China's commitment to wider opening up set to boost global economic growth

An aerial drone photo taken on July 3, 2024 shows a fully automated container terminal of Qingdao Port in operation in east China's Shandong Province. [Xinhua/Guo Xulei]

BEIJING -- China, a major contributor to global economic growth, has reiterated its commitment to opening up during a key policy meeting, a move expected to provide much-needed certainty and opportunities to a world that has been mired in sluggish growth for years.

The country's renewed plan for opening up is part of a comprehensive set of reforms outlined in a document released after the third plenary session of the 20th Communist Party of China Central Committee, which was held from July 15 to 18.

The country has pledged to foster a first-class business environment, protect the rights and interests of foreign investors, further open its commodities, services, capital and labor markets to the world, and expand a globally oriented network of high-standard free trade areas.

China's efforts toward trade liberalization and investment facilitation have become increasingly crucial amid a growing trend of trade protectionism and the "de-coupling and severing of industrial and supply chains" by some countries.

The global economy is currently grappling with the challenge of weak recovery momentum, alongside a complex and unpredictable geopolitical landscape. Consequently, international capital is increasingly seeking safety and hedging against risks.

The Global Investment Trends Monitor, released by the United Nations Conference on Trade and Development in January, revealed that global foreign direct investment (FDI) flows, excluding certain conduit economies, declined by 18 percent in 2023.

In such conditions, countries might be tempted to embrace protectionism and adopt a more inward-looking stance. Sustaining an open approach requires both courage and foresight.

As a beneficiary of opening up and the integration into the global economy, China believes that reform and opening up remain "essential means" for expanding its development achievements.

In addition to propelling its own development, China has pledged to accelerate its opening up and share its development opportunities with the world in order to develop together and more sustainably.

China's vast market of over 1.4 billion people represents a huge opportunity for the world. The country aims to enhance its capacity for opening up and expand international cooperation by leveraging the strength of this enormous market. This means China will proactively open its doors wider to the outside world, transforming the Chinese market into a global marketplace.

More importantly, China is advancing from merely facilitating the opening up of goods and factors to strengthening institutional guarantees for greater opening up. While this may incur compliance costs in the short term, it will enhance the country's trade resilience in the long run and align it more closely with global practices.

As highlighted in the policy document, China will align its domestic economic and trade rules with high-standard international standards. This includes harmonizing regulations and standards across areas such as property rights protection, industrial subsidies, environmental standards, labor protection, government procurement, e-commerce and the financial sector.

China's policy arrangements to encourage foreign investment are both specific and resolute. These include shortening the negative list for foreign investment, eliminating market access restrictions in manufacturing, and expanding the catalog of industries encouraged for foreign investment. These measures respond to market demands and reflect the commitment of policymakers to improving economic governance.

Despite global headwinds, China has continued to be a hotspot for foreign investment and business development. Official data showed that the number of newly established foreign-funded enterprises in the country surged by 39.7 percent last year.

According to the recently released 2024 Kearney FDI Confidence Index report, reflecting investors' expectations for FDI over the next three years, China's global ranking has risen from seventh to third place.

China's continuous efforts to promote opening up and free trade have yielded positive outcomes globally. The Belt and Road Initiative has attracted participation from three-quarters of the world's countries and significantly boosted international trade and investment.

Going forward, China's commitment to expanding its high-standard opening up remains steadfast, as does its determination to share development opportunities globally. This commitment will continually infuse the Chinese economy with fresh dynamism and vitality, while also creating new opportunities for the world.

The views don't necessarily reflect those of Qiushi Journal.