Wang Wentao: Improving the Systems and Mechanisms for High-Standard Opening Up

At its third plenary session, the 20th Central Committee of the Communist Party of China (CPC) adopted the Resolution on Further Deepening Reform Comprehensively to Advance Chinese Modernization. In the Resolution, it underscored the need to "pursue high-standard opening up" and set forth a series of arrangements for this purpose. These arrangements constitute a pivotal strategic plan devised by the CPC Central Committee, with Xi Jinping at its core, at a critical stage in our drive to build a great country and move toward national rejuvenation through Chinese modernization, based on both domestic and international imperatives. They will serve as a fundamental guideline and roadmap for pursuing high-standard opening up both now and for the foreseeable future.

I. The significance of improving the systems and mechanisms for high-standard opening up

Since the 18th CPC National Congress in 2012, we have pursued a more proactive strategy of opening up, thereby securing historic achievements and changes in China's opening to the world. Solid strides have been made in building China into a strong trading nation. By 2023, China had maintained its position as the world's largest trader in goods for seven consecutive years and had become a global leader in trade in services. Digital trade has experienced rapid growth, and China's status as a major bilateral investor has been further consolidated. The mix of foreign investment in China has steadily improved, and outbound investment and international cooperation have both shown consistent growth. Bilateral, multilateral, and regional economic and trade cooperation have produced fruitful results.

It has been proven in practice that opening the door leads to progress, while closing it inevitably leaves one behind. Indeed, opening to the outside world has been a critical move in driving the development of our nation. Therefore, as we embark on a new journey, improving the systems and mechanisms for high-standard opening up carries both significant contemporary value and far-reaching historical significance.

Visitors explore the China Pavilion at the Country Exhibition of the Sixth China International Import Expo (CIIE). The expo was held in Shanghai from November 5 to 10, 2023, under the theme "New Era, Shared Future." Covering approximately 367,000 square meters, the expo welcomed the participation of 289 Fortune 500 companies and industry leaders, a record number that highlights the Chinese market's powerful appeal. PEOPLE'S DAILY / PHOTO BY TANG KE

First, it is integral to promoting Chinese modernization

As President Xi Jinping has noted, "Opening up is a defining feature of Chinese modernization." "Only an open China can achieve modernization." To realize the largest and most challenging modernization process in human history, we must leverage the strengths of China's enormous market to attract global resources and production factors and amplify the interplay between domestic and international markets and resources. Improving our systems and mechanisms for high-standard opening up and enhancing the level and quality of trade and investment cooperation will help strengthen the economic foundations for Chinese modernization. It will help foster a more favorable international environment, ensure more robust strategic support, and ultimately open up greater space for the advancement of Chinese modernization.

Second, it will help generate powerful momentum for high-quality development

President Xi has pointed out, "Advancing reform and development through opening up has been a crucial instrument in China's continued development success." Since the launch of reform and opening up in 1978, China has achieved its economic development under conditions of opening up to the outside world. Looking to the future, realizing high-quality development will inevitably require conditions of even greater openness. To fully and faithfully apply the new development philosophy, accelerate the creation of a new development dynamic, and propel high-quality development, we must pursue a higher standard of opening up. Improving the systems and mechanisms for high-standard opening up, while coordinating the advancement of in-depth reform and high-standard opening up, will help accelerate the development of new quality productive forces. It will enable us to effectively upgrade and appropriately expand China's economic output.

Third, it is vital for shouldering our responsibilities as a major country in promoting economic globalization

As President Xi has noted, "Economic globalization is an irreversible trend in history." In recent years, however, economic globalization has experienced a backlash, with a small number of countries advocating "decoupling" and the creation of "small yards and high fences." These countries have pursued a three-pronged approach by attempting to reshore, nearshore, and friendshore industries. Indeed, the World Openness Index indicates that our world has become a less open place than before. This calls for us to stand on the right side of history. We must firmly push back against the tides of de-globalization and pan-securitization and reject both unilateralism and protectionism. Improving the systems and mechanisms for high-standard opening up and promoting the liberalization and facilitation of trade and investment will help deepen international cooperation in industrial and supply chains. It will facilitate joint efforts to foster new drivers for global growth, build an open global economy, and boost universally beneficial and inclusive economic globalization. 

Fourth, it is an important measure for building a global community of shared future  

As President Xi has pointed out, "Building a global community of shared future is the way forward for all the world's peoples." It is clear that humanity is increasingly becoming a community of shared future in which the interests of all are closely interlinked. At the same time, however, deep-seated problems are prominent throughout the world. This calls for embracing our shared destiny. We must rally all nations to join hands to overcome challenges and realize shared prosperity. By improving the systems and mechanisms for high-standard opening up, promoting high-quality Belt and Road cooperation, and pursuing the Global Development Initiative, the Global Security Initiative, and the Global Civilizations Initiative, we can help create a fairer and more equitable international economic order. This will also enable us to make greater contributions to promoting a global community of shared future.

II. The essential meaning of high-standard opening up 

The more China develops, the more open it will become. Indeed, China's doors to the outside will only open wider. It is vital that we fully grasp the guiding principles of the third plenary session of the 20th CPC Central Committee, resolutely pushing ahead with high-standard opening up and advancing a broader agenda of opening up across more areas and in greater depth. In advancing high-standard opening up, it is important that we do the following.

First, pursuing institutional opening up to align with high international  standards

Institutional opening up is an important symbol of high-standard opening up in China. Since the 18th CPC National Congress in 2012, we have worked to align with high-standard international economic and trade rules. We have both pursued deeper opening up in terms of flows of production factors and steadily expanded opening up in terms of institutions. At present, there is still room for further institutional opening up. Advancing high-standard opening up means seizing the opportunities presented by our accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA). In doing so, we should promote a high level of alignment with international rules, regulations, management, and standards in key sectors and forge new strengths for developing a higher-standard open economy.

Second, taking voluntary steps and adopting unilateral measures to open our doors wider

Voluntary opening up and unilaterally opening our doors wider to the world's least developed countries are two important ways China can proactively open its market to the global community. Since the 18th CPC National Congress, the development of pilot free trade zones and the Hainan Free Trade Port has served as an important step in voluntarily opening wider to the world. These zones have effectively functioned as comprehensive testing grounds for reform and opening up. Furthermore, we have granted duty-free access to a wider range of products from the least developed countries. Advancing high-standard opening up means taking a more proactive approach. It involves further widening market access, leveraging platforms for opening up as forerunners and testing grounds, increasing support for the world's least developed countries, and using our openness to drive greater common openness around the world and realize positive interactions between different countries.

Third, seizing opportunities for digitalization and green development

Digitalization and green development are emerging as important new engines for global economic growth. Since 2012, our country's digital and green economies have developed rapidly. In 2023, the import and export value of digitally deliverable services (a measure of digitally delivered trade encompassing digital products, digital services, digital technology, and data trade) exceeded 2.7 trillion yuan. The value of cross-border e-commerce imports and exports reached 2.4 trillion yuan. China has also made great contributions to the global green transition through trade and investment cooperation in the new energy sector. Advancing high-standard opening up means being oriented toward digitalization and green development. It is about accelerating the transformation of our growth model, deepening international cooperation with regard to the digital economy and green development, and actively getting involved and taking a lead in formulating international rules, so as to foster new growth drivers and strengths.

Fourth, meeting people's needs for a better life

Ultimately, the purpose of opening up is to improve the wellbeing of our people. Since the 18th CPC National Congress, opening up has been a powerful driver of steady growth and stable employment, creating benefits for our people. Foreign trade and investment have supported over 200 million jobs both directly and indirectly. Furthermore, large inflows of high-quality imports have facilitated upgrades in both industry and consumption. People are now generally less concerned about simply having enough and more focused on enjoying better quality. Advancing high-standard opening up means ensuring and improving people's wellbeing. It involves consolidating the fundamentals of foreign trade and investment, converting the dividends derived from opening up into drivers for growth, and promoting balanced regional development. All this will ensure that more people enjoy a greater share of the gains generated from opening up.

Fifth, pursuing mutually beneficial cooperation 

History has repeatedly proven that openness, inclusiveness, and mutually beneficial cooperation are the right path for humanity. Since the 18th CPC National Congress in 2012, we have firmly adhered to a mutually beneficial strategy of opening up. As a result, China has emerged as a major trading partner for over 140 countries and regions. Moreover, it has consistently accounted for around 30% of global economic growth. The China International Import Expo (CIIE) has gone from strength to strength and continues to create new opportunities for the world through China's development. Now more than ever, humanity must rely on international cooperation, openness, and sharing in order to solve the global development challenges we face. Advancing high-standard opening up means forging closer bonds with countries around the world through shared interests. It involves playing an extensive role in the global industrial division of labor and industrial cooperation and maintaining a diverse and stable international economic landscape and trade relations in order to promote shared development.

A designated yard for imported finished vehicles at Chenglingji Port in the China (Hunan) Pilot Free Trade Zone (FTZ). Using inland river ports, Hunan FTZ has helped accelerate the innovation of automobile distribution systems through a pilot program for parallel vehicle imports. MANAGEMENT COMMITTEE OF YUEYANG AREA, CHINA (HUNAN) PILOT FREE TRADE ZONE

Sixth, ensuring both development and security

The more open we are, the more we must focus on security, and the more we must coordinate development and security. Since 2012, we have applied a holistic approach to national security, working to weave a robust safety net for opening up in order to guard against and defuse various risks. At present, we are faced with a grave and complex international landscape, marked by an increasing number of uncertainties and unforeseen factors. Advancing high-standard opening up is about ensuring positive interactions between high-quality development and greater security. It means enhancing our capacity and standards for regulating opening up. As we expand opening up, we must work to boost our composite national strength and work in a dynamic way to safeguard economic security.

III. The main tasks for improving the systems and mechanisms for high-standard opening up

Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we must thoroughly study and implement the guiding principles from the third plenary session of the 20th CPC Central Committee and strengthen the Party's overall leadership over opening up. We must remain committed to the basic state policy of opening to the outside world and continue our reform through opening up. Leveraging the strengths of China's enormous market, we should enhance our capacity for opening up while expanding international cooperation and developing new institutions for a higher-standard open economy.

First, steadily expanding institutional opening up

We must aim to meet world-class standards while also actively getting involved in the formulation of international rules. We should promote alignment with high-standard international economic and trade rules and harmonize rules, regulations, management, and standards relating to property rights protection, industrial subsidies, environmental standards, labor protection, government procurement, e-commerce, the financial sector, and other areas, in order to foster an institutional environment that is transparent, stable, and predictable. We need to take the initiative by opening China's commodity, services, capital, and labor markets wider in an orderly manner and unilaterally granting broader access to the world's least developed countries.

To safeguard the WTO-centered multilateral trading system, we should fully participate in WTO reform, actively work to restore the normal operation of the WTO dispute settlement mechanism, and strive for the adoption of the first set of multilateral digital trade rules. Efforts should also be made to actively take part in the reform of global economic governance and to provide more global public goods. We need to expand our globally-oriented network of high-standard free trade areas, take measures to become more open under the framework of free trade agreements, and take steps to incorporate rules on digital issues, environmental sustainability, and standards into such agreements. We should establish compliance mechanisms that align with prevailing international rules and step up efforts to ensure trade policy compliance, so as to optimize the environment for opening up and cooperation.

Second, deepening foreign trade structural reform

We must move faster to turn China into a strong trading nation by enhancing our position in the international division of labor and moving toward the medium-and high-end of the global value chain. We need to put in place a set of systems and policies to support the development of a strong trading nation and better coordinate trade policies with fiscal, tax, financial, and industrial policies. We should adopt new regulatory approaches for customs clearance, taxation, and foreign exchange, fostering an institutional environment that is conducive to the development of new models and forms of business. We should also accelerate reforms to integrate domestic and foreign trade. The mechanisms for preventing and controlling trade risks should be improved, and our export control framework and trade remedy system also need to be refined. We must introduce supporting regulations and rules for the Export Control Law, establish a coordinated multi-stakeholder mechanism for addressing trade frictions, and reinforce the safeguards for ensuring national security in the trade sector.

Moves should be taken to upgrade trade in goods. We must work to expand new growth drivers for foreign trade, including trade in intermediate goods and green trade, and promote international cooperation on foreign trade product standards and conformity assessment procedures. We should build commodity trading centers and global distribution centers, support various types of entities in developing logistics facilities overseas in a well-ordered way, and facilitate the growth of international logistics hubs, as well as hubs for the distribution of commodities and resources, in areas where conditions allow. Innovative measures should be adopted to boost trade in services. We must fully apply the negative list for cross-border trade in services, promote comprehensive trials and demonstrations for expanding opening up of the service sector, and encourage specialized service organizations to enhance their capacity for providing international services. New types of transactions in offshore international trade should be created in areas where conditions allow. We should set up sound systems for cross-border financial services and move to diversify the supply of financial products and services. Digital trade must also be bolstered in an innovative manner. Digital products, services, and technology, as well as data trade, should all be tapped to see digital technologies empowering all stages of trade. Integrated pilot zones for cross-border e-commerce should be promoted. Finally, we must continue to make a success of hosting major exhibitions such as the CIIE, China Import and Export Fair (the Canton Fair), China International Fair for Trade in Services, and the Global Digital Trade Expo.

Third, further reforming the management systems for inward and outward investment

To build the "Invest in China" brand, we need to ramp up efforts to attract and utilize foreign investment. We must ensure efforts are made to both attract high-quality inward investment and encourage high-level outward investment. In line with this, market access for foreign investment should be steadily eased. We should expand the catalog of encouraged industries for foreign investment, appropriately shorten the negative list for foreign investment, remove all market access restrictions in the manufacturing sector, and promote wider opening with regard to telecommunications, the internet, education, culture, medical services, and other sectors in a well-conceived way. We need to further reform the institutions and mechanisms for promoting foreign investment. We must ensure national treatment for foreign-funded enterprises in terms of access to factors of production, license application, standards setting, and government procurement and support these enterprises in collaborating with upstream and downstream enterprises in industrial chains. We should refine the institutions and mechanisms for promoting and protecting Chinese investment abroad, improve the management and service systems for outward investment, and facilitate international cooperation in industrial and supply chains.

We need to foster a first-rate business environment that is market-oriented, law-based, and international. To this end, we should further enhance the roundtable system for foreign-invested enterprises to timely tackle issues faced by foreign companies and safeguard foreign investors' legal rights and interests. Relevant measures should also be refined to make it more convenient for people from outside the mainland to live, receive medical services, and make payments.

Fourth, optimizing the layout for regional opening up 

The comparative advantages of different regions must be fostered and fully harnessed, and the role of opening up must be better leveraged in driving regional economic development. We must move faster toward all-around opening up through links running eastward and westward, across land, and over sea. We need to consolidate the leading role of eastern coastal areas in our opening up endeavors and promote further opening up in the central, western, and northeastern regions. We should leverage the strengths of areas along the coasts, borders, rivers, and major transportation routes as clusters of factors for opening up and optimize the division of functions for opening up among different regions to develop a diverse array of pacesetters in this regard. The strategy for upgrading pilot free trade zones must be implemented. We should grant zones more power to conduct reform and encourage them to engage in pioneering and integrated explorations with a view to driving the innovative development of entire industrial chains and creating new institutional innovations that can be applied elsewhere. The development of the Hainan Free Trade Port must be accelerated, and more steps need to be taken to further liberalize and facilitate trade and investment.

We should improve relevant mechanisms to see Hong Kong and Macao play a greater role in China's opening to the outside world. Harnessing the institutional strengths of the One Country, Two Systems policy, we must work to consolidate and enhance Hong Kong's status as an international financial, shipping, and trade center, support Hong Kong and Macao in building themselves into international hubs for high-caliber talent, and take steps to protect the world-class business environments of the two regions. We should also encourage cooperation between Guangdong, Hong Kong, and Macao in the Greater Bay Area by promoting closer alignment of rules and mechanisms. Furthermore, we should improve relevant institutions and policies to promote economic and cultural exchanges and cooperation across the Taiwan Strait and advance integrated cross-Strait development.

Fifth, improving the mechanisms for high-quality cooperation under the Belt and Road Initiative

We must promote in-depth economic and trade cooperation and drive deeper and more substantive progress in high-quality Belt and Road development. We need to establish more international cooperation mechanisms to ensure smooth flows in trade, investment, services trade, and e-commerce and work to conclude free trade agreements and investment protection treaties with more countries. We should continue to implement the Belt and Road Science, Technology, and Innovation Cooperation Action Plan and redouble efforts to develop multilateral platforms for cooperation in green development, the digital economy, artificial intelligence, energy, taxation, finance, disaster mitigation, and other areas.

To promote practical cooperation, we must refine the integrated framework for land, sea, air, and cyberspace connectivity and develop a multidimensional network to connect countries along the Belt and Road. We should also make coordinated efforts to advance both major signature projects and "small but effective" public welfare projects. We should pursue high-quality development of overseas cooperation parks, including economic and trade cooperation zones. Pilot zones for Silk Road e-commerce cooperation should also be launched. Finally, efforts must be made to deepen cooperation in areas such as green infrastructure, green energy, and green transportation.

(Originally appeared in Qiushi Journal,  Chinese edition, No. 16, 2024)