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MayLooking at the global trend, we are in a period of great historical opportunity, but at the same time also in a period of complex and turbulent adjustment. Internationally, more challenges and risks are ahead as the world economy slows its growth, protectionism, unilateralism and anti-globalization arise, multilateralism and free trade systems are under attack. Domestically, the Chinese economy is shifting from high-speed growth to high-quality development, thus putting forward higher requirements to reform and opening-up. Standing at the crossroads of history, China’s reform and opening-up can only move forward without stopping. Only by further opening our minds, comprehensively deepening reform and opening-up can we create stability in times of uncertainty, gain upper hand in great power competition, solve the problems in development, and finally realize the great rejuvenation of Chinese nation.
A broader reform and opening-up
40 years of reform and opening-up has enabled China to deeply integrate into the world economy, becoming an important part of the global supply chain and engine for global economic growth. China has committed itself to gradually opening wider to the world especially since 2013, making a series of new initiatives and achievements to promote multilevel and all-round opening-up.
First, China has established pilot free trade zones in several cities including Shanghai, Tianjin, Guangdong, where high-standard international trade and investment rules are introduced and adapted. Through these pilot free trade zones, China is exploring new path and model of opening-up, building new platform for international cooperation and development, and hopefully will gain new competitive advantage.
Second, President Xi said at a conference celebrating the 30th anniversary of Hainan's special economic zone that China will establish a new free trade zone and port in Hainan. It is a move fully showing China’s determination and confidence in further opening-up since a free trade port represents the highest level of openness so far in the world.
Third, China has initiated several major strategies to promote regional development and opening-up, including the development of Beijing-Tianjin-Hebei zone, the Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area, Xiong’an New area and Tongzhou new sub-center of Beijing. In this way, eastern China will open wider to world, meanwhile, the Belt and Road will enable the middle and western China to speed up their reform and opening-up.
Fourth, the Belt and Road Initiative will further promote the opening-up as the northern silk road and maritime silk road will on one hand activate the connection between the eastern region and the western part of China, on the other hand externally link China with Central Asia, Middle East, Africa and Europe. Five years of development proves that BRI has significantly improved the level of China’s trade and investment liberalization and injected new momentum into the world economy.
Fifth, President Xi stressed that China will step up efforts to widen opening-up at the opening ceremony of the China International Import Expo by steadily expanding the access to sectors of finance, service industry, agriculture, mining, manufacturing, as well as telecommunication, education, healthcare and culture.
A deeper reform and opening-up
First, China now faces new domestic development demands and fierce international competition, which gives a higher requirement of our reform and opening up. In particular, in the age of globalization 4.0 and the fourth industrial revolution, a deeper reform and opening up will help China to move from high-speed growth to high-quality development, get more involved into global technological innovation and governance, and attract more investment, technology and wisdom.
Second, as the Chinese economy enters the “New Normal” stage, the previous advantages of China in global trade systems such as low-cost laborforce and resources are no longer sustained. With the policy of high level “bring in”, large scale “going out”, China’s twin surpluses in both current and finance accounts is now shifting toward a balance of international payments. All these changes propose new challenges on China’s opening up.
Third, China should shoulder more responsibility in global governance. As a rising economic power in the world, China should play a proper role and make more contribution to the world as a great power should do. In recent years, China actively participated in many multilateral institutions and forums such as G20, APEC, BRICS, SCO, FOCAC, at the same time established AIIB, NDB, Silk Road Fund, and the BRI, providing new wisdom and strategies for better global governance system.
Fourth, for further promotion of opening-up and better foreign investment environment, China has made great efforts to build a sound system of laws and regulations, including newly introduced Foreign Investment Law of the People's Republic of China, abolishing the case by case review and approval approach, exploring a management system of both the pre-entry national treatment and the negative list for foreign investment, the Catalogue for the Guidance of Foreign Investment Industries ("2017 revision") lifted in total about 65% restrictions compared to the 2011 catalogue.
A supporting system for broader and deeper reform and opening-up
A broader and deeper reform and opening up will require a system of supporting measures and mechanism. In the current context, we should drive forward opening up from the following aspects:
First, to create a favorable business environment by continuing to improve basic laws, regulations and related system. Living up to the international top standards, China must create a stable, fair, transparent and predictable business environment in order to realize high-quality development. All enterprises registered in the territory of China shall be treated equally, and the legal rights and interests of foreign enterprises must be safeguarded, especially in terms of IP protection.
Second, to further expand market access for foreign investment. China is taking substantial steps to expand financial opening-up, accelerate the opening-up process of industries including automobile, shipping, and aircraft. In particular, the foreign equity caps are going to be raised in the education and medical service sectors.
Third, to pay equal attention to the policy of “bring in” and “going out”. China should on one hand attract foreign direct investment, increase exports, on the other hand activate the demand for import. Based on our domestic consumption demand, China should actively increase the import of international products and create new growing points of consumption. Meanwhile, the Belt and Road could lead the way of China’s going out strategy, building a platform of international cooperation in principle of extensive consultation, joint contribution and shared benefits.
Finally, to drive forward a fair, open and inclusive global economic governance system. As unilateralism, protectionism and anti-globalization are arising, China should enhance cooperation with other countries in the world to defend multilateralism and free trade. Therefore, China should actively participate into the world institutions such as G20, APEC, SCO, BRICS, and FOCAC and promote WTO reform so as to help build an open world economy bringing benefits to all the countries and people.
Guan Xueling, Executive Dean of Shenzhen Academy of Renmin University of China, Professor at School of Economics, Research Fellow of National Academy of Development and Strategy, RUC
The original article was published at here.
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