Progress in material production and path innovation in Chinese modernization

“Modernization” is a historical category that reflects social progress, with material production and material life forming key components of such progress. From this perspective, the material dimension of modernization begins with the development of society's material production and ends with the enrichment of material life. Notably, the development of material production has its inherent laws, which are crucial to determining the success of the Chinese path to modernization.

The improvement of material production efficiency is a crucial prerequisite for any economy's transition to modernization. Chinese modernization adheres to economic development as its central focus, thereby laying the material foundation necessary for modernization. As Deng (1994a) stated, “The tasks of modernization are multifaceted, and all aspects require comprehensive balance – we cannot pursue a single approach. Ultimately, however, economic development must remain the centre. Without this focus on economic development, there is a risk of losing the material foundation.” Within economic development, the material foundation is not a static concept, but a dynamic one linked to material production efficiency – a concept characterized by development and change. From the perspective of modernization, material production efficiency has three defining dimensions. It forms a key aspect of productive forces, determining the direction of modernization in terms of material production. The productive forces system constitutes an organically integrated structure, encompassing the coordinated development of production factors and their capabilities, all bound to the material elements of production. When examined through its three fundamental components, the evolution of productive forces is gauged by heightened labor efficiency, conditioned by the expansion of labor objects in response to social needs and fundamentally grounded in the enhancement and transformation of the means of labor.

Advancing modernization requires recognizing how developing the means of labor enhances material production efficiency. In historical materialism, subjects of labor cannot develop in isolation from the objects of labor – workers’ efficiency largely depends on the means of labor, thereby determining the need for priority growth in the sectors of production means, particularly those producing machinery. Marx (2004a, p. 210) said: “It is not the articles made, but how they are made, and by what instruments, that enables us to distinguish different economic epochs.” Historically, from the Stone Age and Bronze Age to the era of the machine industry, and from the age of steam and electricity to the information and digital ages, improvements in material production efficiency have increasingly depended on the development of labor-saving means. Sectors producing material goods, particularly industrial machinery, power infrastructure and digital technologies, consistently develop at a faster rate. This requirement has further strengthened the role of the science and technology sectors. “Contemporary natural science is applied to production on an unprecedented scale and with unprecedented speed. This has given all fields of material production an entirely new look. In particular, the development of electronic computers, cybernetics and automation technology is rapidly raising the degree of automation in production. With the same manpower and the same number of man-hours, people can turn out scores or hundreds of times more products than before” (Deng, 1994b).

The development of the means of labor is emphasized in Chinese modernization, manifested through accelerated accumulation of industrial capital, prioritizing the development of heavy industry and leveraging science and technology as primary productive forces, which adheres to the general law of prioritizing growth in the means of production.

Modern production signifies substantially higher efficiency in the material utilization of raw materials. In social production, humanity's dependence on nature is determined by the properties of raw materials within the production process. Society's capacity to acquire the means of production exerts a significant influence on production efficiency. Marx (2009a) observed: “The closer we approach our own time in the history of production, the more regularly do we find, especially in the essential lines of industry, the ever-recurring alternation between relative appreciation and the subsequent resulting depreciation of raw materials obtained from organic nature.” The more underdeveloped a production system, the lower its efficiency in utilizing material resources. Conversely, the more modern a production system, the easier it is to utilize the objects of labor and raw materials, and the more thoroughly they are employed in the production process. The commitment to improving material resource utilization efficiency has driven China's rapid market economy development and enabled China to leverage both domestic and international resources fully. Supported by effects such as industrial agglomeration, the capacity for material resource utilization has continuously enhanced throughout Chinese modernization, ensuring product quality improvements whilst reducing costs and expanding industrialization scale. This naturally represents a crucial pathway through which Chinese products have achieved new heights of international market competitiveness and constitutes one of the underlying causes prompting the USA to implement tariff wars.

The material production under Chinese modernization contributes to improving workers' living standards and welfare. Modern production must achieve greater efficiency in social labor. The saving of labor time is the foundation of all forms of saving. As material production becomes more modernized, it liberates individuals from the constraints of subsistence, thereby affording greater leisure and facilitating more comprehensive human development. Marx (2009b) defined it: “By increase in the productiveness of labor, we mean, generally, an alteration in the labor-process, of such a kind as to shorten the socially necessary labor time for the production of a commodity, and to endow a given quantity of labor with the power of producing a greater quantity of use-value.” Saving labor time not only means lower costs but also facilitates the overall development of people. The continuous improvement in China's production efficiency has enabled rapid growth in workers' incomes and a steady increase in material welfare.

The development of material wealth underpins the sharing of material welfare. The scale and trajectory of improvements in material welfare within Chinese society share certain commonalities with Western modernization, specifically, enhancements in living standards and welfare brought about by rapid industrialization. As noted in The Cambridge Economic History of Europe (Habakkuk and Postan, 2002, p. 5), “The distinctive feature of the rise in material welfare that originated in the 18th century and was associated with industrialization, compared to all previous similar phenomena, lies in its irreversible nature from a long-term perspective.”

However, China differs qualitatively from the West in how the fruits of modernization are shared. Chinese modernization aims for the common prosperity of all people. As Xi (2022a) states, “To achieve common prosperity, we must first work together to make the “cake” of social wealth bigger and better, then put in place sound institutional arrangements to properly balance growth and distribution, ensuring the “cake” is divided fairly.” China not only exercises reasonable control over income disparities in the distribution of income but, with the public sector as its economic mainstay, also enables the state – acting on behalf of all people – to hold substantial social material wealth, thereby effectively mitigating wealth inequality. The universal sharing of material welfare in China far surpasses the so-called “trickle-down” effect of Western modernization.

The development of modern industry and the establishment of a complete industrial system are prerequisites for a nation's independence and the foundation for achieving material abundance. Industrial advancement is fundamentally dependent on industrialization, as emphasized in the foundational directive: “Without industrialization, it is impossible to advance production” (Zhou, 1994). From the outset, industrialization has been a key to Chinese modernization.

Though a latecomer to industrialization, China has established self-sufficient and integrated national economic systems through its industrial drive, subsequently building systematic modern industrial sectors on this foundation. This process boasts multiple advantages. First, it ensures the independence and self-reliance of the industrial chain. Within the globalized production system dominated by international monopoly capital, China's systematic development of modern industrial sectors has enabled the country to avoid domination and suppression by other countries while maintaining economic openness. Second, the development of China's modern industrial sectors ensures comprehensive integration across production chains, enabling enterprises to ascend global value chains and facilitating continuous industrial transformation. Third, the systematic development of these sectors has accelerated synergistic industrial agglomeration, which in turn drives rapid scale expansion and enhances cost efficiency. Marx (2004b, pp. 118–119) indicated: “Only large-scale production allows for savings arising from cooperative productive consumption.” China's substantial labor force, shifting to modern industrial sectors, its potential for industrial development and its talent advantages, fostered by the socialist education system, have created favorable conditions for such savings in large-scale production.

The scale advantages China has developed in modern industrial sectors have also fostered competitive edges in the management system. As Piore and Sabel (1989, p. 55) point out, mass production has triumphed not only in the realm of theory but also in that of practice. Practical success has reinforced theoretical victory. Large-scale production methods themselves served as instruments for Western economic modernization to conquer the world, representing the mode of production through which the Western world-dominated global industry. However, China has leveraged this production model to accelerate industrial restructuring and transform management paradigms, turning it into a new platform for advancing industrial concentration and material production innovation in China. According to Pine (2000, p. 24), in the era of mass production, consumers accept standardized products; consumer recognition expands economies of scale, thereby driving market expansion and price reductions, while the price gap between mass-produced and customized products further drives the concentration of demand toward standardized products.

In the most fundamental sense, social needs are one of the crucial drivers behind the development of productive forces and the transformation of the mode of material production. Initially, social needs were often linked to the concentration of production, which invariably allows an economy to integrate more deeply into the world market and gradually gain dominance, thereby expanding demand and driving the development of material productive forces. Marx and Engels noted:

The concentration of trade and manufacture in one country, England, developing irresistibly in the 17th century, gradually created for this country a relative world market, and thus a demand for the manufactured products of this country, which could no longer be met by the industrial productive forces hitherto existing. This demand, outgrowing the productive forces, was the motive power which, by producing big industry – the application of elemental forces to industrial ends, machinery and the most complex division of labor – called into existence the third period of private ownership since the Middle Ages (Marx and Engels, 2003, p. 57).

China's modernization process has followed this law: the concentration of production brought about by industrialization has turned demand that outstrips productive forces into a driver for economic development and continuous industrial upgrading. Against this backdrop, through greater openness, China has rapidly improved production processes. Known as the “world's factory,” it has attained the status of a major manufacturing and innovative nation.

The emergence of new social needs represents both the gradual formation of new sources of wealth and the process of improving living standards. From the perspective of material production laws, people in post-industrial societies are increasingly inclined to “pursue human free development driven by non-economic motives – a pursuit manifested in the creation of new information wealth, the establishment of new standards for production and consumption, new forms of social connection, and new qualities of life” (Inozemtsev, 2004, p. 35). Thanks to these new social needs, the Chinese path to modernization will not be a replica of Western modernization. Information and data have emerged as new factors in social production, while new industries and organizations built on information consumption, the digital economy and artificial intelligence (AI) have become new domains of material production. The interplay between new industrialization and informatization and the mutual reinforcement of agricultural modernization and urbanization, form a parallel development model – a new strength of Chinese modernization – that has elevated China's material production to unprecedented heights.

The achievements of Chinese modernization in material production are built on the foundation of productive forces characterized by socialized collective ownership. The dominant position of the public sector of the economy has established the distinctive advantages of Chinese modernization, while the socialist market economy system has injected new vitality into it.

Grain output and its supply security level are crucial metrics for assessing the development of material production. Grain output in China stood at just over 200 billion jin upon the founding of the People's Republic in 1949 but surpassed 1.4 trillion jin (706.5 million tons) in 2024 (Liu, 2024). This growth has led to a corresponding increase in per capita grain consumption, enabling China to move beyond solving the grain problem to ensuring people's nutritional balance and health.

The modernization of China's agriculture is reflected in the improved stability of agricultural production. Xi (2025a) pointed out, “At no time should the Chinese people's rice bowls be anything but firmly in our own hands, and these bowls should mainly contain Chinese grain.” The primary indicators of food security are basic self-sufficiency in grains and absolute security in staple foods. Based on the collective ownership of rural land, China has adhered to an agriculture-oriented approach, promoting agricultural development through science and technology and supporting it with policies. This has comprehensively strengthened food security and enhanced the capacity to respond to major risks and challenges.

According to the BRIC Agricultural Products Database, China's grain stocks reached 419.0515 million tons in 2023. As evidenced by the self-sufficiency rate of staple grains, China has transitioned into a phase characterized by “adequate supply” (Han et al., 2025). This secures stable grain provision and furnishes a robust material foundation for sustained socio-economic development.

The modernization of material production in China, with agriculture as a key area, has achieved a historic transformation through a breakthrough in rapidly improving agricultural productivity. According to data from the National Bureau of Statistics of China, China's grain sown area reached 1.79 billion mu in 2024, an increase of 0.3%, maintaining growth for five consecutive years (Qiu, 2024).

The improvement in China's agricultural productivity is mainly attributed to the rational organization of agricultural production and the application of science and technology. Rural collective land ownership has enabled the extensive adoption of modern scientific technologies – such as improved seed breeding, scientific fertilization and pest control – rapidly transforming traditional agriculture. Currently, the contribution rate of agricultural scientific and technological progress in China exceeds 63% (Yu, 2025).

China has actively advanced the modernization of agricultural infrastructure, with over 1 billion mu of high-standard farmland built to date. The large-scale promotion of scientific cultivation methods has significantly reduced labor intensity and production costs while markedly improving agricultural production efficiency. The national comprehensive mechanization rate of China in crop ploughing, sowing and harvesting now exceeds 74%, with agricultural machinery holdings exceeding 200 million units. Moreover, high-horsepower machinery, Beidou terminal equipment and agricultural tools adapted to hilly and mountainous areas have been widely used in recent years (Liu, 2025). In addition, supporting infrastructure such as agricultural irrigation systems, transportation systems and agricultural product processing systems has gradually become more systematic, accelerating the development of large-scale and intensive grain production.

Modern industry, particularly manufacturing, is the mainstay and core component of the real economy, occupying a pivotal position in contemporary material production. China's economic rise is tied to the rapid development of its industry. In 1949, China was still purely an agricultural country, with domestic steel output standing at only 158,000 tons – less than 0.22% of US production and less than one-thousandth of global output. The production capacity for other industrial products was extremely low, with sectors such as automotive, electronics and telecommunications remaining entirely underdeveloped in China at the time (Chen and Lin, 2021).

After years of development, China's industrial sectors now cover not only traditional industries but have expanded into major emerging fields, including new energy resources, new materials, advanced transportation and power infrastructure, high-end chemical textiles, heavy machinery, marine and aerospace technology, biotechnology, information technology and AI. China has become the only country with all industrial categories listed in the United Nations Industrial Classification. Its industrial added value grew from 12bn yuan in 1952 to 39.9tn yuan in 2023 (Huang, 2024), with its production scale exceeding the combined total of the next seven countries.

In terms of manufactured goods, data from the National Bureau of Statistics of China shows that by 2010, China ranked first in the world in the output of 220 types of industrial products. Compared with 1979, China's cement output reached 2.21 billion tons in 2018, a 30-fold increase; flat glass output stood at 870 million weight cases, a 37-fold increase. In consumer goods, automobile production rose to 27.82 million units in 2018, a 146-fold increase from 1979; household refrigerators reached 79.93 million units, a 2,664-fold increase; and color TVs hit 188.35 million units, an 18,835-fold increase.

In 2019, China's automobile production and sales reached 25.721 million and 25.769 million units, respectively, ranking first in the world for 11 consecutive years. A large number of home appliances and communication products – including air conditioners, refrigerators, color TVs, washing machines, microcomputers, tablets and smartphones – now lead the world in both output and production capacity. Among these, industrial products such as mobile phones, computers and color TVs account for 70%–90% of the global total output (Cao and Sun, 2020).

Manufacturing is a key sector reflecting industrial production capacity. China's manufacturing output has now reached its highest level in modern history, with manufacturing added value ranking first in the world for 15 consecutive years (Li, 2025). Meanwhile, the quality of Chinese industrial products has improved significantly and the global influence of “Made in China” and Chinese brands has gradually increased. China's rapid industrial development has greatly challenged the Western narrative of industrialization.

Emerging industrial sectors are among the hallmarks of modernization in the field of material production. Their rise is determined by the unique role of scientific and technological innovation in advancing productive forces. Xi (2024) indicated: “The conversion of scientific and technological achievements into practical productive forces manifests in the emergence of new industries and the promotion of in-depth industrial transformation and upgrading.” Currently, new energy vehicles, the photovoltaic industry, high-speed rail and AI large models have become highlights for the Chinese path to modernization on the global stage.

In terms of strategic emerging industries, China has established complete industrial chains in areas such as construction machinery, power generation and transmission equipment, rail transit equipment and tunnel boring machines, with global leadership in industrial scale. Meanwhile, China has addressed weaknesses in the industrial chain by overcoming technical difficulties and bottlenecks in high-performance fibers, aero-engines, integrated circuit equipment, EDA software and integrated circuit manufacturing, thus ensuring the security of industrial and supply chains. In 2023, China produced 430,000 industrial robots, ranking first globally. The shipbuilding industry experienced comprehensive growth in completed deliveries, new orders and order backlogs, accounting for 55.7%, 74.1% and 63.1% of the global market share in 2024, respectively. In 2023, the added value of strategic emerging industries in China accounted for over 13% of GDP, while the next-generation information technology industry reached a scale of 27.5 trillion yuan, with its added value making up 8.4% of GDP (Huang and Sheng, 2024).

The transformation and upgrading of traditional industries are closely linked to the development of emerging industries, leading to significant breakthroughs. China leads the world in both 5G deployment speed and the number of 5G patents. 5G technology has permeated most sectors of China's national economy, with approximately 74 major sectors of the national economy having adopted 5G to enhance productivity. The automotive industry exemplifies this progress. Automobiles are both the fruit of modern industrial development and important consumer goods. Historically, China trailed global leaders in the development of conventional internal combustion engine vehicles. However, through continuous research and technological innovation in frontier areas such as solid-state batteries, ultra-fast charging, wireless charging and autonomous driving, China has significantly boosted the core competitiveness of Chinese new energy vehicles (NEVs), driving the NEV industry into a phase of technology-driven, high-quality development. China has also pioneered new forms of business operation, such as ride-sharing, battery leasing and battery swapping services. Chinese electric vehicles have gained global popularity, and in 2023, China surpassed Japan to become the world's largest automobile exporter, reshaping the global new energy vehicle market landscape.

The digital economy is the most typical representative of emerging industries. In 2024, the added value of China's information transmission, software and information technology services sector grew by 10.9%, while the added value of above-scale manufacturing of computers, communication equipment and other electronic devices increased by 11.8%. China's total data volume and computing power rank second globally (Guo et al., 2025). China's Government Work Report 2025 states that “the added value of core digital economy industries accounts for approximately 10% of GDP.” The rapid rise of the digital economy has become a new driving force for China's path to modernization.

Chinese modernization has significantly improved the material welfare of the Chinese people. According to the data from the United Nations Economic and Social Commission for Asia and the Pacific, China's per capita national income in 1949 was USD 27. Data from the National Bureau of Statistics of China shows that in 1978, the national per capita disposable income was only CNY 171. However, by 2024, this figure had risen to CNY 41,314, approaching the threshold for high-income countries. Alongside the development of material productive forces and rapid income growth, China's residential consumption structure has undergone a fundamental transformation: the Engel coefficients for urban and rural residents dropped from 57.5% to 67.7% in 1978 to 28.8% and 32.3%, respectively (Wu and Cheng, 2025).

In terms of basic living security and consumption capacity, China has made substantial progress in pension security and established a unified national medical insurance system. Both the variety and quantity of daily consumer goods available to residents increased dramatically. Big-ticket consumption items such as automobiles and housing have seen rapid growth: the national per capita housing area now stands at 40 square metres, automobile consumption has become widespread and household appliances, mobile phones and computers have gradually become essential consumer goods. As for public infrastructure, extensive construction of urban and rural facilities, including subways and roads, has significantly improved people's living environment. China has built over 100,000 kilometers of expressways, facilitating population mobility and reducing both the time and cost of long-distance travel.

From a consumption perspective, household energy consumption is a useful indicator for measuring material welfare levels and its growth trend has been particularly notable. In China's household energy consumption, the proportion of coal fell from 26.58% in 2012 to 8.51% in 2022, while the share of electricity rose from 23.69% to 34.17%. Over the same period, the proportions of natural gas and heating in household energy consumption increased to 15.78% and 16.95%, respectively. The structure of household energy consumption has gradually shifted from highly polluting coal to clean energy, with electricity as the main source (Zhuang et al., 2024). This not only reflects significant improvements in welfare related to energy consumption in China but also indicates that China's energy consumption culture is increasingly oriented toward environmental protection and sustainability.

The progress in material production under Chinese modernization has shattered the myth of “Western centrism” and established the global standing of the Chinese modernization model. As Xi (2018a) noted, “The great transformation of contemporary China is not a replica of modernization in other countries.” A comparative analysis of China's development against the historical trajectories of the United Kingdom and the United States offers a more scientific assessment of contemporary China's global position and contributions from the perspective of material production scale and capacity.

During the formative phase of modern societal development, the United Kingdom emerged as the primary initiator of industrial modernization, an ascendancy intrinsically linked to its unparalleled dominance in the scale of material production during the Industrial Revolution. After 1760, the UK's total industrial output gradually rose to account for two-thirds of Europe's total industrial production. By 1830, its share of global manufacturing output had reached 9.5%, climbing further to 19.9% by 1860. The UK became the world's primary supplier of metal products and cotton textiles, with its shipbuilding industry and railway construction also leading the world. In 1860, the UK produced 40%–50% of the world's industrial goods and accounted for 40% of global trade volume, while the pound emerged as the world's reserve currency (Kennedy, 2006, p. 196).

The USA rose to prominence through a similar trajectory, with material production capacity playing a decisive role. From the 1850s onward, as new technologies were continuously introduced, the US share of global manufacturing output increased from 0.8% in 1800 to 2.4% in 1830, and further to 7.2% in 1860, ranking third globally (Ikenberry, 2008, p. 153). Shortly after the end of the Second Anglo-American War, US manufacturing began to develop. Between 1830 and 1860, manufacturing expanded rapidly; by the period of the Civil War and First World War, US manufacturing had spread across the entire continent (Habakkuk and Postan, 2002, p. 656). In 1860, US manufacturing was still largely confined to consumer goods and resource-based industries; however, its comparative advantages in manufacturing had extended to nearly every sector by the end of the Civil War (Habakkuk and Postan, 2002, p. 648). By 1914, the USA had become the world's most industrialized nation from the perspective of total industrial output. In 1913, the UK's industrial productivity was only 78% of that of the USA, while France's and Germany's stood at 48% and 50% respectively. The USA led the world in all traditional industrial sectors, establishing itself as the largest manufacturing hub of that time.

Similarly, the scale and capacity of China's material production define its role and position in today's global economy. In 2024, China's GDP reached CNY 134.9 trillion, with growth rates among the highest of major economies and contributing approximately 30% to global economic growth (State Council of China, 2018). Some Western scholars argue that China's comprehensive national strength has surpassed that of the USA when measured by purchasing power parity. This reality has made China a key driver of economic globalization, as Xi (2017a, p. 301) indicated, “Twenty or even fifteen years ago, the main drivers of economic globalization were the United States and other Western countries; today, China is regarded as the world's strongest advocate for trade liberalization and investment facilitation.”

China's rise to prominence in industrial production capacity has enabled it to leverage both domestic and international resources and activate both markets. Regarding production scale, China's manufacturing value-added reached US$4.65879 trillion in 2023, accounting for 28.8% of the global total. As for trade, WTO data shows that China's exports of manufactured goods reached US$3.10518 trillion in 2023, accounting for nearly 20% of the global total. In 2024, China's goods exports grew by 7.1% and imports by 2.3%, resulting in a trade surplus of 7.0623 trillion yuan (US$992 billion), a new world record. In terms of trade structure, China has moved beyond the trap of relying on low-end product exports: textiles and clothing accounted for 9.6% of its manufactured goods exports in 2023, while mechanical and electrical products made up 58.5% (Li, 2025). In 2023, exports of China's “new three products” – electric vehicles, lithium batteries and photovoltaic products – grew by nearly 30%, exceeding one trillion yuan for the first time (Guo et al., 2025). Beyond production and trade, China's influence has also grown in technology patents related to practical production.

The historic transcendence of Chinese modernization stems from the fundamental difference between its social material production logic and the capital logic underlying capitalist material production. The establishment of the CPC's leadership and China's socialist public ownership system constitutes the foundational prerequisite enabling Chinese modernization to transcend pure capital logic. The public-owned economy has laid a new foundation for the modernization of China's material production, and the leadership of the Communist Party of China has enabled the country to harness capital and achieve a creative transformation of capital logic in economic development.

The material foundation of Chinese modernization is anchored in the socialization of productive labor. This societal material reproduction necessitates not only a technological base as its prerequisite, but more fundamentally, a collectivized mode of organization as its constitutive condition. According to Marx (2009c), in the future society, “the associated producers, rationally regulating their interchange with Nature, bringing it under their common control, instead of being ruled by it as by the blind forces of Nature; and achieving this with the least expenditure of energy and under conditions most favorable to, and worthy of, their human nature.” The implementation of public ownership of the means of production is an inevitable choice for a socialist society.

Chinese modernization is, in essence, socialist modernization. Public capital embodies socialist relations of production and facilitates the organization of new production models. “The revolution that modern socialism strives to achieve is, briefly, the victory of the proletariat over the bourgeoisie and the establishment of a new organization of society by the destruction of all class distinctions”, indicated by Engels (2009). Under the socialist economic system, the collective ownership of the means of production – such as capital and land – by all members of society ensures the concentration of material resources in modern industrial sectors. Public capital has accelerated China's primitive accumulation for industrialization, making it possible to establish a comprehensive national economic system. Its existence has enhanced China's capacity to mobilize social production, and through national education, it has also provided a large pool of high-quality workers for modern industrial sectors.

The formation and accumulation of China's public capital represent a more civilized process than capitalist capital accumulation. In analyzing capitalist primitive accumulation, Marx pointed out:

The accumulation of capital presupposes surplus-value; surplus-value presupposes capitalistic production; capitalistic production presupposes the pre-existence of considerable masses of capital and of labor power in the hands of producers of commodities. The whole movement, therefore, seems to turn in a vicious circle, out of which we can only get by supposing a primitive accumulation (previous accumulation of Adam Smith) preceding capitalistic accumulation; an accumulation not the result of the capitalistic mode of production, but its starting point (Marx, 2004a, p. 820).

However, China's public capital accumulation was achieved through the socialist revolution and implemented under the organization of the socialist state. It avoided the phenomena of religious reformation, theft, deception, violent plunder and legislative coercion that characterized Western capitalism. Unlike the capitalist process, which involved the forced separation of producers from the means of production, China realized the direct integration of workers with the means of production, such as land. This endows China's public capital with inherent attributes and characteristics that promote social production. China's public capital is not only distinct from private capital under capitalism but also fundamentally different from the state capital of Western countries. In developing social productive forces, China has transitioned from a highly centralized public ownership system to an ownership structure with public ownership playing the dominant role and diverse forms of ownership developing together, grounded in objective economic laws. This transformation has not altered China's socialist character but has instead unlocked initiative across all sectors, driving substantial expansion in material production. Within the socialist market economy, the dominant position of public capital is manifested through both the leading role of the state sector and is consolidated by the development and expansion of state-owned enterprises. Under the socialist market economy, the dominant position of public capital is manifested through the leading role of the state-owned economy and consolidated through the development and growth of state-owned enterprises. Xi emphasized that “the dominant position of public ownership must not be shaken, and the leading role of the state-owned economy must not be shaken” (Xi, 2018b) and that “under the leadership of the Communist Party of China and China's socialist system, state-owned enterprises and the state-owned economy must continue to develop and grow – this should be beyond doubt” (Xi, 2025b). In the field of material production, the dominant position of public capital has played a pivotal role in enabling China to maintain the integrity and independence of its industrial system and achieve technological self-reliance and innovation.

The essence of public capital lies in socialist economic relations, which have undergone continuous reform and improvement in practice. State-owned capital largely determines China's national security and its control over the country's economic lifelines. The leading role of state-owned capital facilitates the modernization of material production sectors and helps maintain the security of industrial chains and the stability of supply chains. The existence of state-owned capital promotes the optimization of the economic structure and layout, enhances technological innovation and improves the overall efficiency of material production. Collective capital – characterized by the collective ownership of the means of production within certain social scopes – mobilizes social resources to promote the development of social production and helps workers, especially rural workers, develop production and achieve common prosperity. Whether it is state-owned capital, collective capital or public capital in mixed economies, they all act as dominant forces in resource allocation, innovation promotion and efficiency improvement, playing a leading and guiding role in boosting employment and increasing incomes.

The ownership structure with public ownership as the mainstay is an economic system that adapts to the requirements of a market economy and can significantly boost the development of productive forces. Under the socialist market economy, the symbiotic coexistence and fair competition among various forms of capital constitute a major advantage of Chinese modernization. This manifests primarily in two aspects.

For one thing, public capital is progressing toward modernization while propelling the development of China's material production. Throughout the reform and opening-up period, state-owned capital has gradually concentrated in industries vital to national security and the backbone of the national economy, in sectors providing public services and livelihoods, and in forward-looking strategic emerging industries, thereby driving and promoting a qualitative transformation of China's material production foundation. Structurally, the optimization of state-owned capital structure and the resultant improvement in the efficiency of resource allocation have rendered China's production and reproduction of material goods increasingly rational and sustainable. State-owned capital has achieved substantial improvements in authorized operation, capital injection methods and management systems, with its capacity for value preservation and appreciation in operations continuously enhanced and its total volume continuously expanding. The innovation coordination capacity of state-owned enterprises has also improved, and their experience in the selection, assessment, compensation and management of their managerial personnel has had a positive impact on private capital. In summary, the development and expansion of public capital have propelled the establishment and improvement of the socialist market economy system, driving and promoting the healthy development of the non-public sectors of the economy.

For another, since reform and opening up, particularly following the establishment of the socialist market economy system, China has strengthened and expanded public capital, actively introduced foreign investment and invigorated private capital, thereby leveraging the tremendous role of capital in promoting material wealth growth. However, the rapid accumulation of private capital has also generated a series of developmental challenges that have affected social, cultural, educational and even political spheres. Xi (2022a) noted: “We must correctly understand and grasp the characteristics and behavioral patterns of capital. The socialist market economy represents a great creation, and various forms of capital will inevitably exist within it. We must harness the positive role of capital as a factor of production whilst effectively controlling its negative effects.”

From a historical perspective, the inherent characteristics and behavioral patterns of capital compel enterprises to compete with one another across product varieties, specifications, performance, quality, pricing and production scale while proactively pursuing technological innovation. This drives resource development and utilization alongside technological improvement in material production. Capital constitutes one of the most mobile production factors, and this mobility endows it with rapid, flexible and responsive characteristics in resource allocation, facilitating continuous optimization of productive resource allocation. As a production factor, capital operates underpriced, competitive, risky and incentive mechanisms to mobilize, guide, allocate and organize resources for socialized production, making material production more efficient, economical and aligned with living needs. Capital can also drive the expansion of production, breaking through both geographical and natural boundaries as well as the inherent limitations of production, thereby becoming a weapon through which humanity masters its destiny.

Activating the functions of capital is the foundation for various types of capital, particularly private capital, to play their roles in China's modernization efforts. Since reform and opening-up, China has actively established equal competitive status for all types of market entities, gradually developing a comprehensive set of open, transparent and fair market rules suited to socialist market economy requirements, whilst respecting and protecting the legitimate interests of private enterprises and entrepreneurs. This is a key factor behind the rapid growth of the private sector in China. Over more than forty years of development, China's private economy has evolved from scratch to scale, from small to large, from weak to strong and from domestic to global, experiencing rapid growth and expansion. Currently, private enterprises contribute approximately 60% to China's GDP growth, absorbing over 70% of rural migrant workers whilst providing 80% of urban employment positions, thus functioning as a vital reservoir for absorbing employment. The private economy has not only become the primary business entity in traditional industries but has also emerged as a vital force in new industries and business formats such as AI, Internet of Things and big data. According to statistics, private technology companies account for approximately 50% of China's high-tech enterprises, while around 65% of invention patents, 70% of technological innovations and over 80% of new products originate from private enterprises (Li, 2023), which attests to their tremendous vitality and dynamism.

China's creative transformation of capital logic is manifested in the scientific positioning of supporting and correctly guiding the regulated and healthy development of capital. Steering various forms of capital effectively is based both on conformity with market demands and social development requirements, as well as national policy orientation and adherence to objective economic laws.

The profit-seeking nature of capital must be approached with an objective perspective grounded in historical materialism. Marx (2004b, pp. 927–928) pointed out: “It is one of the civilizing aspects of capital that it enforces this surplus-labor in a manner and under conditions which are more advantageous to the development of the productive forces, social relations and the creation of the elements for a new and higher form than under the preceding forms of slavery, serfdom, etc.” Under socialist conditions, the commodity economy continues to exist, and the category of capital remains significant in material production processes. Xi indicated (2022a): “Developing a socialist market economy represents a great creation of our Party. Since it is a socialist market economy, it will inevitably generate various forms of capital. Although capital in capitalist society and capital in socialist society certainly differ in many respects, all capital pursues profit.”

The essence of capital's profit-seeking initially manifests as capital appreciation – that is, the increase of social surplus labor and consequently social surplus product, which constitutes a necessary condition for social progress and welfare improvement. Chinese modernization must leverage capital's valorization to promote rapid increases in total social product, providing a solid material foundation for common prosperity. In terms of means, the profit-driven nature of capital manifests itself through two pathways: one is value-creation strategies, which encompass technological innovation, quality improvement and market expansion; the other is cost-compression tactics, which involve resource rationalization, intensive production models and strategic price reduction. However, under specific conditions, capital may also pursue profit-seeking by monopolizing markets, suppressing competitors and engaging in unfair competition. These practices must be guarded against and avoided in China's modernization drive.

Since the 18th National Congress of the Communist Party of China, the Central Committee of CPC, with Xi Jinping at its core, has adhered to the “two unswervingly” principle, implementing new arrangements to develop and strengthen public capital while supporting private capital. This has invigorated China's socialist market economy. Correctly understanding and grasping the characteristics and behavioral patterns of capital, the core lies in continuing to uphold and improve the basic socialist economic system and strengthening the scientific regulation of capital to ensure that entities of all types of ownership compete on an equal footing under the law and to further enhance the overall efficiency of the economy through steady and sound development.

Specific measures include: 1) Improve the overall efficiency of capital allocation and support private capital in entering new sectors. 2) Leverage capital's role in organizing and allocating resources, mobilize its energy to promote competition among market entities and stimulate its potential to drive technological innovation. 3) Guide the orderly development of capital: encourage, support and facilitate its entry into strategic industries and livelihood-related sectors; encourage private capital to invest in R&D; and give preferential treatment to innovative enterprises and innovative products in government procurement. This ensures that capital expansion contributes to enhanced national strength and a fundamental improvement in people's living standards. 4) Strengthen the legal framework governing capital markets and refine the capital regulatory system. The socialist market economy is essentially a rule-of-law economy. Effective capital governance requires not only protecting property rights and ensuring equitable treatment but also clarifying operational rules, enhancing supervision and establishing clear prohibitions. Key measures include implementing both negative lists and access lists for capital, alongside capital entry reviews for major national projects and core strategic sectors. As Xi (2022a) emphasized, “The “traffic light” system applies to all vehicles on the road – likewise, all forms of capital must operate within defined boundaries. Unchecked expansion of certain capital must be prevented.” 5. Demarcate public capital and government investment/financing activities by clarifying the boundaries between governmental functions and the conduct of market players. 6) Guide capital into appropriate business domains while strengthening corporate social responsibility commitments. This entails unleashing the potential of private enterprises to pioneer emerging sectors, develop cutting-edge technologies, operate innovative projects and cultivate new business formats.

To regulate capital's behavior, China has strengthened regulation over irrational expansion, monopolistic conduct and excessive risk-taking in capital operations, while enforcing stricter requirements for social responsibility. The regulatory framework encompasses four key dimensions: First, it monitors and restricts capital's operations that overstep boundaries via various platforms. Necessary review mechanisms and corresponding access thresholds have been established for capital entry into sectors such as radio, film and television, healthcare, education and people's livelihood undertakings and set “negative lists” and “prohibition lists” for specific entities. Second, enhance measures to prevent capital from monopolizing big data and various types of information. Third, leverage big data analytics to assess the debt-servicing capacity of borrowing entities, thereby establishing a proactive risk early-warning mechanism. Fourth, guard against the impact of capital-driven culture on socialist culture by implementing the “people-centered” development philosophy to offset the adverse influences of capital culture, thereby ensuring the healthy, orderly and sustainable development of the socialist market economy.

The advancement of Chinese modernization is deeply rooted in the Party's leadership over economic work. As Deng (1993a) pointed out, “Our reform cannot depart from socialism, and it cannot be accomplished without the leadership of the Communist Party. Socialism and the Party's leadership are interrelated.” It is precisely due to the Party's leadership that China has “completed in just a few decades the industrialization process that developed countries have gone through for hundreds of years, creating two miracles of rapid economic development and long-term social stability” (Central Committee of the Communist Party of China, 2021, p. 63). Without the Party's leadership, China's modernization drive would lose its bearings, erode shared purpose and ultimately forfeit momentum. Before the Party-led revolutionary victory, numerous attempts at economic modernization had failed, inflicting suffering on the people. As Mao (1991) poignantly observed, “The poverty and lack of freedom among the Chinese people are on a scale seldom found elsewhere.” Only through the vanguard role of an advanced political party could the people be mobilized to transform these conditions, paving the path to prosperity and emancipation.

Marxist theory recognizes that the superstructure actively shapes the economic base, with outcomes materializing in production practices. Rigby (2012, p. 221) clarifies: “Marx and Engels harbored no disagreement in acknowledging the relative autonomy of politics and ideology vis-à-vis economic determination, nor in recognizing that both played active causal roles in historical transformation.” The modernization of China's material production practices represents the most arduous endeavor among late-developing nations – marked by unparalleled scale, profound complexity and transformative historical impact. As the Central Committee of the Communist Party of China (2021, p. 65) stated, “The fundamental reason why the Chinese people and the Chinese nation have been able to reverse the historical trajectory since modern times and achieve today's great accomplishments lies in the strong leadership of the Communist Party of China.” Only with the Party's leadership has China been able to consolidate and develop its socialist economic system, with public ownership playing the dominant role. This institutional strength has effectively curbed the disorderly and unchecked expansion of capital, ensured balance between aggregate supply and demand in social production and averted the destructive impact of cyclical crises on material productive forces under capitalist conditions. Such is the fundamental reason for China's decades-long trajectory of sustained stability and rapid growth.

Under the Party's leadership, socialist political advantages are translated into economic strengths, providing robust support for modernization. This has been demonstrated through socialist industrialization and the comprehensive acceleration of China's material productivity following reform and opening up. Upholding the Party's leadership enables China to leverage its political-economic institutional advantages, demonstrating the institutional strength of resource concentration for major national initiatives. By channeling resources toward critical domains of material production, China achieves breakthroughs that accelerate economic development. Within the socialist market economy, the Party's leadership enhances state capacity to rectify market failures, optimizes resource allocation and improves both market efficiency and social welfare outcomes. Under conditions of diversified economic entities and competing interest groups, “the state and other public institutions remain the sole entities capable of distributing social products from a people-centered perspective and satisfying human needs that markets fail to address. Thus, politics has been and remains a necessary dimension in the struggle for equitable social development” (Hobsbawm, 2014, p. 381). As the sole organization free from sectoral interests, the Communist Party's leadership in economic policymaking and implementation can better reconcile conflicts among sectors, regions and groups driven by divergent material interests, which reduces internal friction and lowers social transaction costs. Under the Communist Party's guidance, the government's redistribution of national income ensures greater equity, enhances laborers' material welfare and advances common prosperity. Holistically, the Communist Party of China, as the core leadership, guarantees that China's modernization maintains self-reliance, endogenous capacity and strategic autonomy, while preventing global monopoly capital from unreasonable appropriation of resources, market squeezing and exploitation of China.

Meanwhile, the advancement of Chinese modernization provides institutional underpinning and foundational support for upholding the Party's leadership. Currently, China's enhanced economic strength and its people's rapidly growing prosperity, driven by modernization, have not only bolstered domestic confidence in institutions and Chinese development path but also generated extensive global influence. Domestically, these achievements strengthen CPC's leadership, cohesion and appeal, thus enabling its decisions on economic reform to secure maximum societal endorsement at minimum cost. Globally, as Chinese modernization advances, Xi Jinping's Belt and Road Initiative, his vision of building a community with a shared future for mankind, and his advocacy for a fairer global governance system are garnering increasing recognition. Therefore, the socialist Chinese modernization and development model is endowed with universal value in the world, which undeniably bolsters the Party's cause in its comprehensive advancement.

The development path of Chinese modernization is neither rigid nor immutable. It undergoes proactive refinement in response to evolving socioeconomic conditions and shifting national conditions across historical stages. Under the new era paradigm, this path has advanced along new trajectories, demonstrating distinct strengths.

The New Development Philosophy – encompassing innovation, coordination, green development, openness and sharing – embodies China's latest comprehension of the underlying dynamics of modernization, signifying a strategic shift in the trajectory of material production. As Xi (2015) articulated, this philosophy “represents the concentrated expression of China's development thinking, direction, and priorities for the 13th Five-Year Plan period and beyond. It crystallizes the experience of development gained through over 3 decades of reform and opening up, reflecting our Party's deepened understanding of China's development principles.” Functionally, the five concepts for development are distinct yet integrated in their orientations, which are not only grounded in the foundation of contemporary China's material production but constitute a strategic response to new global dynamics and the emergent stage of domestic economic and social development.

1. Innovation-driven growth generates new momentum for China's material production. Following China's entry into a new stage of socioeconomic development, innovation serves as the basis for fulfilling aspirations for better living standards and enhancing productivity and economic efficiency. The crux of innovation-driven growth lies in elevating the contribution of scientific and technological advancements to material production growth. Chinese modernization commenced from a relatively low historical baseline, where an extensive growth model fueled by factor accumulation and low-cost labor held historical justification in its initial phases. However, as China's material production capacity expanded, problems such as a large but not strong economy, excess production capacity in certain sectors, and resource-environmental constraints have emerged. Insufficient momentum in material production has become the primary bottleneck constraining sustainable economic development. As Xi (2014) emphasized: “For China's economic and social development to break through bottleneck constraints and resolve deep-seated contradictions, and for our country to advance to the global forefront, the fundamental solution lies in innovation.”

Innovation-driven growth encompasses three dimensions: First, attain self-sufficiency in pivotal and core technologies across critical fields. Second, foster seamless integration between scientific innovation and socioeconomic development, empowering enterprises as principal actors in technological innovation. Third, leverage the state's institutional strengths in sectors vital to people's livelihoods and national security to propel indigenous innovation. From the perspective of material production, the benchmarks for China's innovation-driven growth include accelerating the deployment of major scientific breakthroughs and disruptive technologies, mastering core technologies essential for emerging industries to enhance industrial autonomy and further enabling Chinese industries to ascend from low-value to mid-high segments of global value chains. In essence, innovation-driven growth signifies a fundamental transformation of material production pathways. It is an imperative response to downward economic pressures and must ultimately establish a modern economic system and a new development paradigm.

1. Coordinated development promotes structural balance in China's material production as a fundamental requirement for material production, with its essence rooted in the law governing the distribution of aggregate social labor. According to Marx, social labor must be proportionally allocated according to societal needs to ensure the normal functioning of social reproduction. “The necessity of distributing social labor in definite proportions cannot possibly be done away with by a particular form of social production but can only change the mode of its appearance” (Marx, 1995, p. 473). Advancing Chinese modernization necessitates coordinating material goods supply with essential needs, balancing economic growth rate and structural optimization and harmonizing production allocation and development levels between urban and rural areas and regions. It also requires synergizing the dominant role of the public sector with the common development of diverse ownership forms. Currently, the key focus of Chinese modernization involves holistically balancing economic development with the safeguarding of people's vital interests, prioritizing issues such as income, employment, education, social security, healthcare and food safety.

Xi (2016) articulated: “Under new circumstances, coordinated development exhibits certain new characteristics. For instance, coordination serves simultaneously as a means of development, a development objective, and a standard and measure for evaluating development.” Examining the objectives, dimensions and approaches of coordinated development, the primary task in advancing the new pathway of Chinese modernization is to resolve structural imbalances, which entails transforming factor input structures and development driving forces, fostering synergistic advancement between industrial upgrading and regional coordination, rebalancing resource utilization and emission profiles and rationalizing product distribution mechanisms. Distinct from innovation, coordination pursues systemic equilibrium – a dynamic balance achieved not through uniformity but by managing disparities within socioeconomic thresholds, integrating resources to forge developmental synergy, thereby creating equitable conditions that serve the people's common interests.

1. Green development enhances the ecological carrying capacity of China's material production. The advancement of social productive forces has augmented humanity's capacity to harness nature, while nature itself increasingly becomes “humanized nature.” Progress in material production cannot be divorced from factors such as population, resources and environment. The metabolic interaction between humanity and nature “constitutes the eternal natural condition of human life, independent of any specific social form – rather, it is common to all such forms” (Marx, 2004a, pp. 208–209). Disregarding natural laws and disrupting ecological balance inevitably provokes nature's relentless retribution.

Green development embodies progress grounded in virtuous economic-ecological cycles and human-natural harmony, reflecting people's aspirations for quality living standards. From the perspective of economic development, material production is subject to inherent bounds, constrained not only by technological capabilities but by ecological carrying thresholds. In modernization, ecology is not an external factor, and natural resources and environmental capacity exhibit supply inelasticity. Chinese modernization must transcend these constraints by mitigating resource-environmental scarcities and overcoming rising resource and pollution control costs.

The green development philosophy advocates sustainable production and consumption modes, replacing growth models fixated solely on quantitative expansion. It accelerates the easing of resources, environmental and ecological constraints while reducing pressures from resource depletion, ecosystem degradation and environmental deterioration. Ultimately, it fosters human–nature symbiosis by integrating ecological considerations into every phase of material production.

1. Open development facilitates domestic-international synergy in material production. The openness of material production exhibits a positive correlation with the advancement of productive forces – greater openness accelerates developmental dynamism. As material production reaches higher stages, demands for resources, market access and international exchanges intensify correspondingly. Nevertheless, enhanced economic openness concurrently amplifies exogenous uncertainties. Historical trajectories demonstrate that economic globalization deepens the international division of labor, leverages comparative advantages across nations and expands markets to foster shared economic progress. This phenomenon epitomizes the fundamental economic law – the necessity for production relations to align with productive forces – operating at the global scale

China, now a preeminent manufacturing, trading and investment power with deeply embedded global production networks, remains subject to this objective law. To construct extensive communities of shared interests and achieve mutual benefit through openness, China must develop a higher-level open economy. This approach establishes the foundation for its participation in global economic governance, access to international public goods and fulfillment of responsibilities toward both domestic welfare and global well-being. Operationally, advancing open development necessitates implementing high-standard bidirectional opening-up; deploying autonomous intellectual property strategies; leading the restructuring of global value chains and elevating the quality of external economic engagement.

1. Shared development ensures universal coverage of material welfare and social equity. As the value proposition of scientific socialism, it represents the inevitable outcome of socialist practice. Friedrich Engels envisioned that future society would “develop production to the scale satisfying all needs … ending the sacrifice of some interests for others' gains” (Engels, 1995). This principle, intrinsic to socialism's essence, arises from socialist production purposes and the necessity for supply-consumption balance.

Deng Xiaoping (1993b) defined socialism's core as “liberating and developing productive forces, eliminating exploitation and polarization, and ultimately achieving common prosperity.” In the domain of socialist material production, the development of productive forces and the sharing of their fruits are inherently unified. Xi indicated that the ultimate measure of reform success lies in whether people share its fruits (Xinhuanet, 2015). Within China's economic structure, the dominance of public ownership ensures distribution according to work, thereby enabling shared development; the collective utilization of material production means permits shared benefits from outputs; and under multi-ownership systems – particularly with the rapid growth of the private sector – national income redistribution bridges disparities, constituting an essential pathway toward shared development.

Shared development safeguards against severe economic fluctuations and crises while facilitating capital restoration through profit-rate recovery. Within material production, universal access to means of production, technology and information unleashes innovation-driven growth dividends, thereby laying material foundations for common prosperity. Promoting shared development enhances distributional equity, rationalizes production proportionality and generates greater effective demand for material goods – while also improving capital and labor repair mechanisms. This approach significantly reduces transaction costs, optimizes the consumption structure and eliminates workers' vulnerabilities through robust social security systems and livelihood infrastructure. Furthermore, it accelerates the rechanneling of social resources and economic surplus into public goods – spanning science and technology, education, healthcare and eco-environmental protection – consolidating the bedrock for innovative talent cultivation and fostering comprehensive human development.

In summary, the New Development Philosophy – emerging from China's substantial material foundation and its entry into an economic new normal – represents a paradigm shift addressing modernization's core challenges: transforming growth drivers, optimizing structures, improving environmental quality, advancing equity, eliminating absolute poverty and resolving the development imbalances. It institutionalizes three fundamental boundaries for modernization: the production imperative as the guiding thrust, ecological preservation as the non-negotiable baseline and sustainable development as the inviolable boundary.

High-quality development constitutes the primary task in building a modern socialist country in all respects. The Third Plenary Session of the 20th CPC Central Committee established institutional mechanisms for advancing high-quality economic development, charting new trajectories for modernization. The session underscored: “We must anchor reform in the new development stage, steer it with the new development philosophy, deepen supply-side structural reform, refine incentive-constraint mechanisms for high-quality development, and cultivate new growth drivers and competitive advantages” (Central Committee of the Communist Party of China, 2024).

From a dynamic perspective, persistent challenges in material production – such as economic inefficiency and aggregate supply-demand imbalances – manifest through structural mismatches: excess capacity, ineffective output and low value-added production on the supply side and escalating public demand for diversified, premium and personalized quality of life on the demand side. While superficial analysis may attribute low economic efficiency, inefficient resource allocation, technological backwardness and persistently low-end supply to inadequate innovation incentives, insufficient competition and entrenched interests, the underlying systemic roots stem from structural impediments to economic circulation. “The root cause lies in fundamental structural imbalances within economic operations” (Xi, 2017b). Resolving this requires overhauling the mechanisms of material production through deepened supply-side structural reform. As President Xi (2025c) articulated: “The core of supply-side structural reform is to liberate and develop productive forces. We must advance structural adjustment through institutional reform, reduce ineffective and low value-added supply, expand effective and medium-to-high-end supply, enhance supply structure adaptability to demand shifts, and elevate total factor productivity (TFP).”

High-quality development imposes new imperatives on modernizing China's material production sector. The real economy constitutes the bedrock of economic modernization and the pivotal domain for high-quality development. Pursuing modernization must proceed from the material basis of social wealth. As Marx (2004a, p. 49) established: “Use-values constitute the material substance of wealth, irrespective of its social form.” Use value determines the production orientation of material wealth and governs the realization of final consumption. Simultaneously, material wealth emerges through production, with its use-value evolving alongside people's growing needs for better living standards. Therefore, prioritizing use-value embodies both the fulfilment of socialist production objectives and the inherent logic of advancing material civilization. Xi (2025d) emphasized: “The real economy is indispensable for meeting people's needs in food, clothing, housing, transportation, and daily essentials, as well as for providing material-technological support for socioeconomic development. No country possesses the capacity to furnish these for China.” High-quality economic development must be anchored in the real economy while maintaining coordinated progress with financial development. Modern finance must serve the real economy, while the virtual economy should play a strictly subordinate role within the economic system. Xi (2025d) further underscored: “Regardless of economic advancement stages, the real economy remains the bedrock of China's development and our competitive edge in global economic rivalry. China's economy was built upon the real economy and must continue leveraging it to forge the future.”

High-quality development sets new orientations for China to refine the structure and system of modern material production. Constructing a modern economic system under this paradigm requires prioritizing quality and efficiency as guiding principles for supply-side structural reform, thereby providing solutions to navigate critical transitions in economic development. The modern economic system embodies characteristics aligned with socialism with Chinese characteristics in the new era – specifically, “an industrial system integrating coordinated development of the real economy, technological innovation, modern finance, and human capital” (Xi, 2017c). Building such a system encompasses innovation ecosystems in science and technology, modern educational frameworks adapted to contemporary material production, and high-caliber labor forces equipped with modern competencies and professional expertise. This system fosters complementary coexistence and balanced growth between traditional and modern industries, including the integrated development of agricultural, industrial, production and operational systems, which is the cornerstone of rural revitalization.

The high-quality development orientation of Chinese modernization manifests both in macro-level production practices with their governance systems and in micro-level enterprise production processes. The quality of macroeconomic development is interconnected with, yet fundamentally distinct from, microeconomic quality. At the macro level, development quality encompasses not only resource allocation efficiency but also resource utilization efficiency, resource combination efficiency and output efficiency. More broadly, it embodies economic and ecological benefits. Quality and efficiency serve as vital metrics for gauging a nation's economic strength. The guiding philosophy of Chinese modernization has shifted from “growth-first and speed-centric” to “quality-first and efficiency-prioritized,” with its “absolute principle” shifting from development to high quality, which reflects a fundamental reorientation in China's material production practices. At the micro level, quality and efficiency challenges in enterprises stem primarily from a deficient technological innovation drive, inadequate market competition awareness, underdeveloped innovation incentives and risk management mechanisms. Crucially, lagging supply-side restructuring relative to evolving public expectations for better living standards also constitutes a key contributing factor.

Advancing Chinese modernization and promoting accelerated material production with higher quality requires harnessing the guiding function of new quality productive forces. As Xi Jinping (2024) emphasized: “High-quality development necessitates new theories of productive forces for guidance. New quality productive forces, having emerged in practice, demonstrate potent driving and sustaining power for high-quality development.”

The deepening understanding of productive forces constitutes a pivotal factor in China's modernization achievements. The new wave of technological revolution and industrial transformation – a historic opportunity entrusted by the era – provides unprecedented foundations for Chinese modernization. Under new historical conditions, “new quality productive forces,” as the core concept within contemporary productive force theory, further refines China's grasp of objective laws governing material production development, thereby exerting transformative leadership over material production practices in the new era.

The new quality productive forces have expanded the conceptual scope of production factors, charting new trajectories for China's material production advancement. As fundamentally material forces, productive forces rely on production factors. The emergence of new quality productive forces originates primarily from “the development of productive capacities and their constituent elements” (Marx, 2009d). The digitization of production factors and means of production has transformed production objects and content, catalyzing novel modes of production. As Xi (2022b) asserted: “Data, as a new production factor, exerts profound transformative impacts on traditional production modes.” China's ascendancy in information technology, big data industries and the digital economy signifies its progress in harnessing new production factors. Cloud computing and data processing systems have emerged as new means of labor, fundamentally altering labor's qualitative nature. Data platform enterprises restructure labor processes through chips, coding, algorithms and data flows – reconfiguring the utilization structure and scale of traditional production factors while propelling material production forward.

With the new quality productive forces, the production and utilization methods of existing material elements undergo system-wide restructuring, integrating these elements into productive systems at expanded scales. Novel machinery systems – such as automation and AI – unlock new potential in material production, driving comprehensive efficiency gains across the sector. This transformative force reshapes factor allocation mechanisms and business forms, facilitating market-driven reorganization of labor, technology and resources, which integrate with other elements across production, circulation, distribution and consumption, sparking innovation in the forms of business operation. Deployments of new materials and energy sources accelerate the transformation of traditional industries. Strategic technologies – including digital, genetic, aerospace and maritime systems – propel digital-intelligent-green transitions, significantly extending value and industrial chains in material production. This convergence catalyzes emerging and future industries, propelling Chinese modernization to new heights.

The elevation of material production connotations in Chinese modernization is first manifested in the broadening of agents engaged in material production practices. Many traditional farmers transition into modern sectors, emerging as a new dynamic force in industrial production. Traditional farmers are also transforming – adopting high-standard farmland, improved seeds and other new means of production, as well as agricultural machinery, fertilizers, pesticides and drones as new instruments of labor – thereby broadening the agents of modern material production. In the socialist market economy, state-owned capital, private capital, individual businesses and foreign capital jointly engage in material production, forging new synergistic forces for material production development. As Marx (2009e) indicated, “Natural forces as agents of the labor process can be appropriated only by means of machinery, and only by the owner of machinery.” Innovations in machinery systems within the digital economy are further transitioning the agents of China's material civilization toward a new generation of industrial workers characterized by high skills, innovative capacity and craftsmanship spirit.

Also, the elevation of material production connotations in Chinese modernization is manifested in the expanded scope of production objects and targets. The ecological environment no longer functions merely as an external condition for production but has been transformed into an object and target of material production. Historically, the integration of the ecological environment into material production frameworks emerged only with modern industrialization. Marx (1979) indicated: “Man is directly a natural being. As a natural being and as a living natural being, he is on the one hand endowed with natural powers, vital powers – he is an active natural being. These forces exist in him as tendencies and abilities – as instincts. On the other hand, as a natural, corporeal, sensuous objective being, he is a conditioned and limited creature, like animals and plants.”

Nature constitutes the foundation of wealth creation. Traditional growth models based on backward productive forces inevitably provoke ecological crises, imposing avoidable colossal costs on modernization. In China's new journey toward modernization, productive forces and the ecological environment hold equal strategic status. Xi (2019) asserted: “Protecting the ecological environment means protecting productive forces, and improving it means developing productive forces.” Adhering to the principle of prioritizing conservation and protection and letting nature restore itself, China has established sustainable foundations for future generations, enabling the development of material factors within production and living environments. Within material production sectors, China advances low-carbon, energy-saving and clean production systems, establishes circular economy models and green industrial chains and fosters diligent, frugal, green, low-carbon, civilized and healthy lifestyles and consumption patterns. These practices extend material production to encompass the entire lifecycle from production to daily living. Crucially, China's commitment to transforming “lucid waters and lush mountains into invaluable assets” has catalyzed the rise of ecological agriculture, cultural tourism and health and wellness industries. These emerging sectors – now integral to material production – are accelerating the development and upgrading of China's tertiary industry.

Moreover, the elevation of material production connotations in Chinese modernization is reflected in the diversification of material consumption. The enrichment and refinement of material consumption signify substantial improvements in people's living standards while embodying their aspirations for a better life. Under the new era, the “better living standards” have evolved into a multi-dimensional material life framework, with demands exhibiting comprehensive and multi-tiered advancement – encompassing enhanced education, more stable employment, higher satisfactory income, more reliable social security, superior healthcare services, more comfortable housing and improved ecological environments. From a dialectical perspective, these “enhancements” reflect the epochal imperatives of material production. They simultaneously serve as the ends of material production and the driving forces for its development, jointly defining the core theme of economic development in Chinese modernization.