Accelerate the Cultivation of New Advantages of China's International Competition

Summary March 5, Premier Li Keqiang made at the second meeting of the Twelfth National People's Congress, "Government Work Report", a comprehensive summary of the past year, China's economic and social development achievements, profound analysis of the situation and the current problems, Put forward the concept of government work and policy in the new year...
On March 5, Premier Li Keqiang’s "Government Work Report" at the Second Session of the 12th National People's Congress comprehensively summed up the achievements of China's economic and social development in the past year, and profoundly analyzed the current situation and problems. The government's work plan and policy priorities for the new year. The "Government Work Report" covers all aspects of China's economic and social development, and foreign trade is also one of the important contents. The "Government Work Report" proposes that by building a new open economy system, promoting a new round of opening up, it will force domestic reform and structural adjustment, accelerate the cultivation of new advantages in international competition, and create a new level of opening up to a new level.

In 2013, China’s import and export trade volume increased by 7.6% year-on-year. Although this growth rate is not high compared with the average growth rate of 16.4% in the 35 years of reform and opening up, it is still more than twice the actual growth rate of global trade during the same period. The global economic recovery is slow and the growth of international market demand continues to be low. In the background, it is hard to come by. Also in this year, China’s import and export trade has leapt to a new level in world trade, ranking first in the world with a size of 4.16 trillion US dollars. This is a new milestone in the history of China's foreign trade development. However, how far is China's goal as a trading power from a trade power? This is a proposition worthy of attention.

The status and influence of a major trading country

China's import and export trade has achieved new breakthroughs in stable growth that is significantly higher than the global level. In 1990, China's total trade volume ranked 15th in the world, and in 2000 it increased to seventh place. In 2013, it became the world's number one. one. The speed of the rise is so fast that the world is eye-catching. What is the impact of the growth of import and export trade on China and its impact on the world?

From the perspective of exports, the size of 2.2 trillion US dollars in 2013 is equivalent to 24.1% of the total GDP of the year. In recent years, the contribution rate of foreign trade to economic growth has averaged about 18%. According to estimates by the Ministry of Commerce, China's foreign trade directly and indirectly led to the employment of 180 million people in China, most of which came from rural areas, and the income and life of the employed were significantly improved. Through export, we have also achieved modern management, manufacturing technology and international competitiveness. The world has obtained strong guarantees for the supply of basic consumer goods, production materials and equipment from Chinese manufacturing, and has obtained the opportunity to choose low-cost, high-quality and diversified products. The proportion of China's exports to the world has increased from less than 1% in the early days of reform and opening up to the current level of around 12%.

In terms of imports, in 2013 China purchased 1.95 trillion US dollars of products from other countries (regions), equivalent to 19.6% of annual GDP. Many important mineral resources and bulk commodities abroad have met domestic consumption and production needs through imports. China's imports provide huge market space and growth opportunities for countries (regions) around the world. During the period from 2001 to 2013, China’s imports totaled US$13 trillion, and about 13% of the new global trade demand came from the contribution of China’s import growth.

The role of import and export trade is not only reflected in the above two aspects. The structural adjustment of import and export commodities has accelerated the upgrading of China's industrial structure, creating conditions for improving and optimizing the global industrial chain and promoting the division of labor across borders; the growth of foreign exchange reserves brought about by the long-term trade surplus has enhanced China's international ability to pay and resist risks. It also played a role for China to help the debt crisis or the economically underdeveloped countries and stabilize the international financial market; the long-term unremitting trade system reform and policy environment construction, while improving the level of trade facilitation and transaction efficiency, It has made positive contributions to improving the internationalization level of China's economy, promoting reform and marketization, and providing experience for many developing countries in the world.

The main performance of "big but not strong"

Although we are well-deserved trade powers, they are not a trade power. The main gaps and problems are reflected in the following aspects:

First, China's industry is still in the middle and low end of the global value chain, lacking core competitiveness, and the level of export value added is low. At present, China's export processing trade still accounts for nearly one-third of the proportion, core components and key technical equipment mainly rely on imports, domestic production is mainly processing and assembly, the added value is very limited, and the company's profit return is low.

Second, local enterprises lack the internationally competitive technology and brand advantages. The export pricing power is in the hands of multinational companies, and high-tech products are highly dependent on foreign-funded enterprises. Although China's export structure is continuously optimized, the proportion of high-tech products continues to rise. In 2013, the proportion of China's electromechanical and high-tech products exports has reached 57.3% and 29.9%, but the proportion of foreign-invested enterprises' production is as high as 61.2% and 73.0% respectively.

Third, China's service trade development level is low, and enterprises' competitiveness is weak. In 2013, China's import and export of service trade reached 539.64 billion US dollars, only 47.4% of the US, of which exports were 210.59 billion US dollars, less than 1/3 of the US. The service trade deficit in 2013 reached 118.46 billion US dollars, which is the largest trade deficit in the global service. One of the countries, while the US trade surplus with trade is as high as $231.63 billion, which is equivalent to the trade surplus of China's goods. China's exports in the fields of technology, knowledge-intensive and high-end services such as finance and insurance are relatively small and their competitiveness is low.

Fourth, the traditional advantages are facing challenges, the uncertainty of the external environment continues to increase, and international competitive pressures are increasing. First, in recent years, China's labor costs have continued to rise, the prices of water, electricity and industrial land have risen sharply, and the factor cost advantage has been weakened. Second, the export of a large number of high-energy, high-pollution and resource-based products has grown too fast and the proportion has been high. Resources and environmental pressures face difficult adjustments and constraints. Third, the long-term unsustainable balance of trade in goods and trade, while pushing up domestic liquidity expansion and rising prices, triggered the suppression of trade protectionism, and the trade friction against China continued to increase. Fourth, the appreciation of the renminbi, the “re-industrialization” of developed countries, and the cost advantages of other emerging economies have emerged, and the international competition faced by China’s export of products has intensified.

Important measures to cultivate new competitive advantages

The Third Plenary Session of the 18th CPC Central Committee adopted the "Decision on Comprehensively Deepening the Reform of Some Major Issues" and clearly proposed the strategic plan of "building a new open economic system." The "Government Work Report" will create a new level of opening up to the outside world as one of the priorities of 2014, and has made specific strategic arrangements around accelerating the development of new advantages in international competition:

First, take the initiative to expand all aspects. We will continue to actively and effectively use foreign capital, further liberalize investment access, promote the expansion of the service industry, and create a business environment that is transparent, stable, predictable, and fair competition between domestic and foreign companies, and enhance the attractiveness of investment by overseas multinational companies. Deepen and promote the construction of China's Shanghai Free Trade Zone and explore new ways and new models for reform and opening up. Efforts will be made to form a new all-round opening pattern linked by coastal, inland and border areas.

The second is to promote export upgrading and trade balance development from a strategic perspective. The total import and export volume in 2014 is expected to increase by about 7.5%. In order to create favorable conditions for achieving this goal, the government will maintain stable export policies, further improve the foreign trade promotion policy system, strengthen trade facilitation reforms such as customs clearance, and establish and improve a policy system that encourages the development of new formats such as cross-border e-commerce on a pilot basis. Wait.

The third is to enhance competitiveness in going out. The government has accelerated the reform of foreign investment management methods, improved financial, legal, consular and other service guarantees to provide convenience, guarantee and support for going global; on the other hand, the use of the Silk Road Economic Belt, the 21st Century Maritime Silk Road, Mengzhong, India, Myanmar and China The internationalization platform of the Greater China Region, such as the construction of the Pakistan Economic Corridor, will expand more space for cooperation and development.

The fourth is to coordinate multi-bilateral and regional open cooperation. China will continue to promote negotiations on service trade agreements, government procurement agreements, information technology agreements, and accelerate negotiations on new topics such as environmental protection and e-commerce. At the same time, it will actively participate in the construction of high-standard free trade zones and promote the negotiation of investment agreements between China and the United States and China and the EU. Accelerate the negotiation process with the free trade zone such as South Korea, Australia, and Gulf Cooperation Committee; persist in promoting trade and investment liberalization and facilitation, and enhance open soft power.

Prospects for the construction of a strong trade country

Historical practice has proved that China's open economy construction has embarked on a development path that is in line with the development trend of the world and is suitable for China's national conditions. In the new year, despite the uncertainties in the international economic environment, the global economic recovery is unlikely to rebound significantly. The domestic economy has significant downward pressure, and the foundation for maintaining sustained growth in foreign trade is not yet stable. However, the price level has stabilized, the power of reducing the burden of decentralization, trade facilitation and the effect of liberalization continue to show, and will provide many favorable conditions for realizing the expected target of foreign trade growth in 2014.

In the medium and long term, the new system of open economy will make positive progress, and the dividends and enterprise vitality of reform and opening up will be fully released; the transformation of foreign trade development mode, service industry opening, service outsourcing development, independent brand and innovation ability will be driven. It will also gradually emerge; China’s advantages in the country of human resources, the Silk Road Economic Belt and the 21st Century Maritime Silk Road, and other international channels, a mutually beneficial and win-win economic cooperation network, and rapidly increasing bilateral and multilateral trade and investment liberalization arrangements will Significantly accelerate the cultivation of China's new advantages in international competition and cooperation, and continuously inject new impetus into the long-term sustainable and healthy development of China's foreign trade.

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