Source: CD    Published: 2022-10-19

Xi Jinping reiterated China’s commitment to opening to the outside world in his report to the 20th CPC National Congress. It is of vital importance not only for attaining CPC’s goal of China great rejuvenation, but also for upholding globalization and multilateralism under the current mounting geopolitical tensions and de-globalization trends.

Over the past ten years since the 18th CPC National Congress, the opening-up strategy and policies have made indispensable contributions to China’s fast economic rise. China’s total volume of goods imported and exported hit 39.1 trillion yuan ($5.4 trillion) in 2021, 60.1 percent up over 2012, 13.5 percent of the world total. China became the world largest exporting power in 2012 and the largest trading power in 2017, and is now the largest trading partner for 140 countries and regions in the world. Net export has made important contributions to the medium-high GDP growth of the country.

The contribution has been especially noticeable over the past three years since the country has been hit by COVID-19 pandemic. Net export contributed 0.7 percent to 2.2 percent total GDP growth in 2020, 1.7 percent to 8.1 percent total GDP growth in 2021, and 0.9 percent to 2.5 percent total GDP growth in H1, 2022. Import and export trade and related activities have created 180 million jobs in the country.

The past 10 years have also witnessed unprecedented growth of China’s foreign direct investments both ways. According to the World Investment Report 2022 (UNCTAD), by the end of 2021 the total of China’s foreign direct investment inward stock reached $2,064.02 billion, the world’s fourth largest, only after the US, UK and Netherlands. The total of China’s foreign investment outward stock hit $ 2,518.80 billion, the world’s third largest, only after the US and Netherlands. China has emerged, in only a decade, as the world leading player in cross-border capital investment.

The 20th National CPC Congress has stipulated that, the central task facing the whole Party and country is to attain the second centenary goal of China’s great rejuvenation, building China to a modern socialist power by 2049, with the first step to reach basic modernization by 2035. Xi stressed that the next coming 5 years will be crucial.

China is now facing increasing external risks, covering geopolitical, foreign relations, military, economic, trade, and technology. The Ukraine crisis has led to a drastic change in European geopolitical landscapes. The US and West’ devastating sanctions on Russia have posed grave risks to global supply chains in energy, food and several key high-tech materials. The US government has been intensifying containment, block and de-coupling with China. The recent Indo-Pacific Strategy, Indo-Pacific Economic Framework (IPEF), the 2022 Chip and Science Act, Chip 4, the US led Resilient Supply Chain, and the recent US total ban on chips, super-computing and quantum technology supply to China, have shown an intensifying political strategy to quench China’s rise, and to fragment the world to two camps: the West and the Rest. Undoubtedly, China faces increasing difficulties in her march toward the great rejuvenation, especially over the coming 5 years.

Under these circumstances, the only correct strategy is a resolute, unswerving opening-up; opening the door even wider to the whole world.

Xi pointed out in his report to the 20th CPC National Congress that, China is committed to the fundamental national policy of opening to the outside world and pursues a mutually beneficial strategy of opening up.

China possesses the world largest manufacturing base, larger than the US, Japan, and Germany combined. The current world trade pattern centers on intra and extra trade of East Asia and Pacific, Europe and Central Asia, and North America, with China, Germany and the US as three nexuses. China could well maintain and even reinforce its positions in the world trade paradigm and global supply chain. In this regard, the fundamental institutional opening up will be of foremost importance.

In his report to the 20th CPC National Congress, Xi stressed that “China will steadily expand institutional opening-up with regard to rules, regulations, management, and standards.” China has joined in 19 FTAs, with RCEP the largest, accounting for 30 percent of world GDP and trade. China is also applying to CPTPP and DEPA, both high standard RTAs. In the country, China has 21 FTZs, including the Hainan Free Trade Port. All those high-level opening-up moves will make China’s rules, regulations, management and standards more compatible to the world common practice, thus more profoundly integrated into the world. As a result, China will be more fundamentally interlinked with an overwhelming majority of countries, regions and companies of the world.

China persists to open its door wider to the world through advanced technology, products, capital and other resources, and create one of the world best destinations for cross-border investment. Despite Washington’s noisy fragmentation and de-coupling cries, direct investments from the US and its “allies” have been accelerating into China. Over the first 8 months of 2022, total FDI inflows to China reached $ 138.4 billion, 20.2 percent up year-on-year. With investment from South Korea, Germany, and Japan up 58.9 percent, 30.3 percent and 26.8 percent respectively, and up 36.3 percent from the US over the first 7 months of the year. Volkswagen, the German auto giant, announced recently a Euro 4 billion mega investment in China，the largest in 40 years.

China resolutely opposes the world fragmentation. There is no “the West and the Rest”, but only One World. The whole global supply chain must not be disrupted or cut by the insidious political moves. By unswerving adherence to the opening-up strategy, China will be able to keep and even reinforce the integrity of the global supply chains, covering both East and West, thus rendering a strong support to globalization, and to multilateralism with the UN and WTO at the core.

The further opening-up strategy will also support China’s Global Development Initiative (GDI), for global cooperation and the common destiny of mankind. In this regard, China could effectively reduce the external risks and challenges to its development at home, and render her great power obligation to the world’s peaceful development at large.

The author is senior fellow of Chongyang Institute of Financial Studies, Remin Unisversity.