Only re­cip­ro­cal moves can boost trade ties

China Daily (Hong Kong) - - VIEWS - Yang Changy­ong and Li Dawei The au­thors are re­searchers at the In­sti­tute of In­ter­na­tional Eco­nomic Re­search, Chi­nese Academy of Macroe­co­nomic Re­search.

In his key­note speech at the Boao Fo­rum for Asia on April 10, Pres­i­dent Xi Jin­ping elab­o­rated on China’s new vi­sion, poli­cies, re­spon­si­bil­i­ties and ini­tia­tives to ad­vance open­ing-up, demon­strat­ing China’s com­mit­ment to fur­ther open­ing up its econ­omy in the new era.

Xi’s re­marks also show fur­ther open­ing-up is the only way for China to pur­sue higher-qual­ity eco­nomic de­vel­op­ment, build a mod­ern eco­nomic sys­tem, and shoul­der its re­spon­si­bil­i­ties as a big power while pro­mot­ing glob­al­iza­tion for the well-be­ing of peo­ple across the world. Fur­ther open­ing up its econ­omy to the out­side world, at­tract­ing high­qual­ity for­eign cap­i­tal, in­creas­ing im­ports, and pro­mot­ing the free flow of cap­i­tal, goods and tech­nolo­gies will help China bet­ter re­spond to in­ter­na­tional con­cerns, in­ten­sify self-de­vel­op­ment and re­duce fric­tions with other coun­tries to re­al­ize win-win co­op­er­a­tion and help build a com­mu­nity of shared fu­ture for hu­mankind.

For­eign-funded en­ter­prises have played a vi­tal role in China’s eco­nomic de­vel­op­ment and helped it to ex­pand its cap­i­tal and for­eign ex­change re­serves, in­tro­duce tal­ents, and im­ple­ment mar­ket-ori­ented re­forms. China wants them to con­tinue play­ing that role in the new era.

China’s econ­omy is shift­ing from high-speed growth to higher-qual­ity de­vel­op­ment, but many of its in­dus­tries still lag be­hind those in de­vel­oped economies in terms of tech­nol­ogy, ex­per­tise and ef­fi­ciency.

So, to at­tract top-notch multi­na­tional en­ter­prises and im­prove the qual­ity of for­eign cap­i­tal, China should deepen sup­ply-side struc­tural re­form by, for in­stance, mak­ing bet­ter use of global re­sources, keep­ing pace with global tech­no­log­i­cal de­vel­op­ment, es­tab­lish­ing mod­ern cor­po­rate and mar­ket eco­nomic sys­tems, and pro­mot­ing high­erqual­ity eco­nomic de­vel­op­ment. This will also help de­vel­oped economies’ en­ter­prises to bet­ter use their tech­no­log­i­cal ad­van­tages and make higher prof­its.

One of China’s key goals is to lower the en­try thresh­old to its ser­vice mar­ket to at­tract more for­eign cap­i­tal. China eased the re­stric­tions on the share of for­eign cap­i­tal in do­mes­tic bank­ing, se­cu­ri­ties and in­sur­ance sec­tors at the end of last year, and it is ex­pected to fur­ther re­lax or sus­pend such re­stric­tions in the fund man­age­ment, fu­tures, and fi­nan­cial as­set man­age­ment sec­tors. It will also fur­ther open up its telecom­mu­ni­ca­tions, health­care, ed­u­ca­tion and pen­sion ser­vices sec­tors.

Besides, China is ex­pected to ease or can­cel the lim­its on for­eign share­hold­ing in its au­to­mo­bile, ship­build­ing, and air­craft man­u­fac­tur­ing in­dus­tries to push for­ward do­mes­tic re­form, ac­cel­er­ate in­no­va­tion, op­ti­mize re­source dis­tri­bu­tion and pro­mote mid­dle- and high-end de­vel­op­ment in man­u­fac­tur­ing.

Ex­press­ing con­cern over China’s in­tel­lec­tual prop­erty rights pro­tec­tion laws, some de­vel­oped economies are re­luc­tant to in­vest cap­i­tal or tech­nolo­gies in China. But the fact is that China has al­ways tried to strengthen IPR pro­tec­tion and meet the World Trade Or­ga­ni­za­tion’s re­quire­ments to im­prove its so­cial­ist mar­ket econ­omy.

Be­liev­ing IPR pro­tec­tion is nec­es­sary to at­tract for­eign cap­i­tal, tech­nolo­gies and tal­ents, China will deepen co­op­er­a­tion be­tween do­mes­tic en­ter­prises and for­eign com­pa­nies. As a sig­nif­i­cant step to­ward re­in­forc­ing IPR pro­tec­tion, China has re-or­ga­nized its in­tel­lec­tual prop­erty of­fice, which may im­pose higher penalty for IPR in­fringe­ments.

More­over, China will also in­crease im­ports so that the rest of world can bet­ter share the fruits of its de­vel­op­ment. As Pres­i­dent Xi has said, China is a ben­e­fi­ciary of and also a con­trib­u­tor to eco­nomic glob­al­iza­tion, and its de­vel­op­ment is an op­por­tu­nity for the world.

With the in­crease of Chi­nese peo­ple’s in­comes, the de­mand for high-qual­ity goods and ser­vices, such as foods, health­care, and cul­tural ac­tiv­i­ties in China will keep grow­ing. Which means China will have to im­port more and more of such goods and ser­vices to meet its cit­i­zens’ up­graded con­sump­tion de­mand.

But only through the joint ef­forts of other coun­tries can China ef­fec­tively in­crease its im­ports. If, based on WTO rules, China low­ers im­port tar­iffs on such con­sumer goods as cars, medicines, health­care prod­ucts, cos­met­ics, in­stru­ments and ap­pa­ra­tuses, and sim­pli­fies the cus­toms clear­ance pro­ce­dures for them to fa­cil­i­tate their im­port, other coun­tries, es­pe­cially de­vel­oped ones, will have to forego their prej­u­dices and ef­fec­tively re­lax their re­stric­tions on the ex­port of high-tech prod­ucts to China to bet­ter share the huge Chi­nese mar­ket.

China is a ben­e­fi­ciary of and also a con­trib­u­tor to eco­nomic glob­al­iza­tion, and its de­vel­op­ment is an op­por­tu­nity for the world.

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