretical musings can have a profound impact on downstream policy formulation for key questions like, “Who owns the IP of tech innovations?” or, “Who has to bear risks and reap benefits from tech investments?” Hence, this is where the rubber meets the road: the “new quality productive forces” buzz is more about social questions than about technology itself!
State-Market Relations
One specific question that arises when talking of “relations of production” is the relation between the state and the private economy. One of the guiding principles listed in the Resolution is applying “systems thinking” 系统观念:
We must properly handle the major relationships between the economy and society, between the government and the market, between efficiency and fairness, between vitality and order, and between development and security, thus pursuing reform in a more systematic, holistic, and coordinated manner.
坚持系统观念，处理好经济和社会、政府和市场、效率和公平、活力和秩序、发展和安全等重大关系，增强改革系统性、整体性、协同性。
The Resolution repeats the existing policy mantra of the “Two Unswervinglys” 两个毫不动摇:
“unswervingly consolidating and developing the public sector” 毫不动摇巩固和发展公有制经济;
“unswervingly encouraging, supporting, and guiding the development of the non-public sector” 毫不动摇鼓励、支持、引导非公有制经济发展.
State-owned enterprises are to play an important role in sci-tech innovation:
State capital will be steered toward major industries and key fields that are vital to national security and serve as the lifeblood of the national economy, toward sectors such as public services, emergency response, and public welfare, which concern our country’s prosperity and our people’s wellbeing, and toward forward-looking and strategic emerging industries.
推动国有资本向关系国家安全、国民经济命脉的重要行业和关键领域集中，向关系国计民生的公共服务、应急能力、公益性领域等集中，向前瞻性战略性新兴产业集中。
At the same time, private enterprises should be steered toward working on the tech priorities identified by the state. This aspiration is not new, but how exactly to realize it remains a mystery. The Resolution offers several carrots:
Reinforcing the principal role of enterprises in innovation, we will establish mechanisms for fostering leading high-tech enterprises and strengthen enterprise-led collaboration between industries, universities, and research institutes. We will set up a reserve fund system for corporate R&D and back enterprises that volunteer to lead or participate in major national science and technology programs.
强化企业科技创新主体地位，建立培育壮大科技领军企业机制，加强企业主导的产学研深度融合，建立企业研发准备金制度，支持企业主动牵头或参与国家科技攻关任务。
…
To encourage sci-tech SMEs to boost their R&D spending, we will raise the rate of additional tax deductions for their R&D expenses.
鼓励科技型中小企业加大研发投入，提高研发费用加计扣除比例。
We will encourage and guide higher education institutions and research institutes in authorizing the use of their proprietary scientific and technological advances by micro, small, and medium enterprises on a “use first, pay later” basis.
鼓励和引导高校、科研院所按照先使用后付费方式把科技成果许可给中小微企业使用。
We will support capable private enterprises in leading national initiatives to make breakthroughs in major technologies and provide private enterprises with greater access to major national scientific research infrastructure.
支持有能力的民营企业牵头承担国家重大技术攻关任务，向民营企业进一步开放国家重大科研基础设施。
We will refine financing support policies and systems for private enterprises to resolve the difficulties they face in accessing affordable financing.
完善民营企业融资支持政策制度，破解融资难、融资贵问题。
…
Move faster to set up a system for comprehensively evaluating private enterprises’ credit status and refine the credit enhancement system for small and medium private enterprises.
加快建立民营企业信用状况综合评价体系，健全民营中小企业增信制度。
Individual scientists and engineers are also promised greater autonomy and returns:
Scientists and engineers will have a greater say in the distribution of gains from the transfer of their scientific and technological advances. We will establish a system to place scientific and technological outputs produced on the job under separate management and deepen reforms to grant researchers corresponding rights over these outputs. We will push ahead with the income distribution reform for universities and research institutes. A greater number of eligible SOEs will be permitted to provide diverse medium- and long-term incentives to encourage innovation and creativity among their research personnel.
允许科技人员在科技成果转化收益分配上有更大自主权，建立职务科技成果资产单列管理制度，深化职务科技成果赋权改革。深化高校、科研院所收入分配改革。允许更多符合条件的国有企业以创新创造为导向，在科研人员中开展多种形式中长期激励。
Platform giants will see continuation of “routine” regulation after the crackdown was declared over in 2023:
We will push forward the innovative development of the platform economy while improving the system for its routine regulation.
促进平台经济创新发展，健全平台经济常态化监管制度。
Rallying Behind Top Tech Priorities
Researchers should focus on what actually matters and coordinate with each other:
Targeting the global frontiers of science and technology, the development of the economy, the major needs of the country, and the health and safety of our people, we will refine the mechanisms under which major scientific and technological innovation projects are organized in order to mount a concerted push for breakthroughs in core technologies in key fields. We will see that the development of innovative capabilities, allocation of innovation factors, and ranks of innovators become more systematic, well-organized, and coordinated.
坚持面向世界科技前沿、面向经济主战场、面向国家重大需求、面向人民生命健康，优化重大科技创新组织机制，统筹强化关键核心技术攻关，推动科技创新力量、要素配置、人才队伍体系化、建制化、协同化。
To achieve this, multiple state R&D institutions are in for reform:
We will refine the system of national laboratories and better define the roles and layout of our national research institutions, advanced-level research universities, and leading high-tech enterprises.
完善国家实验室体系，优化国家科研机构、高水平研究型大学、科技领军企业定位和布局…
…
We will encourage and regulate the development of new types of R&D institutions.
鼓励和规范发展新型研发机构…
…
The management system for science- and technology-related social groups will be refined.
健全科技社团管理制度。
We will refine the mechanisms for allocation, management, and utilization of central government research funds and improve the institutions for the implementation of central government-funded science and technology programs and their management by specialized agencies. We will expand application of the contract system for government-funded research projects and grant scientists a greater say in deciding on technology roadmaps, spending funds, and allocating resources. We will establish a mechanism for adopting non-consensus projects based on real-name recommendations by experts.
完善中央财政科技经费分配和管理使用机制，健全中央财政科技计划执行和专业机构管理体制。扩大财政科研项目经费“包干制”范围，赋予科学家更大技术路线决定权、更大经费支配权、更大资源调度权。建立专家实名推荐的非共识项目筛选机制。
Public institutions engaged in scientific research will be allowed to implement a more flexible management system as compared to general public institutions, so that they can explore approaches to instituting corporate management.
允许科研类事业单位实行比一般事业单位更灵活的管理制度，探索实行企业化管理。
[This follows PRC experts like Yuan Yaxiang 袁亚湘, vice chair of the China Association for Science and Technology, complaining earlier this year that the rigid bureaucratic cadre system ties the hands of scientists.]
Researchers should get better incentives to do groundbreaking research, rather than fabricating tons of papers:
We will also support researchers in diversifying their subjects for study and encourage high-risk, high-reward basic research. We will advance reform of the science and technology evaluation system, ensure that ethical standards are adhered to, and rectify academic misconduct.
支持基础研究选题多样化，鼓励开展高风险、高价值基础研究。深化科技评价体系改革，加强科技伦理治理，严肃整治学术不端行为。
Artificial Intelligence
Though not a central focus of the Resolution, AI is mentioned four times.
First, in the section on “new productive forces,” AI is listed as one of the new growth drivers:
We will establish a mechanism for ensuring funding increases for industries of the future, improve the policy and governance systems for promoting the development of strategic industries such as next-generation information technology, artificial intelligence, aviation and aerospace, new energy, new materials, high-end equipment, biomedicine, and quantum technology, and steer emerging industries toward sound and orderly development.
建立未来产业投入增长机制，完善推动新一代信息技术、人工智能、航空航天、新能源、新材料、高端装备、生物医药、量子科技等战略性产业发展政策和治理体系，引导新兴产业健康有序发展。
Generative AI is discussed in the section on cyberspace and public opinion governance:
We will improve the mechanisms for developing and managing generative artificial intelligence.
完善生成式人工智能发展和管理机制。
On international cooperation on AI development:
We will continue to implement the Belt and Road Science, Technology, and Innovation Cooperation Action Plan and redouble efforts to develop multilateral platforms for cooperation in green development, the digital economy, artificial intelligence, energy, taxation, finance, disaster mitigation, and other areas.
继续实施“一带一路”科技创新行动计划，加强绿色发展、数字经济、人工智能、能源、税收、金融、减灾等领域的多边合作平台建设。
And even AI safety concerns found their way into the Resolution:
We will strengthen the cybersecurity system and institute oversight systems to ensure the safety of artificial intelligence.
加强网络安全体制建设，建立人工智能安全监管制度。
[See also Matt Sheehan’s thread, who says that this language is “the clearest indication we’ve seen that concerns about AI safety have reached top CCP leadership, and that they intend to take some action on this.” “Big deal, imho.” Concordia AI has translated an additional explanation of this section.]
As for the data industry, the Resolution reiterates points largely familiar from the 2023 “Digital China” plan:
We will build and put into operation national data infrastructure to promote data sharing. We will work faster to set up a system for data property rights concerning ownership determination, market transaction, proceeds distribution, and interests protection.
建设和运营国家数据基础设施，促进数据共享。加快建立数据产权归属认定、市场交易、权益分配、利益保护制度…
De-Risking With Chinese Characteristics
Unsurprisingly, tech self-reliance and supply chain security are major themes in the Resolution:
We will move faster to build industrial and supply chains that are self-supporting and risk-controllable, improve the institutions and mechanisms for bolstering key industrial chains such as integrated circuits, industrial machine tools, medical equipment, instruments, basic software, industrial software, and advanced materials, and strive to secure more technological breakthroughs that can be applied across entire industrial and supply chains. A mechanism will be put in place to assess and respond to industrial and supply chain risks.
抓紧打造自主可控的产业链供应链，健全强化集成电路、工业母机、医疗装备、仪器仪表、基础软件、工业软件、先进材料等重点产业链发展体制机制，全链条推进技术攻关、成果应用。建立产业链供应链安全风险评估和应对机制。
The same section also has some interesting bits on restructuring supply chains within China. The general idea seems to be that different localities should complement each other, filling each others’ weak points, rather than relentlessly competing with each other on every technology. It will be interesting to watch whether the party can change local officials’ incentive mechanisms to match these goals.
We will develop a regional economic layout and a territorial space system characterized by complementarity between different regions and territorial spaces.
构建优势互补的区域经济布局和国土空间体系。
…
We will improve integrated regional development mechanisms, build new mechanisms for cooperative development across administrative divisions, and deepen industrial collaboration between the eastern, central, and western regions.
完善区域一体化发展机制，构建跨行政区合作发展新机制，深化东中西部产业协作。
We will improve the coordination mechanism for industries to be relocated domestically in a progressive and orderly manner and promote interest sharing between regions of origin and destination. We will develop China’s strategic hinterland and ensure backup plans for key industries.
完善产业在国内梯度有序转移的协作机制，推动转出地和承接地利益共享。建设国家战略腹地和关键产业备份。
Science and technology should support national security, but the document does not offer many details on what should be reformed:
We will create a coordinated and highly effective system for protecting national security and better leverage science and technology to safeguard national security.
构建联动高效的国家安全防护体系，推进国家安全科技赋能。
Mechanisms for countering foreign sanctions, interference, and long-arm jurisdiction will be strengthened.
健全反制裁、反干涉、反“长臂管辖”机制。
Financing Tech
The link between finance and tech runs like a thread throughout the Resolution:
We will develop a financial system for scientific and technological innovation to provide greater support for major national science and technology programs.
构建同科技创新相适应的科技金融体制，加强对国家重大科技任务…
We will refine the role and governance of financial institutions and the incentive and constraint mechanisms for ensuring that they serve the real economy.
完善金融机构定位和治理，健全服务实体经济的激励约束机制。
We will likely see more reforms to government guidance funds and other state-led investment vehicles:
The institutional framework under which SOEs pursue original innovation will be improved, and the reform of state capital investment and operation companies will be continued.
健全国有企业推进原始创新制度安排。深化国有资本投资、运营公司改革。
Establish better operation and oversight mechanisms for major industrial investment funds to ensure that capital is channeled toward our country’s strategic needs.
优化重大产业基金运作和监管机制，确保资金投向符合国家战略要求。
When it comes to tech finance, the Resolution again envisions a symbiotic relation between the state and private economy:
We will refine the institutions and mechanisms that enable government investment to effectively drive nongovernmental investment.
健全政府投资有效带动社会投资体制机制…
The Resolution gives extra spotlight to so-called “patient capital” — investors who are not in for quick money but can support start-ups through long and risky R&D cycles:
We will set up long-term government investment mechanisms to support the development of major projects that are of fundamental and far-reaching importance.
建立政府投资支持基础性、公益性、长远性重大项目建设长效机制…
We will refine policies for supporting the investment of long-term capital in projects at the early stages, in small enterprises, over long time horizons, and in advanced and core technologies. We will improve the mechanisms for spreading the risks associated with the development of major technologies and introduce a policy system for technology insurance. We will facilitate foreign equity investment and venture capital investment in China.
完善长期资本投早、投小、投长期、投硬科技的支持政策。健全重大技术攻关风险分散机制，建立科技保险政策体系。提高外资在华开展股权投资、风险投资便利性。
We will encourage and regulate the development of angel investment, venture capital, and private equity investment, better leverage the role of government investment funds, and work to promote the development of patient capital.
鼓励和规范发展天使投资、风险投资、私募股权投资，更好发挥政府投资基金作用，发展耐心资本。
Talent Development
The Resolution spends quite a lot of space discussing how to educate, attract and retain tech talent.
To improve the mechanisms for nurturing talent here at home, we will work faster to develop national hubs for high-caliber personnel and platforms for attracting and pooling talent.
完善人才自主培养机制，加快建设国家高水平人才高地和吸引集聚人才平台。
We will step up efforts to build a contingent of personnel with expertise of strategic importance, with a focus on cultivating science strategists, top-notch scientists and innovation teams, outstanding engineers, master craftsmen, and highly skilled workers, while also working to improve the performance of all types of talent.
加快建设国家战略人才力量，着力培养造就战略科学家、一流科技领军人才和创新团队，着力培养造就卓越工程师、大国工匠、高技能人才，提高各类人才素质。
Obviously, the researchers should be loyal to the Party. If you were curious about what the model young Chinese person looks like:
We will improve the mechanisms for fostering virtue through education, introduce integrated reforms and new approaches in the political education curriculum at all levels, from elementary school to university, and refine the systems for nurturing capable young people with sound moral grounding, intellectual ability, physical vigor, aesthetic sensibility, and work skills.
完善立德树人机制，推进大中小学思政课一体化改革创新，健全德智体美劳全面培养体系，提升教师教书育人能力…
We may see the PRC restructuring uni curricula to put more focus on national tech priorities:
We will advance reforms of higher education institutions on a categorized basis and develop discipline adjustment mechanisms and talent training models to meet the needs of China’s scientific and technological development and national strategies. This will see us making extraordinary moves to plan for disciplines and majors that are in urgent demand. We will also redouble efforts to develop basic disciplines, emerging disciplines, and interdisciplinary subjects and work harder to cultivate top talent, with a strong emphasis on fostering innovative capacity.
分类推进高校改革，建立科技发展、国家战略需求牵引的学科设置调整机制和人才培养模式，超常布局急需学科专业，加强基础学科、新兴学科、交叉学科建设和拔尖人才培养，着力加强创新能力培养。
Vocational ed is an important part of the mix to support industry:
We will work faster to build a vocational education system that is well-integrated with both general education and industry and improve the mechanisms for student internships and work experience.
加快构建职普融通、产教融合的职业教育体系。完善学生实习实践制度。
Foreigners are welcome:
We will expand international science and technology exchanges and cooperation, encourage the establishment of international science and technology organizations in China, and improve the management mechanisms whereby China’s universities, research institutes, and science and technology-related social groups engage in specialized exchanges and cooperation with their foreign counterparts.
扩大国际科技交流合作，鼓励在华设立国际科技组织，优化高校、科研院所、科技社团对外专业交流合作管理机制。
We will also explore avenues for establishing an immigration system for highly skilled personnel.
探索建立高技术人才移民制度。
We will promote high-standard opening up in the education sector, and encourage first-rate foreign universities of science and engineering to develop partner schools and programs in China.
推进高水平教育开放，鼓励国外高水平理工类大学来华合作办学。
These were just some selected quotes. If you made it all the way here, you should probably just read the whole Resolution!