Wang Wentao：Fostering a New Development Dynamic Through High-Level Opening Up

The Resolution of the Central Committee of the Communist Party of China on the Major Achievements and Historical Experience of the Party over the Past Century deliberated and adopted at the Sixth Plenary Session of the 19th CPC Central Committee includes the following profound statement: "Opening the door brings progress, while closing it leaves one behind. For China's development to gain the upper hand, seize the initiative, and have a good future, it is essential that we follow the tide of economic globalization, leverage the strengths of China's massive market, and pursue a more proactive opening up strategy." Looking toward the future, China must stand on the right side of history and advance high-level opening up with unwavering resolve in order to provide powerful momentum for fostering a new development dynamic.

I. Advancing high-level opening up is an essential part of fostering a new development dynamic.

The further China progresses in its development, the more open the country will become. China's doors will only open wider. Advancing high-level opening up is absolutely necessary for fostering a new development dynamic, and boasts the following advantages:

First, advancing high-level opening up helps to ensure unimpeded flow in the national economy.

Our new development dynamic puts focus on the flow of the domestic economy, supply-side structural reform, and ensuring smooth links between production, distribution, circulation, and consumption. Advancing high-level opening up will help our in-depth reform and aid economic flow by tying up loose ends, clearing out main channels, and facilitating microcirculation as we promote high-quality economic development.

In terms of production, opening up has helped bring in high-end factors of production and resources that are in short supply, fulfill the needs of domestic production, promote technological advancement, and raise total factor productivity. In 2020, China had approximately 220 billion yuan in technology import contracts, and imported approximately 4.7 trillion yuan worth of high-tech products, 2.4 trillion yuan worth of integrated circuits, 1.5 trillion yuan worth of crude oil and natural gas, and 1.2 trillion yuan worth of agricultural products.

In terms of distribution, opening up has accelerated China's pursuit of new models of industrialization and urbanization, created jobs, and increased incomes. It has helped us not only to make the pie larger, but also to divide it up better. In the more than four decades since the launch of reform and opening up, enterprises engaged in foreign trade or with foreign funding have directly or indirectly driven employment for more than 200 million people, including 80 million rural migrant workers.

In terms of circulation, opening up has proved capable of spurring increases in efficiency and addressing problems such as obstacles to internal flows. Compared with international standards, China's circulation sector still falls short due to high costs, low efficiency, and inconsistent standards. In 2020, logistics costs accounted for 14.7% of GDP, which was 5-7 percentage points higher than developed countries like the US and Japan. Through high-level opening up, we can draw upon advanced experience from abroad and enable domestic circulation enterprises to grow and raise efficiency on a constant basis amid international competition.

The south square of the National Exhibition and Convention Center (Shanghai), venue for the China International Import Expo, evening of November 2, 2021. Openness is the calling card of contemporary China. PHOTO BY CNS REPORTER YIN LIQIN

In terms of consumption, opening up can provide high-quality supply to better meet the people's needs for a better life. For example, products brought in through the China International Import Expo (CIIE) such as the smallest pacemaker, the most agile surgery robot, smart cleaning robots, and voice-controled smart cookware as well as premium agricultural products and consumer goods have provided a boost to the upgrading of domestic consumption.

The fact is that without the push provided by opening up, domestic economic flow would be seriously hobbled. By advancing high-level opening up and using international economic flow to raise the level and efficiency of domestic flow, we can achieve a better dynamic balance in China's economy.

Second, advancing high-level opening up promotes mutually reinforcing domestic and international economic flows. 

While making domestic economic flow the mainstay, fostering a new development dynamic also requires that we better leverage the effects of opening up, and develop new strengths in international cooperation and competition. We must not only ensure unimpeded domestic flow, but also enhance international flow, using the former to steer the latter, and the latter to spur the former. In this way, we can bring about positive circulation through high-level opening up. 

We must promote positive circulation by connecting markets. On the one hand, we must constantly expand exports, optimize the layout in the international market, and push forward innovative development in trade. On the other hand, we must actively expand imports, unleashing domestic demand potential and using our formidable domestic market to create a main engine for our own development and an accelerator for shared development. The fourth CIIE exemplified these efforts. The event was unprecedented in scale, with participants from 127 countries and regions and more than 2,900 companies. The expo has already become a shining example of our push to foster a new development dynamic.

We must promote positive circulation by integrating industries. On the one hand, we must engage in "bringing in" according to high standards of quality, ensuring that foreign investors feel confident and at ease about doing business in China by constantly expanding market access and creating a good business environment. On the other hand, we must promote "going out" at a high level, pushing Chinese enterprises to play an in-depth role in the international division of labor, enhancing their capacity for global distribution of resources, and boosting their climb to the high end of the value chain. This will help create more open, more resilient, and more vital industrial and supply chains. The first three import expos alone facilitated 622 foreign investment projects worth approximately US$30.5 billion.

We must promote positive circulation through mutually reinforcing innovation. We have seen much success in using opening up to spur reform, development, and innovation. For example, our advances in areas such as high-speed rail and smartphones have all involved a process of bringing in, digesting, and absorbing knowledge before innovating. Although China's progress in scientific and technological innovation has been rapid, there are still many fields in which we do not match up to advanced international levels. We must therefore continue to draw upon international experience, and raise our capacity for independence and self-reliance in science and technology through openness and cooperation.

We must promote positive circulation by bringing rules into alignment. We should promote effective alignment of domestic and international rules, and pay attention to bringing about a shift from openness in terms of free-flowing goods and factors to openness on the institutional level, including rules, regulations, management, and standards. We must take effective steps to make China's opening up to the outside world more systematic, holistic, and coordinated.

Third, advancing high-level opening up is conducive to an open world economy.

Our efforts to foster a new development dynamic and advance high-level opening up will create space for China's development in the international arena, and also add new momentum for driving recovery and growth of the global economy. 

Open cooperation is the key for promoting Covid-19 prevention and control and post-pandemic economic recovery. The Covid-19 pandemic has had a serious impact on the global economy. China has taken the lead in bringing the epidemic under control, and was the only one of the world's major economies to achieve growth in 2020. Our country has not only contributed to global economic growth, but also promoted global cooperation against Covid-19. Since the beginning of the pandemic, China has provided approximately 370 billion masks, more than 4 billion protective suits, more than 8 billion testing kits, and more than 2 billion vaccine doses to the international community. At present, recovery of the global economy is still faced with significant instability and uncertainty, and therefore it is even more important for all countries to expand open cooperation and push each other forward in development.

Open cooperation is the only way to fuel progress in global economic development. Economic globalization, openness, and connectivity are unstoppable and irreversible historical trends. Those who seek to put up barriers and engage in decoupling are going against the laws of economics and the rules of the market. By advancing high-level opening up, China will bring the dividends of openness to the world. We will not only allow other countries to share in the pie of China's formidable domestic market, but also use our openness to promote the openness of the world. This will expand the pie of the international market, increase opportunities for shared development, and propel the development of an open world economy and a global development community.

II. China has multiple advantages in advancing high-level opening up.

To foster a new development dynamic and implement high-quality opening up demands a robust system of domestic economic flow as well as solid fundamentals. Through its development since the founding of the PRC and especially since the launch of reform and opening up, China has accumulated firm material foundations, with the economy demonstrating increasing resilience and more obvious overall strengths. These strengths include the following:

A huge market

Markets are the scarcest of all resources in the world today. With a population of more than 1.4 billion, including more than 400 million in the middle-income bracket, China has a tremendous advantage in its domestic market. And speaking realistically, this market is continuing to expand. Even with the impact of the pandemic, total retail sales of consumer goods reached 39.2 trillion yuan in 2020, making China the world's second largest consumer market. Furthermore, thanks to vigorous development in sectors including online education and online medical services, spending on services now makes up a huge proportion of the economy. The CIIE has been hosted successfully for four years running, facilitating deals worth over US$270 billion and providing businesses around the world with opportunities for development. Looking toward the long term, China's market has a huge amount of room to grow, and it is projected that imports of goods over the next decade could surpass US$22 trillion. China's market shows strong growth momentum, while the middle-income group will continue to expand and the consumption structure will keep being upgraded. This will unlock new space for China's economic development, and provide solid foundations for advancing high-level opening up.

Competitive advantages over the entire industrial chain

The security and stability of industrial and supply chains is the foundation for fostering a new development dynamic. Since the launch of reform and opening up, China has actively integrated into global industrial and supply chains. In the process, the advantages of our scale, our complementary structures, and our advanced position in certain sectors have become increasingly apparent, and we have built up a decisive role in global industrial chains. The entire industrial chain has provided powerful supply capacity, with the ability to optimize domestic economic flow and to support and drive international flow. China currently boasts the most complete system of industries in the world, and nothing can supersede the advantages of our integrated industrial chain. To be more specific, our traditional industries including those producing textiles, clothing, shoes, hats, toys, bags, and suitcases possess a global advantage; our mid- to high-end industries including those producing electronics and mechanical equipment are shifting more rapidly from processing and assembly to the manufacturing of components and parts; and our new energy industries including high-speed rail and solar power are leading the world in development, with competitive advantages in technology and pricing that are consistently growing stronger. China's advantages in terms of scale and complementarity can drastically reduce enterprise costs, raise efficiency, and boost competitiveness. In recent years, despite increasing labor costs, China's manufacturing sector has still demonstrated clear advantages when taking elements such as productivity, infrastructure, supply of factors and resources, and overall complementarity into consideration. Our strengths over the entire industrial chain produce a funnel effect that can draw together global factors and resources to create more secure and reliable industrial chains featuring stronger capacity for innovation and higher value-added. This will in turn create a sturdy shield for our efforts to advance high-level opening up.

Scientific and technological innovation potential

The most essential component of our efforts to foster a new development dynamic is achieving a high level of self-reliance, and accelerating scientific and technological innovation is the key in this regard. In recent years, China has made marked progress in areas including key science and technology breakthroughs, reform of the science and technology system, and building the talent pool. This has provided a good foundation for scientific and technological innovation. In terms of talent, approximately 10 million university students graduate every year, and China has more scientists and engineers than any other country in the world. In terms of investment, spending on research and development reached 2.4 trillion yuan in 2020, which is 2.4 times as high as it was in 2012. In terms of technology, new technologies like big data, cloud computing, the Internet of Things, and mobile Internet have the capacity to both magnify China's strengths and provide more room to maneuver. In terms of industries, our emerging industries like artificial intelligence and 5G are competitive with those of developed countries. In terms of markets, China's formidable domestic market has the capacity to rapidly become the proving ground for new technologies. Lastly, in terms of systems, our new system for mobilizing nationwide resources to make breakthroughs on core technologies in key fields and our open competition mechanism for selecting the best candidates to lead key research projects will stimulate new vigor for innovation. China's ranking on the World Intellectual Property Organization's Global Innovation Index rose from 29th in 2015 to 12th in 2021, demonstrating that our edge in scientific and technological innovation is coming together. Since the 18th CPC National Congress in 2012, China has seen rapid development in science and technology, our country's systems for innovation have become more refined, and our capacity for innovation has grown significantly, providing powerful momentum for advancing high-level opening up.

Tourists browse merchandise at a duty-free shop located at Sun Moon Plaza, Haikou, Hainan Province, October 30, 2021. The first China International Consumer Products Expo was held in Hainan in May 2021. PHOTO BY WANG CHENGLONG

The leadership of the CPC

Pressing ahead through hardship over the past 100 years, China has blazed a path of development suited to its national conditions, accumulated experience in development, and put the strengths of its system on display. The strengths of our system come from the leadership of the CPC, which has rallied us together and charted our course. China's success hinges on the Party. The greatest strength of the Chinese socialist system is the leadership of the Party, as this allows us to pool resources behind major undertakings and to plan development through a long-term vision. The strengths of our system come from our people-centered approach and commitment to putting the people first. All of our initiatives are designed and assessed on the basis of a people-centered approach, and this is something that clearly distinguishes the CPC from other political parties. The strengths of our system come from solidarity and concerted effort. In the face of the sudden novel coronavirus epidemic, the CPC Central Committee with Xi Jinping at its core practiced decisive decision-making with the overall national interest in mind, and adopted extraordinary measures to tackle this extraordinary emergency. While remaining committed to putting the health and safety of the people above all else, the central leadership coordinated the epidemic response with economic and social development, and thus China was able to take the lead in economic recovery and stand out among the world's major economies. The Party's firm leadership is our greatest source of confidence, and our ability to pool resources behind major undertakings thanks to the strengths of our system is what gives us our edge. Together, these represent the fundamental guarantee for our efforts to advance high-level opening up.

III. Main measures for fostering a new development dynamic through high-level opening up

In the era of economic globalization, internal and external flows blend together and everyone is interconnected. Moving forward, it is clear that the only way we can adapt to the major trends of the times and gain the initiative in development is by advancing high-level opening up. With this in mind, we must take the following measures:

First, we must promote coordinated development of internal and external demand.

China's market is huge in terms of both size and demand potential. China will take further steps to expand demand and spur consumption, build our formidable domestic market, cultivate cities as centers of international consumption, establish urban commercial centers with daily life necessities available within a 15-minute walking distance, and accelerate the development of the commercial system at the county level. We will build a modern commercial logistics system, and move faster to set up a modern and high-standard logistics network that links together production and sales, urban and rural areas, and domestic and international clients. We will address shortcomings in logistics infrastructure, and develop new forms, models, and settings for doing business in this industry. We will upgrade our cross-border logistics capacity, and promote better connectivity between domestic and foreign markets. In an effort to promote innovative development in foreign trade, we will bolster scientific and technological innovation, institutional innovation, and innovation of trading models and forms. We will also promote coordinated flow of imports and exports, trade in goods and services, trade and bilateral investment, and trade and industries, vigorously develop digital trade and green trade, and refine our system for integrated regulation of domestic and foreign trade. Finally, we will effectively leverage the role of important exhibitions as platforms. We will promote sound and sustained development of the platform economy, and make preparations to ensure that major exhibitions including the CIIE, the China Import and Export Fair, the China International Fair for Trade in Services, and the China International Consumer Products Expo are successful. We will amplify comprehensive effects, increase imports of high-quality products, share the benefits of China's massive market with the world, and work constantly to meet the needs of industrial upgrading and people's desire for a better life.

Second, we must accelerate opening up on the institutional level.

Institutional openness is an important indicator of China's efforts to advance high-level opening up. We must continue to ease market access restrictions, cut back the negative list for foreign investment, refine the management system based on pre-establishment national treatment and a negative list, push forward opening up across the board in the agriculture and manufacturing sectors, and further open up areas of the service sector such as telecommunications and medical care through a well-ordered approach. We will expand the scope in which we encourage foreign investment, raise the quality and level of foreign investment utilization, improve the foreign investment services system, and build a business environment that is based on the market, on law, and on international standards. In an effort to promote high-quality development of pilot free trade zones and free trade ports, we will optimize the layout of pilot free trade zones, leverage their role in testing new approaches, and launch a negative list for cross-border trade in services in pilot free trade zones. We will grant more power to conduct reform, expand pressure tests for opening up, continue to unleash the dividends of reform and opening up, and steadily advance the development of the Hainan Free Trade Port. We will properly balance opening up with security considerations, and promote an environment of fair competition.

Third, we must promote high-quality joint development of the Belt and Road.

In today's world, hegemonic “winner-takes-all" logic is becoming increasingly untenable. More and more issues need to be addressed together by the countries of the world through greater coordination. We must remain committed to the principle of achieving shared growth through consultation and collaboration, uphold green, open, and upright values, deepen pragmatic cooperation in the economic and trade domains, raise the level of openness in trade, boost the quality of investment cooperation, strengthen international cooperation, and effectively convey China's story to the world. We must promote interconnectivity of infrastructure, support the development of China-Europe freight train services, and create new corridors for international trade on land and at sea. We must develop high-standard overseas economic and trade cooperation zones, push forward third-market cooperation, and promote mutually beneficial cooperation. We must deepen vaccine cooperation, push for fair and equitable distribution of vaccines worldwide, ensure that vaccines are accessible and affordable to developing countries, make joint efforts to close the immunization gap, and help build a global immunological barrier.

Yangshan Port near Shanghai bustles with activity, September 11, 2021, with cranes loading and unloading cargo from large container ships anchored on the docks. Ports, barometers for development of the national economy, play a key role in keeping global industrial and supply chains stable. PEOPLE'S DAILY / PHOTO BY JI HAIXIN

Fourth, we must play an active role in global economic governance.

China will actively participate in bilateral, multilateral, and regional economic and trade cooperation, take part in setting international rules to make them more just and equitable, and consistently enrich the practice of multilateralism under new circumstances. We must resolutely uphold the multilateral trading system, actively participate in reform of the World Trade Organization (WTO), push for positive outcomes from the WTO's 12th Ministerial Conference, and ensure that developing countries enjoy the rights and interests and room for development to which they are entitled. In an effort to push international cooperation to new levels, we will actively participate in cooperation through mechanisms including the UN, the WTO, the G20, and APEC, step up consultations on issues including trade and investment, the digital economy, and green, low-carbon policy, and contribute more Chinese wisdom to efforts to uphold free trade and bolster open cooperation. We will take the initiative to match up with the high standards in international economic and trade rules, work quickly to release guidelines on high-quality implementation of the RCEP, take proactive steps to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Digital Economy Partnership Agreement, and accelerate efforts to build a globally-oriented network of high-standard free trade zones. We must develop a new model of international economic and trade relations, promote coordination and cooperation between major countries, deepen economic and trade ties with neighboring countries, bolster unity and cooperation with developing countries, expand mutually beneficial cooperation, and make active efforts to build a favorable external environment.

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

(Originally appeared in Qiushi Journal, Chinese edition, No. 2, 2022)

Source: English Edition of Qiushi Journal.No.1,2022