Long-haul engine for global growth

JIN DING/CHINA DAILY

The new development paradigm and high-level opening-up will help promote the development of world economy

China's new development paradigm and steadfast advancement of high-level opening-up are strategic choices to more deeply integrate it into the world economy so as to continuously promote economic globalization.

China is in a critical period of its economic transformation and upgrading. Although it faces relatively high pressure in the short term, it has huge potential in the medium and long term. And the Chinese market also has the most potential, not only now but in the future.

In 2020, the total retail sales of consumer goods in China amounted to $5.68 trillion, which was 97.6 percent of that of the United States in the same period. Based on the average growth rate in the past five years, it is estimated that China's total retail sales of consumer goods may well surpass that of the US, to become the world's largest consumer market by 2022.

Adjusting and optimizing China's industrial structure will create huge space for market expansion. It is estimated that by 2025, the proportion of China's producer service industry in GDP will increase from the current 30 to 40 percent, and the information consumption driven by the commercialization of 5G communication technology will surpass 8 trillion yuan ($1.25 trillion), directly driving the economic output to grow by 10.6 trillion yuan.

The releasing of China's huge market potential is good news for the global market. Practice has fully shown that China's efforts to build an open economic system are not only conducive to fully releasing its own potential, but also help deepening its integration into the global economy, contributing to the development of an open world economy.

The purpose of high-level opening-up with expanding domestic demand as the orientation is to strengthen the linkages between the domestic and external markets and to commonly share resources and factors of production with other countries to forge a new pattern of more open and cooperative development. And China's deepening of reforms with opening-up and promoting of opening-up with reforms will help it to win the initiative in international economic cooperation and competition. China's unsolicited application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership demonstrates its determination and proactive efforts to promote a more open global market.

Further improving the management of the pre-entry national treatment and negative list approach for foreign investment and ensuring post-entry national treatment will help create a more open economic system through institutional opening-up. It will boost market and innovation dynamics to the greatest extent by accelerating the alignment of rules in the service sector with international ones, switching economic policies from taking industrial policies as the mainstay to taking competition policies as the foundation by strengthening the scrutiny of economic policies for fair competition, taking the initiative in aligning the country with high-level economic and trade rules and strengthening the protection of property and intellectual property rights.

According to a preliminary estimate, the digital service trade will account for half of China's total service trade by 2025. To accelerate the development of the digital service trade, it is necessary to comprehensively enhance the implementation of the negative list management of the cross-border service trade, lower behind-the-border barriers to different modes of the service trade, and to adjust and optimize the service trade structure.

China's efforts to advance high-level opening-up are not only providing important impetus for multilateral and bilateral free trade processes, but also strengthening its voice and influence in global economic rule-making.

China will make more contributions to global economic growth. According to the latest projections of the International Monetary Fund, in the next five years, China's contribution to the world's economic growth is expected to stand at 25 to 30 percent, which means that China will remain a major stabilizer and driver for global economic growth.

China's development needs the world, and vice versa. It is estimated that, in the next five years, the growth rate of China's service imports will be higher than the global average for the same period. In the next 15 years, it is expected that China's imported goods and services will exceed $30 trillion and $10 trillion respectively.

To address the impacts of global crises greater cooperation is essential. In the face of new global energy, debt and supply chain crises, major economies need to strengthen their macroeconomic policy coordination and to highlight development in the global macro policy framework.

For example, policy coordination and international cooperation on energy need to be enhanced, joint efforts need to be made to promote technological innovations and advance the world energy transformation toward a cleaner and more sustainable trend. Likewise, industrial policy coordination needs to be strengthened to stabilize global supply chains and push forward the realization of global carbon neutrality, and monetary policy coordination needs to be enhanced to prevent global financial crises.

The author is president of China Institute for Reform and Development. The author contributed this article to China Watch, a think tank powered by China Daily.

The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn