General Secretary Xi Jinping stressed, “To develop new quality productive forces, we must further comprehensively deepen reform to form new relations of production that adapt to them” and “We need to expand higher-standard opening-up to create a favorable international environment for developing new quality productive forces”. Creating “new relations of production” requires optimizing the business environment, which is fundamentally a relation of production. Shanghai has unveiled a version of an action plan for optimizing the business environment for seven consecutive years from version 1.0 to version 7.0 this year. The continuously optimized business environment has made it easier for enterprises to grow and is fostering the emergence of new quality productive forces.

Q1: Since the 18^th National Congress of the Communist Party of China, General Secretary Xi has been attaching great importance to optimizing the business environment and has given a series of important instructions, emphasizing, “Improvement of the business environment is an on-going process, and there is always room for things to become better.” In the Report to the 20^th National Congress of the Communist Party of China, General Secretary Xi further proposed, “We will refine the systems underpinning the market economy, such as those for property rights protection, market access, fair competition, and social credit, in order to improve the business environment.” How can one really comprehend the significance of optimizing the business environment?

Shi Jianxun: The business environment refers to the sum of external environmental conditions for market entities to conduct economic activities. The quality of economic development depends on the business environment. A favorable business environment represents the strong soft power of a country, region and city. According to research by the World Bank, improvement in the business environment can directly boost GDP growth and social investment by 0.3% and 0.36%, respectively. Optimizing the business environment means creating a market-oriented, law-based and international first-class business environment according to international market rules. As we move into a new stage of development, it will become more challenging for investment and preferential policies to fuel economic growth. Instead, the business environment will play a critical role in attracting investment and achieving high-quality economic development in the future. China must make new breakthroughs in optimizing the business environment, stimulate market vitality to a greater extent, bolster the endogenous motivating power of business entities, and further release and develop social productive forces.

Q2: General Secretary Xi stated, “To develop new quality productive forces, we must further comprehensively deepen reform to form new relations of production that adapt to them.” What is the intrinsic connection between building a market-oriented, law-based and international first-class business environment and forming “new relations of production”?

Shi Jianxun: Shanghai’s action plan for optimizing the business environment from version 1.0 to 3.0 referred to the World Bank’s evaluation indicator system, drew on the experience of advanced economies, focused on reducing links, time, documentation, visits and costs for affair handling, and introduced targeted measures. Version 4.0 emphasized the systematic integration of local powers, comprehensively launched the government service brand of “all services handled on one website” and enhanced the management services for the life cycle of enterprises. Versions 5.0 and 6.0 made breakthroughs in key links in key areas, shifted from passive benchmarking to active leading and actively responded to new questions from new arenas, new business forms and new models for the business environment.

Version 7.0 “takes market orientation as the distinctive main line, the rule of law as the fundamental guarantee and internationalization as an important standard,” covers optimization and improvement goals for dimensions including market environment, government services, public services, regulatory law enforcement and legal guarantees and emphasizes “social understanding and enterprise perception”. It focuses on “specific areas and special issues and concretization” and specifically addresses pain points and difficulties directly reflected by enterprises, on the one hand; it ensures policy effects reach all the way to the end of the market system by optimizing the top-level design and removing obstacles in the process, on the other hand. Through the action plan, Shanghai strives to shift from “catching up from behind,” “keeping pace” to “leading” in the international business environment competition.

Q3: New quality productive forces should be developed according to local conditions. What can Shanghai do? How to maximize the growth drivers of new quality productive forces such as digital technology to further optimize and upgrade the business environment?

Shi Jianxun: Firstly, Shanghai should advance its transformation into a hub for sci-tech innovation with high quality. Innovation is at the core of new quality productive forces. Shanghai should ensure the efficient operation of important sci-tech innovation entities in Shanghai, such as national laboratories and bases, increase efforts to attract higher-standard scientific research institutions to settle in Shanghai, and absorb and gather high-quality national key scientific research projects, in order to provide a higher-standard innovation ecosystem for developing new quality productive forces. Secondly, Shanghai should maximize the collaborative innovation of central cities in the integrated development of the Yangtze River Delta, overall advance the building of an international technology innovation center across regions, adjust and optimize the cross-regional layout of major productive forces, coordinate and integrate various industrial cluster projects, and cultivate space carriers for developing new quality productive forces in reliance on the state-level new area, national economic and technological development zones and high-tech development zones. Thirdly, Shanghai should strengthen the layout of frontier fields and future industries, and thoroughly implement the industrial transformation and upgrading plans. Shanghai should accelerate the large-scale application of industrial Internet, accelerate the development of industrial services, promote the transformation and upgrading of shipping trade, build a green and low-carbon supply chain system, and achieve the large-scale and intensive development of industrial parks.

In terms of digital government construction: firstly, Shanghai should continue to enhance the intelligence of “all services handled on one website” and, in reliance on “One Network Administration,” strengthen public data governance; secondly, Shanghai should fully utilize modern information technologies, such as artificial intelligence, to move faster to explore new management paths for super-large cities, enhance research into technologies such as complex problem understanding and AI autonomous learning and, through cross-level and cross-departmental functional collaboration and cross-platform and cross-system functional integration, furnish market entities with integrated, convenient and intelligent government services; thirdly, Shanghai should improve the evaluation system for digital technology services, enhance the ability to predict, identify and respond to market entity demand, raise the level of precise and personalized services and promote auxiliary decision-making capabilities.