With China’s economic growth having moderated to a “new normal” pace of medium-to-high speed, speeding up the transformation and upgrading of economy and enhancing the competitiveness of the real economy are the primary goals of economic policies. The deviation of transformation and upgrading in practice and policy is mainly related to our misunderstanding of the connotation of this concept category. At present, we should take "improving productivity" as the policy standard and main line to promote the transformation and upgrading. We should not simply increase investment in research and development, promote investment in strategic emerging industries, or adjust industrial structure using methods such as “changing cages for birds”. The form of transformation and upgrading guided by "improving productivity" mainly includes localization upgrading based on the industry, stock adjustment upgrading and technological transformation and upgrading of existing industries, which is embodied in the automatic selection of comparative advantages by enterprises and markets. The effective actions of the government are mainly reflected in whether it can contribute to the "productivity improvement" in the public domain, such as strengthening government investment to make up for infrastructure weaknesses, implementing mixed ownership economic reform with improving productivity as the standard, promoting R&D investment with market-oriented principle, focusing on building public innovation platform, and vigorously developing vocational and technical education.
