BRI NEWS Observer: Further opening-up helps China participate in global trade

BRI NEWS

Observer: Further opening-up helps China participate in global trade

By Dong Feng | People's Daily app

21:09, August 16, 2018

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The world is in the middle of continuous adjustment in the global and economic trading system. At each key node of adjustment, international competition is likely to intensify. China needs to keep this in mind when facing US government trade bullying. After all, China has gained the advantage by participating in the global trade. 

China has built a solid foundation in the manufacturing industry. Being the country with the most complete manufacturing system, China has maintained its title as the world’s largest manufacturing nation for nine consecutive years. 

The advantage is reflected in scale production, robust infrastructure support and a complete industrial support system, as well as continuously optimized labor factors.

The complexity of the industrial chain is critical for the long-term growth of a country's economy. 

China has also developed the capability in emerging industries. New technologies, including digitalization, intelligence and networking are trending to smart factories, communication among people, machines and markets, and production will be carried out in a networked manner. 

While achieving high-quality development, China is accelerating its transformation and upgrading to the high-end of the global value chain. 

China's population makes it possible to improve its labor factor. Second, its strong manufacturing base and experience in information technology have built a solid foundation.

The country’s independent innovation has accelerated in the past decade, with many industries picking up and becoming leaders. 

For instance, China unveiled a new-generation exascale supercomputer in May, and it will launch the first of a 300-satellite array in China’s global communications network this year. China also hosts enterprises with core technologies in the internet of things. 

With import tariffs on the rise in the United States, a recent blog of the Federal Reserve Bank of New York Liberty Street Economics said that US exports will also fall not only because of other countries’ retaliatory tariffs on US exports, but also because the costs for US firms producing goods for export will rise and make US exports less competitive. The result is likely to be lower imports and exports, with little or no improvement in the trade deficit.

We need to accept the fact that China has significantly increased productivity in areas with a comparative advantage. 

During the relatively open period of the global economic and trade system, China developed and forged the advantage in the whole industry chain.

In the framework of the Belt and Road initiative, China has enhanced the advantage in the traditional industrial chain. The global value chains dominated by developed countries are relatively long and complex with unified technical standards and a modular production system. 

The Belt and Road initiative offers more options for relatively short value chains (such as textiles and food) and relatively simple production to build regional value chains. 

China has also gained a competitive advantage in production and consumption. The global middle class is predicted to reach 4.9 billion in 2030, of which two-thirds will be based in Asia, most of which are in China.

More multinational companies are likely to develop businesses in China and new technologies might bring up new lifestyles. China's competitiveness will steadily increase.

In short, new technologies are gradually changing the global production paradigm. 

As a big consumer country, China will be favored by companies from all over the world, including the US. The country’s opening-up in the market will continue to help China participate in the global trade.

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