Editor's Note: The Development Research Center of the State Council, the Ministry of Finance and the World Bank Group recently released a joint report pointing out that China needs to cultivate new drivers of economic growth and strengthen reform to further promote innovation in the economy. 21st Century Business Herald comments:

The report provides a set of systematic policy recommendations for China's transition to high-quality development, most of which have already been deployed by the Chinese government since the 18th National Congress of the Communist Party of China. After analyzing the new opportunities and challenges facing China's development, the report says China needs to eliminate the distortion in the allocation of resources, accelerate the diffusion of advanced technologies and innovations, and promote the invention of new technologies, new products and new crafts.

To be more specific, China should create a level playing field for all investors, strengthen the construction of human capital, more efficiently allocate financial and human resources, promote coordinated regional development and improve its regulation and governance to better handle the relationship between the government and market.

The report says China should reduce its vertical industrial policy targeting specific sectors and companies, and adopt a horizontal industrial policy that is more conducive to improving the business environment and market competition, such as opening more industries to private enterprises and foreign investors to promote competition.

It also proposes China further deepen the reform of State-owned enterprises to ensure that enterprises, whatever their form of ownership, have equal access to factors of production, fair access to market competition and enjoy equal legal protection.

China should therefore improve its innovation system on the basis of fair competition and strengthen its market-oriented innovation policies, to ensure that it does not miss out on any innovation chances in fields beyond the key areas.

With the development and popularization of automation and artificial intelligence, many existing jobs may disappear. Thus, the report says China should be vigilant against technological changes exacerbating inequality and widening the gap between the rich and the poor.