Steering High-Quality Development of Commerce Through Chinese Modernization

I. Chinese modernization: a socialist modernization led by the Communist Party of China

The leadership of the Communist Party of China determines the fundamental nature of Chinese modernization

China’s accomplishments in the sphere of commerce since the first decade of the new era began in 2012 are a compelling testament to the expanding horizons of Chinese modernization under the leadership of the Communist Party of China (CPC). In 2022, the volume of trade in goods rose by 71.5% compared to 2012, totaling about 42 trillion yuan, while the volume of trade in services grew by 96.2% to reach 5.98 trillion yuan. These gains have steadily reinforced China’s position as the largest goods trader and second-largest services trader in the world. Meanwhile, foreign investment inflows rose by 61.2% to reach 1.2 trillion yuan, helping to place China among the world’s top bilateral investors. Total retail sales of consumer goods rose from 20.6 trillion yuan to 44 trillion yuan, making China the second-largest consumer goods market globally. The first half of 2023 saw sustained growth in foreign trade, with a year-on-year increase of 2.1% in imports and exports of goods. Foreign investment has basically remained on a stable footing, with the number of newly-established foreign-invested enterprises posting a year-on-year rise of 35.7%. The same period also saw a comparatively swift recovery in domestic consumption, as evidenced by a year-on-year increase of 8.2% in total retail sales of consumer goods.

CPC leadership has ensured steady progress toward the goals of Chinese modernization

Since its 18th National Congress in 2012, the CPC has chronicled a brand new chapter for Chinese modernization, steadily deepening its understanding of important issues, refining its strategies, and enriching its practices. In the area of commerce, we have worked consistently to ensure the implementation of the CPC Central Committee’s decisions and plans. From enhancing traditional consumption to fostering new consumption forms, we have continued to reinforce consumption’s fundamental role in economic development, facilitating a sustained expansion of the domestic market. From opening up based on flows of goods and production factors to institutional opening up involving rules, regulations, management, and standards, we have worked steadily to improve the new systems for a higher-standard open economy, continually raising China’s level of openness. From accelerating the development of a globally oriented network of high-standard free trade areas to ensuring the entry into force of the Regional Comprehensive Economic Partnership agreement, we have continued to improve China’s ability to participate in global economic governance, steadily deepening economic and trade cooperation.

Tourists explore Youzhou Ancient Town in Youyang Tujia and Miao Autonomous County, Chongqing, May 1, 2023. This year has seen the steady recovery of China’s domestic consumer market, with holiday destinations thriving and the night-time economy providing tourists with entertaining experiences. XINHUA / PHOTO BY CHEN BISHENG

CPC leadership has generated strong momentum for Chinese modernization

Taking just decades to complete the process of industrialization that took Western countries several centuries, China has made great strides in catching up with the times. Reform and opening up has been the crucial move behind this success. In commerce-related work, we have firmly implemented the fundamental policy of opening up and remained committed to harnessing opening up as a means to propel reform, development, and innovation. We have fulfilled our promises to the WTO, reducing the overall tariff level to the present 7.3%—a figure closely aligned with the levels sustained by developed WTO members. We have significantly eased market access and fully instituted a management system for foreign investment based on pre-entry national treatment and a negative list. The number of market access restrictions for foreign investment has been significantly trimmed down, from 190 items on the initial negative list to 31 items on the current nationwide list and just 27 items on the list for pilot free trade zones. We have successively set up 21 pilot free trade zones, replicated and rolled out 302 institutional innovations on a nationwide basis, and established a number of new bases for opening up. As its door to the world opens wider, China has ushered in a broader agenda of opening up across more areas and in greater depth.

A mother and her child select African fruits in the China-Africa Economic and Trade Cooperation Promotion Innovation Demonstration Park (Gaoqiao Grand Market) in Changsha, Hunan Province, July 1, 2023. The third China-Africa Economic and Trade Expo was held in the provincial capital fromJune 29 to July 2, 2023. PHOTO BY XINHUA REPORTER CHEN ZEGUO

CPC leadership has rallied a mighty force for advancing Chinese modernization

The people are the main actors in Chinese modernization. It is imperative that we rely closely on them, respect their creativity, and pool their wisdom and strength to keep this process moving forward. As commerce touches on the lives of hundreds of millions of households, we have focused energy on ensuring and improving the people’s wellbeing, working to resolve the pressing difficulties and problems that concern people most and ensuring that gains in commerce benefit all our people fairly. Foreign trade has come to account for a quarter of all employment nationwide, either directly or indirectly. Our efforts to develop Shanghai, Beijing, Guangzhou, Tianjin, and Chongqing as international consumer centers have delivered encouraging results. In addition, by renovating and upgrading 23 pedestrian shopping streets, we have helped drive the recovery of consumption. Spending on big-ticket items like automobiles has also played a supporting role in expanding consumption. We have effectively enhanced people’s sense of fulfillment and happiness through the establishment of 2,057 15-minute urban living circles where daily essentials and public services are accessible within a 15-minute walk or bike ride. We have steadily enhanced our capacity for monitoring and early warning in the consumer market and ensured a steady and orderly supply of daily necessities.

II. Chinese modernization: a broad avenue leading to the building of a strong country and national rejuvenation

Proactively expanding domestic demand based on China’s vast population

Chinese modernization represents not only the largest but also the most challenging modernization process in history. The total population of all modernized countries stands at approximately one billion people. Should China succeed in achieving modernization in its entirety, the scale would surpass that of all developed nations combined. The magnitude and complexity of this endeavor are unprecedented. As such, unique pathways and distinctive methods of advancement will be required. Experience shows that any path to modernization must be compatible with a country’s specific realities. Based on China’s national conditions, we must give primary consideration to the basic factors of our population. On the one hand, we need to fully leverage the benefits offered by our enormous market. With a middle-income group of over 400 million people, China possesses vast domestic demand potential. Since the start of the year, the domestic consumer market has staged a steady recovery, with final consumer spending contributing 77.2% of economic growth in the first half of the year. Restoring and expanding demand is pivotal to the ongoing recovery and improvement of the economy. We must focus both on present priorities, striving to bolster consumer confidence and to revive market vitality, and on the long run by establishing and improving long-term mechanisms for expanding resident consumption. We must ensure that residents have stable incomes and can afford to spend, are free from financial worry and willing to spend, and are satisfied by a favorable consumer environment and thus eager to spend. This will help drive upgrades to consumption and unleash its full potential. On the other hand, we must also ensure the supply of primary products. China is the world’s largest producer and consumer of food and energy and the largest importer and consumer of strategic mineral resources. We need to fully harness both domestic and international markets and resources, see that the sources of China’s imports are diversified, and ensure the security of food and energy resources as well as key industrial and supply chains.

Ensuring that the gains of commerce development benefit all our people fairly based on the principle of common prosperity for all

Modernization is about more than numbers and statistics; it is ultimately about people’s wellbeing and happiness. Achieving common prosperity has proved a formidable challenge in human development. Despite a continuous rise in total wealth, some Western countries have remained ensnared by enduring wealth disparities and polarization. Remaining committed to putting the people above all else, China has worked hard to maintain and promote social fairness and justice and pursued common prosperity to firmly guard against such polarization. Based on the notion that commerce should be for the people, China has promoted steady growth, ensured stable employment, and thus created benefits for its people. It has strived to narrow disparities between regions, urban and rural areas, and incomes. Such efforts have helped not only make the pie larger but also divide it up better. We have also worked to revitalize rural areas and promote urban-rural integration. In 2022, online retail sales of agricultural products rose to 531.38 billion yuan— a surge powered by the widespread adoption of mobile phones as farming tools, the rise of live-streaming as a new agricultural activity, and the effective utilization of digital technologies as farming resources. We have carried out projects to revitalize rural areas through digital commerce, accelerating the introduction of e-commerce in rural areas, improving commercial systems at the county level, and developing new infrastructure for rural e-commerce. We have also supported the purchase of new energy vehicles in rural areas and worked to serve the rural revitalization strategy. We have encouraged cross-region industrial transfer to promote coordinated regional development. As a result, the processing trade in the central, western, and northeastern regions now accounts for nearly 30% of the national total. We have supported stronger industrial alignment between the central, western, and northeastern regions on the one hand and coastal regions on the other and promoted improvements to the business environment in underdeveloped areas. We have enhanced the openness of border areas and done more to boost local economies and raise local living standards. A host of initiatives have been carried out to translate more outcomes from the China International Import Expo into development gains at the local level, ensuring that more goods are brought from exhibits to market and more merchants are turned into investors. Such efforts have helped local areas achieve a higher standard of open development.

Meeting people’s needs for a better life based on the goal of promoting both material and cultural-ethical advancement

Chinese modernization calls for abundant wealth not only in material terms but also in cultural-ethical terms, along with a firm sense of cultural confidence and self-reliance. Only with progress on both fronts can we ensure the smooth advance of socialism with Chinese characteristics. In commerce-related matters, China has always laid equal emphasis on material and cultural-ethical advancement, pursuing both material enrichment and people’s all-around development. On the one hand, we have laid a robust material foundation for meeting the needs of upgrading consumption and industry. In 2022, China’s imports of consumer goods reached 1.93 trillion yuan, more than double the figure from 2012. At the Third China International Consumer Products Expo earlier this year, participants exhibited over 3,000 premium consumer brands and showcased a multitude of new and high-quality products, contributing to a richer supply of products in the domestic market. China will continue to cut tariffs and government-instituted transaction costs, expand imports of high-quality consumer goods and specialty products to improve the quality of people’s lives, and import a broader range of advanced technology, important equipment, and key components to spur industrial transformation and upgrading. On the other hand, we have also worked to increase cultural-ethical wealth in line with people’s needs. We have supported spending on cultural tourism and health, promoted nationwide consumption trends that embody China’s traditional culture, and encouraged the innovative development of time-honored Chinese brands. We have actively expanded foreign trade in the cultural sphere, advanced pilot projects for the innovative development of trade in services, and developed and upgraded national demonstration zones for trade in services. Moreover, we have also deepened comprehensive trials on opening up the services sector. Thanks to eight years of tireless innovation and experiment, the services sector is now powered by significantly more potent drivers.

Trucks wait to depart for Central Asian countries at the Bakhtu border crossing in Tacheng, Xinjiang Uygur Autonomous Region, February 4, 2023. In recent years, China has continued to cultivate strengths in foreign trade by increasing customs clearance efficiency, steadily optimizing the business environment, and promoting high-quality development of port trade. PHOTO BY XINHUA REPORTER HU HUHU

Promoting sustainable development of commerce based on the principle of harmony between humanity and nature

In the process of modernization, China will face greater constraints in terms of resources and the environment. It is, therefore, vital that we do not try to tread the old path of environmental pollution and resource depletion. In light of this, the CPC Central Committee has pursued economic and social development and environmental protection in tandem. It has integrated green growth into the new development philosophy, designated pollution prevention and control as one of the three tough battles along with forestalling and diffusing major risks and carrying out targeted poverty alleviation, and defined developing a Beautiful China as one of the goals for building a great modern socialist country. These moves have opened broad horizons for the sustainable development of the Chinese nation. In the domain of commerce, China has ensured coordination between economic development and environmental protection by promoting development that is more efficient and sustainable. We have accelerated the green transformation of commerce. In various fields, such as consumer goods distribution, foreign trade and investment, and international cooperation, we have actively cultivated new economies and new forms and models of business. We have facilitated adjustments to the industrial structure and the energy mix, advocated green consumption, and encouraged green and low-carbon modes of production and lifestyles in service of efforts to realize our peak carbon and carbon neutrality goals. At the 133rd Canton Fair, around 500,000 green and low-carbon products were exhibited, providing a boost for the development of international markets for intelligent, green, and low-carbon Chinese products. China has actively participated in cooperation and rulemaking on environmental conservation. Adapting to new trends in green and digital development, we have expanded cooperation in new areas and industries, such as green and low-carbon growth, digital living, and health, and participated in discussions on global issues and rulemaking. As a result, we are contributing greater Chinese insight and input in fields such as the digital economy and green and low-carbon development.

Advancing high-standard opening up based on a path of peaceful development

Chinese modernization does not follow the old path of colonization and plunder, nor does it espouse the mistaken logic that emerging powers will inevitably seek hegemony. Adhering to the principles of independence and self-reliance, China has continued to open wider to the world, fully integrating itself into the global economy. This has enabled it to boost its own development while creating benefits for the rest of the world. By continuing to provide new opportunities to the world through its development, China has embodied the principles of helping oneself by helping others and creating a shared future through concerted efforts. It has worked with the world to share the opportunities its vast market offers. Over the past five years, the China International Import Expo has gone from strength to strength, serving as an important platform for international procurement, investment promotion, cultural exchange, and open cooperation. Indeed, it has become a window for showcasing the creation of China’s new development dynamic, a vehicle for promoting high-standard opening up, and a global public good to be shared by the world. Contributions of Chinese input have also helped advance shared global development. Over the past decade, the Belt and Road Initiative has delivered impressive results and generated an expanding circle of friends. As of the end of 2022, Chinese companies have invested a total of US$57.13 billion in overseas economic and trade cooperation zones in Belt and Road countries, creating 421,000 local jobs. Continuing to regard development as the largest possible common ground, China will strive to create greater space for economic and trade cooperation and steadily build more development belts and roads to happiness for the benefit of people around the world. 

Wang Wentao is Minister and Secretary of the CPC Leadership Group, Ministry of Commerce.

(Originally appeared in Qiushi Journal, Chinese edition, No. 16, 2023)