Economy

China’s Economic Balancing Act: How Beijing Plans to Modernize Industries Without Abandoning the Old

China urges balance: develop tech, transform existing industries, avoid rash changes.

November 7, 2025, 8:55 AM

Tweezers placing a microchip with the Chinese flag onto a blue circuit board.

A processor featuring the Chinese flag is placed on a motherboard, symbolizing China's chip manufacturing. By William Potter / Shutterstock.com.

Executive Summary

The Chinese Communist Party cautions against the wholesale abandonment of traditional industries in its push for “new quality productive forces.”

The “new quality productive forces” strategy requires a dual approach of fostering emerging sectors and transforming existing ones, emphasizing local conditions.

Some regional authorities have been criticized for prematurely investing in nascent technologies or recklessly phasing out established industries, risking economic disruptions.

The Story So Far

The Chinese Communist Party is cautioning against the wholesale abandonment of traditional industries in the nation’s push to develop “new quality productive forces,” a strategic growth model focused on technological innovation and industrial upgrades. This guidance stems from concerns that some regional authorities have been too hasty in phasing out established sectors or indiscriminately investing in nascent technologies, often disregarding local economic realities. Therefore, the party emphasizes a dual approach of fostering emerging sectors while simultaneously transforming existing ones, tailored to specific local conditions, to ensure stable and sustainable economic development.

Why This Matters

The Chinese Communist Party’s directive to balance the development of “new quality productive forces” with the transformation of traditional industries signals a strategic effort to prevent economic instability and resource waste, curbing regional missteps where authorities prematurely abandoned established sectors or indiscriminately invested in nascent technologies, ultimately aiming to ensure more balanced and sustainable economic growth tailored to local conditions.

Who Thinks What?

The Chinese Communist Party, through its theoretical journal Qiushi and statements from President Xi Jinping, advocates for a balanced approach to “new quality productive forces,” stressing the need to transform existing traditional industries while also fostering emerging sectors, all tailored to local conditions, and cautions against prematurely abandoning established industries or indiscriminately investing in new technologies.

Some regional authorities have been criticized for prematurely phasing out traditional “low-end” industries or indiscriminately investing in nascent technologies like artificial intelligence and electric vehicles, often disregarding local economic realities and risking industrial gaps and inefficient resource allocation.

The Chinese Communist Party has cautioned against the wholesale abandonment of traditional industries in the nation’s push to develop “new quality productive forces,” a strategic growth model focused on technological innovation and industrial upgrades. According to an article published Friday in Qiushi, the party’s leading theoretical journal, sustainable economic growth necessitates a dual approach of fostering emerging sectors while simultaneously transforming existing ones, with an emphasis on local conditions. This guidance addresses concerns that some regional authorities have been too hasty in phasing out established industries or indiscriminately investing in nascent technologies.

Clarifying the New Growth Model

The concept of “new quality productive forces,” championed by Beijing, is intended to drive economic advancement through breakthroughs and upgrades. However, Qiushi emphasized that this does not imply discarding traditional industries but rather integrating and transforming them through innovative practices. The journal articulated that the sustained impetus for economic growth stems from both cultivating new industries and modernizing conventional ones.

Addressing Regional Missteps

The article acknowledged that some regions, in their zeal to embrace the new model, have prematurely invested in industries featuring buzzwords like artificial intelligence and electric vehicles, often disregarding local economic realities. Conversely, other areas have been criticized for recklessly phasing out traditional sectors deemed “low-end” or “outdated.” Such actions, the journal warned, risk creating industrial gaps, disruptions, and inefficient resource allocation.

Leadership’s Stance

President Xi Jinping, also the party’s general secretary, reiterated this cautious approach at the fourth plenary session of the party’s Central Committee in Beijing last month. He stressed that developing new quality productive forces requires specific conditions and that practical feasibility must be thoroughly considered. The solution, according to Qiushi, involves regions leveraging their unique strengths and pursuing development paths tailored to their specific circumstances.

Strategic Imperative

The party’s message underscores a strategic imperative for China to balance its pursuit of high-tech industries with the pragmatic transformation of its existing industrial base. This cautious approach aims to prevent resource waste and ensure stable, sustainable economic development across diverse regional economies.