Editor's Note: Common prosperity and high-standard opening-up have emerged as highlights of the report delivered by Xi Jinping, general secretary of the Communist Party of China Central Committee, at the 20th CPC National Congress on Oct 16. Led by the CPC, the world's most populous nation and second-largest economy is seeking Chinese modernization, which is a model of modernization of a huge population, of common prosperity for all, of material and cultural-ethical advancement, of harmony between humanity and nature, and of peaceful development. The following in-depth articles by Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, and Zheng Yongnian, a professor at the Chinese University of Hong Kong in Shenzhen, offer an overview of the path China will take to realize its national goals that will also strengthen the world.
(CAI MENG / CHINA DAILY)
As we embark on a new journey to build China into a modern socialist country in all respects, the country is expected to promote free flows of goods, services, resources and other production factors at a higher level, advance institutional opening-up with higher standards, and push for more openness in the world regarding innovations.
In the next step, the focus of liberalization and facilitation for trade in goods will shift from achieving zero tariffs, zero barriers and zero subsidies to raising efficiency and the level of facilitation, while market access and investment liberalization in the services sector will also be advanced to a higher level.
Under the Regional Comprehensive Economic Partnership framework, China has adopted the positive-list approach in terms of trade in services and promised to convert it to the negative list within six years of the trade pact's entry into effect.
The essence of opening-up is reforming, or in other words, opening-up can accelerate aligning domestic economic rules and mechanisms with international ones by introducing external competitors. Building a high-standard market system is one of the key tasks of opening-up in the following years.
The 15 member countries of the RCEP will form three economic cooperation circles. The first is that between China and the Association of Southeast Asian Nations, China's largest trade partner; the second is that among China, Japan and South Korea, or the three core countries of the East Asian production network; and the third is that among China, Australia and New Zealand, which is crucial for China to secure primary product supplies.
To promote high-level free flows of goods, services, resources and other production factors, the formulation of the three economic cooperation circles mentioned above will be a key, which hopefully will become a best practice for promoting globalization under the new circumstances.
China officially applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) last year, which showed that China will continue to promote institutional opening-up and further align with high-standard international rules.
China is expected to comprehensively deepen reforms in sectors including State-owned enterprises, competition policy, industrial subsidies, intellectual property rights and environmental standards, to build a high-level socialist market economic system and a new economic system with high-level openness.
As there is fierce competition and disagreement between the world's major economies over digital rules, if China, the world's second-largest digital economy, joins the Digital Economy Partnership Agreement (DEPA), it can promote diversified, modular and adaptable digital rules that are more in line with the digital development needs of small and medium-sized economies and small and medium-sized enterprises.
The external environment for China's opening-up is quite complicated. For one thing, rules-based globalization has stalled, which means an end to the golden age of world economic growth. For another, global trade and investment are slowing down, and the era when trade was the engine of global economic growth may have become a thing of the past. Besides, the relationship between China and the United States is also crucial.
Currently the US is trying to exclude China from globalization, global supply chains and Asia-Pacific economic cooperation, while China vigorously promotes strategies of "anti-decoupling", "cooperation instead of confrontation" and "openness instead of exclusiveness" to "preserve the diversity and stability of the international economic landscape, and economic and trade relations."
Against such a background, China also faces quite a lot of challenges in attracting foreign investment.
The actual use of foreign capital in China reached 892.74 billion yuan ($123.2 billion) in the first eight months of the year, surging 16.4 percent from a year ago, of which 75 percent flowed into the services sector. In 2021, less than 20 percent of the foreign investments China received went into the manufacturing sector.
In practice, some global multinational companies are dividing their industrial and supply chains into two parallel systems — one with China and the other with the US.
Some people in the US and other Western countries are trying to turn China into an ordinary market for multinational companies by withdrawing key technologies and the production of key equipment and parts from China.
To better attract foreign investment, it is necessary to address the concerns of foreign investors with actions, policy measures and institutional arrangements.
A key factor for foreign investors to decide to invest in China is the expectation that China will not fall into the trap of conflict and confrontation in East Asia.
As for Sino-US relations, there are many overlapping interests between the two countries, and it is impossible to decouple in many areas.
China should create a situation where the US cannot decouple with it due to common interests, through comprehensively deepening reform as well as by expanding all-around opening-up in science and technology, industry and finance.
In August, China announced that it is comprehensively advancing negotiations on joining DEPA.
The nation should push for more openness in the world regarding innovations in sectors like science, technology, engineering and mathematics to expand its high-level opening-up.
It is now the era of the artificial intelligence revolution, or in other words, digital technology revolution. The digital economy has become an important form of economy, as the agricultural economy, industrial economy, service economy and knowledge economy are.
China must make use of the major opportunities arising from the fourth industrial revolution, which will determine the future relations between the Chinese economy and the world economy, and will also decide China's new position in the global supply chain.
The revolution in digital technology will very likely promote the development of smart logistics and digital supply chain management through internet and digital means like big data, cloud computing, blockchain, 5G and industrial internet, to build a new, distributed global production system based on human-computer interaction.
The supply chain in each region is short but highly elastic and flexible, and can meet new needs like localization, personalization, and small-volume customization via smart logistics and digital supply chain networks.
That also enables relying on market, technological and nongovernmental forces to defeat extremists who want to provoke a new cold war with their decoupling attempts.
If the US and the European countries dominate the formation of digital trade rules, China and the vast majority of countries in the world will be subjected to a passive situation.
Therefore, to acquire a greater voice, rule-making and pricing capability on digital trade, China must participate in the formulation of digital trade rules, actively participate in DEPA and then promote the trade pact.
That will help in promoting the regulation and development of digital trade, and help in motivating most of the economies and business communities in the world to discuss, jointly build, and share the opportunities and achievements of the digital economy.
Joining DEPA is a small but important step for China to make more contributions to improving global economic governance and building a community with a shared future for mankind.
The author is chief researcher at the China Center for International Economic Exchanges.
The views don't necessarily reflect those of China Daily.