Promoting High-Standard Opening Up
I. China’s achievements in opening up in the first decade of the new era that began in 2012
The report to the 20th National Congress of the Communist Party of China (CPC) states that, over the past 10 years, “We have pursued a more proactive strategy of opening up. We have worked to build a globally-oriented network of high-standard free trade areas and accelerated the development of pilot free trade zones and the Hainan Free Trade Port. As a collaborative endeavor, the Belt and Road Initiative has been welcomed by the international community both as a public good and a cooperation platform. China has become a major trading partner for more than 140 countries and regions, it leads the world in total volume of trade in goods, and it is a major destination for global investment and a leading country in outbound investment. Through these efforts, we have advanced a broader agenda of opening up across more areas and in greater depth.”
The more developed, the more open China becomes.
Over the past decade, China’s open economy has racked up several historic achievements. Gross domestic product has risen from 53.9 trillion yuan to 114.9 trillion yuan. China has ranked first in the world in terms of the total volume of trade in goods and services for two years running. China’s share of global foreign direct investment inflows has increased from 8.2% to 11.4%, and China has remained one of the top three outbound investors in the world. From these statistics, it is clear that the more China develops, the more open it becomes, and vice versa. Therefore, our commitment to the fundamental national policy of opening up will never waver.
Pursuing high-standard opening up
Over the past ten years, China has unveiled a raft of new initiatives for opening up. We have initiated a management model for foreign investment based on pre-establishment national treatment and a negative list, which has led to a reduction in the number of related restrictions from 93 to 31. We have enacted the Foreign Investment Law and further improved the legal framework for foreign investment. We have so far established 21 pilot free trade zones, which now account for 17.8% of all imports and exports and 17.9% of foreign investment inflows. Development of the Hainan Free Trade Port has been accelerated, with more than 120 institutional innovation outcomes rolled out to date. The Export Control Law has been promulgated and the Unreliable Entity List System has been put into place. These have helped keep industrial and supply chains secure and provided security guarantees for the expansion of high-standard opening up.
A container terminal at Taicang Port, located in Jiangsu Province, is ablaze with bright lights, November 5, 2022. Between January and October 2022, throughput at the port totaled 6.65 million TEUs, a year-on-year increase of 16.1%. PEOPLE’S DAILY / PHOTO BY YUAN XINYU
Working for an open world economy
Over the past ten years, China has actively participated in global economic governance and firmly upheld the multilateral trading system. It has worked for the entry into force of the WTO’s Trade Facilitation Agreement concluded in 2013, for the expansion of the WTO’s Information Technology Agreement concluded in 2015, and for the delivery of a series of positive outcomes at the 12th WTO Ministerial Conference in 2022. We have also fully implemented a strategy for upgrading free trade zones. The number of free trade agreements concluded by China has increased from 10 to 19, and our free trade partners now account for about 35% of China’s trade, up from 17%. China has signed and implemented the Regional Comprehensive Economic Partnership (RCEP) agreement and is actively working to accede to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA). The China International Import Expo has been held for five years in a row, becoming a showcase for the country’s new development dynamic, a platform for high-standard opening up, and a public good that benefits countries around the world. Through open development, China has provided a steady stream of fresh momentum for global openness and cooperation.
Maintenance personnel from the Grand China Aviation Maintenance Company, a subsidiary of HNA Aviation Technic, work on an overseas aircraft at the Hainan Free Trade Port One-Stop Aircraft Maintenance Industry Base, November 23, 2022. This was the first overseas aircraft to have an engine replaced at the base since it began operations. XINHUA
Advancing the building of a global community of shared future
Over the past ten years, China has made impressive achievements in promoting economic and trade cooperation under the Belt and Road Initiative. From 2013 to 2021, the cumulative volume of trade in goods between China and countries along the Belt and Road reached almost US$11 trillion, and China’s direct investment in these countries came to US$161.3 billion. High-quality development of overseas economic and trade cooperation zones and positive progress on “small and beautiful” overseas projects have helped boost local tax revenues and employment opportunities in host countries and provided support for developing nations in accelerating development, thus creating tangible benefits for local people. China has engaged in all aspects of global cooperation against Covid-19, provided support in the form of vaccines and anti-epidemic materials to other countries, and promoted the building of a global community of health for all. Through concrete actions, China has demonstrated its commitment to continuous opening up. In doing so, it has not only promoted its own development but created benefits for countries around the world.
II. Requirements for high-standard opening up in the current era
Promoting in-depth reform
If we continually improve the scope and standard of opening up and use it to drive reform and development, opening up will be a critical tool for China in securing new development success. Reform and opening up are the twin engines of China’s growth; they form a mutually reinforcing pair, and one does not work without the other. Since the 18th CPC National Congress in 2012, China has demonstrated a firm commitment to comprehensively deepening reform by striving to build new systems for an open economy and removing obstacles and bottlenecks to smooth economic flows. This has greatly advanced the dynamism of economic development. At the same time, however, we should recognize that the primary social challenge in China has changed, and there are many tough issues that require attention in the key areas of reform as well as difficulties that need to be addressed in opening up at the institutional level. High-standard opening up can drive in-depth reform. By leveraging opening up, we can improve the socialist market economy, give full play to the market’s decisive role in resource allocation, ensure the government better fulfills its role, and create a world-class, market-oriented, and law-based business environment in keeping with international standards. Working in line with high-standard international economic and trade rules, we should give fuller rein to the role of free trade zones and the Hainan Free Trade Port as testing grounds for reform and opening up, steadily press ahead with opening up at the institutional level, and promote the formation of new systems for a higher-standard open economy.
Boosting high-quality development
High-quality development is the primary task in building a modern socialist country. Since the 18th CPC National Congress, the Party Central Committee with Xi Jinping at its core has regarded development as the Party’s top priority in governing and rejuvenating China, fully implemented an innovation-driven development strategy, and taken steps to shore up weaknesses, buttress foundations, and play to our strengths. In doing so, it has steered China’s economy onto a path of higher quality, more efficient, fairer, and more sustainable and secure development. Advancing high-standard opening up has helped China to attract more advanced production factors from around the world and better utilize domestic and international markets and resources. It has created additional leeway for improving the quality of development and for adding new growth drivers, enabling us to achieve a high level of self-reliance and strength. High-standard opening up can promote high-quality development. By giving fuller play to the role of opening up, we have made the shift to a new development model, adjusted the economic structure, boosted growth efficiency and effectiveness, and promoted technological innovation and industrial upgrading. China has thus advanced along a path of open innovation, engaged in more extensive international scientific and technological exchanges and cooperation, and molded new drivers and new strengths for promoting high-quality development.
Creating a new development dynamic
The CPC Central Committee took the major decision to create a new development dynamic based on a full assessment of the evolving situation. China’s new development dynamic is not a closed loop, but rather will lead to more open flows between the domestic and international economies. High-standard opening up is integral to creating a new development dynamic, as it will help advance the inherent dynamism and reliability of the domestic economy, improve the quality and level of international economic flows, and amplify interplay between domestic and international markets and resources. High-standard opening up thus serves our efforts to create a new development dynamic. By implementing the strategy of expanding domestic demand and promoting the formation of a strong domestic market, we will have a robust domestic economy to attract global resources and factors. We should make more efforts to build China into a trader of quality, push for greater trade and investment liberalization and facilitation, and promote market connectivity, industry integration, mutually reinforcing innovation, and alignment of rules, all of which will help form virtuous economic flows based on a higher standard of openness.
Satisfying people’s desire for a better life
The fundamental goal of development is to improve people’s wellbeing. Trade in goods and services, imports and exports—all bear closely on the lives of the Chinese people. China imports a large volume of high-quality consumer goods, advanced technological equipment, key components, and energy resources each year. These imports satisfy the need to upgrade not only industry but also consumption. At the same time, however, China currently faces a capacity glut for certain low-end products and an insufficient supply of medium- and high-end products. There are also prominent shortcomings affecting the supply of services. High-standard opening up can help satisfy people’s desire for a better life. By giving more play to the role of foreign trade and investment, we can keep employment and the economy stable and increase imports of high-quality products and services that will meet people’s diverse consumption needs on multiple levels. This will help ensure our people enjoy an increasingly stronger sense of fulfillment and happiness.
Advancing win-win cooperation with the rest of the world
Practice has proven time and again that openness, inclusiveness, and win-win cooperation are the right way forward for humanity. China’s opening up is not a solo act but an invitation to all; it is not about seeking sphere of influence but about supporting the common development of all countries; and it is not designed to build its own backyard but to create a space for all countries to prosper. The new round of technological revolution and industrial transformation is now well under way, and countries are in more frequent contact and more dependent on each other than ever before. By advancing high-standard opening up, China can use its openness to create a more open world. It can work with other countries to make the pie of the global market bigger, strengthen the mechanisms for sharing benefits globally, and explore new modes of international cooperation. High-standard opening up and mutually beneficial international cooperation should be reflected in mindsets and measures aimed at greater openness. China works to promote broader consensus on global openness and cooperation, pursues a vision of global governance featuring shared growth through discussion and collaboration, proactively assumes responsibilities as a major country, and upholds the multilateral trading system. This way, we wish to provide more Chinese insight and greater Chinese strength for building an open world economy and a global community of shared future.
Visitors use VR headsets to “clap hands” in a virtual workspace in the AI zone at the technology equipment exhibition of the Fifth China International Import Expo, November 7, 2022. PHOTO BY XINHUA REPORTER HOU JUN
Ensuring both development and security
Security is a guarantee for development, while development is the goal of security. Coordinating development and security, being mindful of potential dangers, being prepared to deal with worst-case scenarios—these are key principles of national governance for the CPC. China has now entered a period of development in which strategic opportunities, risks, and challenges are concurrent, and uncertainties and unforeseen factors are rising. Various “black swan” and “gray rhino” events may occur at any time. In the era of economic globalization, no country can seal itself off; rather, we must boost international cooperation and strive to ensure individual and collective security as we open the doors wider. In advancing high-standard opening up, we must ensure both development and security. This calls for a greater emphasis on security during the course of opening up. We should continue to pursue a holistic approach to national security, maintain independence while expanding opening up, acquire a full grasp of new problems and challenges that arise in the process of more expansive opening, and properly manage the extent, pace, and intensity of opening up. We should use opening up as a means to build strength, fend off risks, and effectively shield ourselves from harm.
III. Firmly advancing high-standard opening up in the new era
Leveraging the advantages of China’s enormous market to consolidate the foundations of our open economy
Over the coming years, the dominant role of the domestic market in China’s economy will become more noticeable, and the potential for domestic demand to drive economic growth will be steadily unleashed. We will take coordinated steps to develop a strong domestic market and turn China into a trader of quality, and we will promote the coordinated development of domestic and foreign demand, imports and exports, trade in goods and trade in services, trade and two-way investment, and trade and industry. We will boost the dynamism and reliability of the domestic economy and strive to take the strategic initiative through open development. We will continue to pursue the key strategic objective of expanding domestic demand, accelerate the development of a modern network for flows of goods and services, promote consumption, and further integrate domestic and foreign trade. We will accelerate the formation of a strong domestic market, give better play to the fundamental role of consumption in economic development, and do more to satisfy the people’s desire for a better life. We will continue to hold major exhibitions such as the China International Import Expo, China Import and Export Fair (the Canton Fair), China International Fair for Trade in Services, China International Consumer Goods Fair, and China International Fair for Investment and Trade. We will attract resources from around the world with our strong domestic economy and boost the interplay between domestic and international markets and resources.
Promoting stable and high-quality foreign trade and investment to achieve further open development
Foreign trade and investment are important components of China’s open economy. To achieve high-quality development, therefore, the fundamentals of foreign trade and investment must be stable. With regard to foreign trade, we must move faster to build China into a trader of quality. We will upgrade trade in goods, coordinate the development of new formats and models, and import more quality products. We will develop new mechanisms for trade in services, continue to work on a negative list system for managing cross-border trade in services, and build national demonstration zones for innovative development of trade in services. To accelerate the development of digital trade, we will build national bases for digital service exports, create demonstration zones for digital trade, and boost the level of digitization. Regarding foreign investment, we will further shorten the negative list as necessary, put into full effect the new catalog of encouraged industries for foreign investment, and encourage more foreign investment in advanced manufacturing, energy conservation and environmental protection, the digital economy, and research and development. The Foreign Investment Law will be fully enforced to protect the legitimate rights and interests of foreign investors. In terms of platforms for opening up, we will steadily expand opening at the institutional level, implement the strategy to upgrade pilot free trade zones, accelerate the development of Hainan Free Trade Port, carry out stress tests for high-standard opening up, and bring pilot platforms for comprehensive reform and opening up into play.
Deepening foreign economic and trade relations to expand openness and cooperation
By deepening and expanding foreign economic and trade relations and expanding converging interests with various countries, China can create a favorable external environment for development. We will continue to deepen economic and trade cooperation through the Belt and Road Initiative based on the principle of shared growth through discussion and collaboration. To promote infrastructure connectivity, we will support the development of China-Europe freight train services, move forward with construction of the New International Land-Sea Trade Corridor, build high-standard overseas economic and trade cooperation zones, and actively promote a Digital Silk Road. We will expand the globally-oriented network of high-standard free trade zones, ensure high-quality implementation of the RCEP agreement, move forward with joining the CPTPP and the DEPA, and work to conclude more high-standard free trade agreements. To consolidate the foundations of bilateral cooperation, we will promote coordination and sound interaction among major countries, deepen economic and trade relations with neighboring countries, strengthen solidarity and cooperation with other developing countries, and work to create more mutually beneficial outcomes in cooperation.
Actively participating in global economic governance and consolidating global consensus on openness
China will always be an important advocate for global openness and an active contributor to global governance reform. We will pursue true multilateralism, firmly uphold the multilateral trading system, engage fully and deeply in the reform of the World Trade Organization, promote trade and investment liberalization and facilitation, and work to see mechanisms such as the G20 and APEC performing more effectively. China will fully participate in cooperation mechanisms such as BRICS and the Shanghai Cooperation Organization and push for international macroeconomic policy coordination. We will participate in discussions on global issues and rule-making, contribute more Chinese insight and solutions in areas such as trade and investment, the digital economy, and green and low-carbon development, and strive to ensure a diverse and stable international economic landscape and trade relations.
Wang Wentao is Minister and Secretary of the CPC Leadership Group, Ministry of Commerce.
(Originally appeared in Qiushi Journal, Chinese edition, No. 2, 2023)