As an indicator of China’s macroeconomic policy, the 2019 Central Economic Work Conference held in December set the tone for the future development of the Chinese economy. The forecasts on the three macro aspects of the economy are worth our attention.
China’s development will be in the important strategic period for a long time.
At present, there is a widespread debate on whether China’s development still has the important strategic opportunity period. President Xi Jinping once pointed out that the historical boom and opening-up period often coincide with each other, which means that if a country can seize the opportunities during the opening-up period of the world economy, it will be able to enter the fast lane of world economic growth. Therefore, China joined the WTO to participate in economic globalization.
However, the current anti-globalization, trade protectionism and unilateralism have intensified the political and economic relations between major powers and increased various types of risks around the world. Does China’s economy still have the important strategic opportunity period?
The Central Economic Work Conference clearly pointed out that China’s development is still in the important strategic opportunity period. In order to seize this historic strategic opportunity, we must continue to push forward globalization, oppose trade protectionism and unilateralism; continue to maintain a peaceful international environment and a stable international order, and oppose the destruction of the existing economic order. Furthermore, we must continue to deepen all-round international cooperation, promote new technological revolutions and industrial changes, and oppose zero-sum games and bullying.
Proper handling of the China-U.S. trade frictions.
The current world is experiencing an unprecedented change and how will China and the United States handle their differences in the three major areas of economics, politics and ideology, security and strategy will affect the future of the entire world.
In the 1930s, the United States provoked a trade war, which eventually led to a 66% contraction in global economy. China has become the largest trading partner of more than 120 countries, and the United States has a trade deficit with 102 countries and hence, s serious disruption on the China-US trade will have a huge impact on the world economy.
In fact, China’s development still has sufficient resilience, great potential and bright future in the long-term. The diversified economic structure, the advantages of the entire industry chain, and the massive domestic market are good enough to withstand the challenges of any big country. Proper handling of the China-U.S. economic and trade frictions will help China to continue its comprehensive and deepening reforms, further expand opening up, and build a China-US relationship that goes beyond zero-sum games. China and the United States should shoulder more international responsibilities and cooperation is the only right choice to make.
Promoting institutional opening-up.
The Central Economic Working Conference proposed to promote all-round opening up, from goods and element-based opening-up to institutional opening-up. One of the purposes of China’s accession to the WTO is to promote the integration of its institutional mechanisms with internationally accepted rules.
Specifically, the current institutional opening-up covers the following three aspects.
First of all, promoting rule-based opening-up means learning and connecting with advanced international rules, standards and management systems, such as relaxing market access, fully implementing the management model of pre-establishment national treatment (PENT) with a negative list, and protecting foreigners’ legitimate rights in China, especially intellectual property rights and permit sole proprietorship in more areas.
Secondly, promoting rule-based opening-up means the modernization of national governance system and governance capacity, and gradually establish a contemporary governance system.
Lastly, promoting institutional international cooperation means that China will carry out international cooperation in terms of capacity building, system establishment, cross-border network, and the reform of the global governance framework such as the WTO.
China will work with other countries to further improve the trade dispute settlement mechanism, jointly improve the efficiency of the WTO, promote the research and formulation of new issues and rules relating to the WTO, and oppose any attempt to overthrow the existing international order.