“Institutional opening up shows that we firmly promote trade liberalization and facilitation is a long-term strategy. China’s new development is also a new opportunity for the development of all countries in the world.” Jiang Xiaojuan, vice chairman and president of the Chinese Society of Administrative Management, said at the “Caijing” Annual Conference 2023: Forecast and Strategy co-sponsored by Caijing magazine, Caijing.com, Caijing think tank, and Caitonghui.
Jiang Xiaojuan mentioned that our years of opening up have not only supported growth, but also promoted structural adjustment and technological progress. Promoting reform through opening up is also a very important experience in the past 40 years. Therefore, at the Central Economic Work Conference this time, the content on opening up deserves everyone’s high attention, and it is also very important to enhance the confidence of the society.
Focusing on the requirements of the Central Economic Work Conference, she shared three points: first, there are challenges in the international environment, but in fact there are more opportunities, and greater efforts should be made to seize opportunities; second, the smooth and efficient domestic circulation requires active and effective use of both three kinds of resources and two markets; thirdly, we must promote the smooth flow of the double cycle through institutional opening-up.
Jiang Xiaojuan believes that after 40 years of policy-based opening-up, we are now qualified to turn to institutional-based opening-up in terms of domestic industrial competitiveness, the current demand for domestic and international markets, and the improvement of the domestic market economic system. Institutional and open tools such as rules, regulations, and management standards are relatively stable and fixed, and its greatest feature is a stable and predictable open system. It is very important to enhance the confidence of domestic and foreign market players in the long-term development of the Chinese market.
The following is the transcript of the speech:
Jiang Xiaojuan: Distinguished guests and friends present, good morning! I am very happy to be invited to participate in this event of Caijing. Caijing’s activities are very time-sensitive every year, and this year’s time is also very good. Yesterday’s economic work conference just concluded, and it was issued to revitalize the economy and restore normal production and life. strong voice.
Today I would like to share with you that one of the most emphasized parts of the economic work conference is to expand high-level opening-up. The topic I shared is “High-level opening-up helps economic recovery and medium- and long-term growth”.
This year’s economic work conference made a comprehensive deployment of economic work next year and in the future. A prominent focus of the conference was the special emphasis on high-level opening up, dual cycles, foreign trade, and the use of foreign capital.
We can see the important reference and spirit of the conference announcement related to openness. It is mentioned in the communiqué that we must adhere to a high level of opening up to the outside world, steadily expand institutional openings such as regulations, rules, management standards, and better coordinate domestic and international cycles, and build a new development pattern around the construction of a new development pattern to enhance the endogenous power and reliability of the domestic cycle. To improve the quality and level of the international cycle, we must continue to play the role of exports in supporting the economy, actively expand the import of advanced technology, important equipment, energy, resources and other products, we must make greater efforts to attract and utilize foreign capital, and promote high-level opening up. To improve the quality and level of international trade and investment cooperation, it is necessary to expand market access, increase the opening up of the modern service industry, implement national treatment for foreign-funded enterprises, ensure that foreign-funded enterprises participate in government procurement bidding standards on an equal basis in accordance with the law, and actively promote participation in the comprehensive and Improve high-standard economic and trade agreements such as the Trans-Pacific Partnership Agreement and the Digital Economic Partnership Agreement, actively compare relevant rules, regulations and management standards, and deepen reforms in related domestic fields.
The meeting communiqué is not long, but there are many essential and deep-seated requirements for openness. The first is to promote high-level opening up, coordinate the domestic and international cycles, improve the quality and level of the international cycle, continue to play the role of exports in supporting the economy, and actively expand the import of advanced technology, important equipment, energy resources and other products. This is about foreign trade.
The section on foreign investment is the longest. Briefly speaking, it is about equal access, liberalization, open competition, and legal protection in accordance with the law. It also mentioned that we need to expand institutional opening-up, and deepen reforms in related domestic fields in accordance with relevant rules, regulations, management and standards.
Everyone knows that our years of opening up have not only supported growth, but also promoted structural adjustment and technological progress. Promoting reform through opening up is also a very important experience in the past 40 years. Therefore, at this economic work conference, the content on opening up deserves everyone’s high attention, and it is also very important to enhance the confidence of the society.
Regarding the requirements of the Economic Work Conference, I would like to share with you three points, mainly to boost confidence and see if the international environment can bring new opportunities. First, there are challenges in the international environment, but there are actually more opportunities, so we should make greater efforts to seize the opportunities; second, the smooth and efficient domestic circulation requires active and effective use of two resources and two markets; Openness promotes the smooth flow of double circulation.
There are many challenges in the international environment, especially in recent years, there are naturally generated challenges, such as the epidemic, which will definitely bring about fluctuations in production, stagnation of transactions, and many problems. There are also man-made challenges. Some countries have made many unreasonable and unreasonable actions on international trade rules and international trade governance, which have brought man-made external challenges. However, the driving factors of economic globalization are by no means unshakable by actions at these levels. The fundamentals of its driving force are very broad and very strong.
Even in the face of so many natural and man-made challenges, globalization is still accelerating, and international trade and investment are still very important forces driving global economic growth. Therefore, the more we face challenges, the more we must make greater efforts to seize the opportunities that still exist.
Opportunities still exist amid challenges. Although we have seen a lot of problems on the point, on the surface, international trade is still an important force leading the recovery of China and the global economy. According to the data of the last three years, the growth rate of imports and exports and the utilization of foreign capital, especially the growth rate of exports and utilization of foreign capital is significantly higher than the growth rate of GDP, and higher than the domestic demand brought by two domestic consumption demands and investment.
During the three-year epidemic, there were problems in all indicators, but the performance was relatively good. In fact, it was the part of our relationship with the external economy, that is, our import, export and foreign investment. Foreign trade and the use of foreign capital are still very important forces to support China’s economy during the epidemic and post-epidemic economic recovery.
This is not only the case of China, the growth rate of global international trade is more than twice that of GDP. Even if it is adjusted to comparable data, that is, the GDP growth rate is adjusted from the constant price to the current price, it is 40% to 50% higher, and the United States is 40% higher. Therefore, no matter from China’s domestic data, from the perspective of the United States, or from a global perspective, international trade is a very important force leading the recovery of China and the global economy. Be confident, you must see the challenges on the spot, and you must also see the opportunities on the surface; you must see some stagnation, and you must see that the mainstream continues to move forward. These stagnation must be paid attention to and breakthroughs must be made, but points, lines, and planes must be distinguished.
If you don’t see the opportunities brought by globalization, you may stop, give up your efforts, or even jump off the train yourself. This is unnecessary. We must see that the trend of globalization is still unstoppable The world is moving forward, and we must make good use of such an opportunity.
There are still many new forces driving globalization. Globalization continues to move forward despite many obstacles. We pick a more important force, which is digital technology. In this economic work conference, the emphasis on the digital economy is also a very important feature, and the positive support for the development of digital platforms is also a very prominent feature.
The traditional top 100 multinational companies in the world have experienced very flat growth in the past three years, but the top 100 digital multinational platforms have shown faster growth in the past three years. Regardless of the proportion of foreign sales, the proportion of foreign assets, or the profit level and net profit margin of the entire enterprise, they have been rising at a high speed.
This is because the cross-border connection cost of digital technology is very low. It matches a large number of parties on the platform. With low-cost matching ability, it uses digital smart technology to promote the smooth flow of small and large quantities of logistics, etc., which is especially suitable for long-distance transactions. In particular, various service transactions on digital platforms are basically indifferent to consumers who are far away or close at hand. During the epidemic, digital technology supports the development of this area faster.
Take a look at the proportion of digital-driven service trade in service trade. Since 2012, this part has begun to increase in volume, and it still maintains a good growth momentum during the epidemic. By 2020, digital-driven service trade will account for more than 55% of service trade, which is growing very fast, and the growth of this part has not stopped during the epidemic.
Service trade is divided into two categories, one is the cross-border flow of people and goods. For example, tourism services, transportation services, etc., have been hit hard in the middle of the epidemic. But at the same time, we have trade related to the digital space and the platform space, outsourcing, software, producer services, etc. are growing very fast.
We all know that the epidemic has a great impact on the industrial chain, and there may be a sudden break on both the supply side and the demand side. On the digital platform, it is very efficient for the Industrial Internet to complement the chain of online companies. During the most difficult time of the epidemic, Haier’s platform can replenish links for more than 2,000 companies every day, or seek new suppliers or new markets.
But at the same time, we must see that digital technology is a new technology, and many traditional industrial chains have been impacted not by the epidemic, but by the emergence of new chains. I think with the recovery after the epidemic, we must attach great importance to the restructuring and reorganization of the industrial chain caused by digital technology. Some impacts are inevitable. The newly combined industrial chain under digital technology will definitely impact the original industrial chain. . Don’t attribute all the problems to the impact of the epidemic, and look forward to linking the old ones. Many reorganizations and reconstructions may be inevitable.
For example, there is a company called Orange Cloud, which is not very big in China. This company is located in Yantai. It has been working hard for one thing in the past few years. It is to establish a digital design and development platform to integrate the most advanced design and development at home and abroad All the software is gathered on the platform. This platform now puts 310,000 engineers and technicians from 17 countries on the platform, because it is a professional research and development institution that constantly receives orders and is a new product issued by small and medium-sized enterprises. Product and new process design requirements. The project manager knows how to set up a R&D team, releases the project on the platform and builds a team for each design task. It is conceivable that not only many small and medium-sized enterprises do not have their own research and development capabilities, but even large enterprises cannot have such a large research and development team, and it is impossible to have such subdivided research and development professionals. For each task, select the most suitable R&D institutions and R&D personnel, and even decompose a R&D task into different parts, do them separately and then assemble them into products. I often say that R&D has changed from a series process to a parallel process, and a highly efficient professional team has been formed from subdivided R&D tasks.
With the support of digital technology in the future, all producer services that can be done in cyberspace will change in this direction. In short, new technologies will bring about the emergence of new industrial combinations, which will bring relatively rapid and large-scale impacts, reconstructions, and reorganizations. If you understand the situation in place, you must see the general trend and be prepared to avoid being passive when the impact comes. .
Give another example. How to provide long-distance after-sales service when personnel are blocked during the epidemic? We have a lot of equipment that is far away. For example, Sany Group, a construction machinery company, sells its equipment to 70 or 80 countries. Some equipment of this kind will lose a lot of money after it stops. The business owners are very worried. Hope to have the ability of prompt after-sales service. Now that the travel of personnel is blocked, the remote after-sales service platform has played a very important role. On-site personnel can use the information provided on the equipment, plus a lot of 5G equipment, to make an all-round and detailed description of the fault on the spot. Through the 5G network and without The professional engineering and technical personnel who arrive at the site can connect to remotely guide the repair and maintenance of the equipment. This method has developed rapidly during the two years of the epidemic. After the epidemic, some on-site services may be restored, but some of them will definitely be replaced by more efficient and timely remote digital services developed during the epidemic. This is the formation of a new form of globalization. The latter part must have sufficient understanding and attention.
Second, let me talk about the smooth and efficient domestic circulation that requires active and effective use of two resources and two markets. The economic work conference mentioned that we should continue to play the role of export in supporting the economy and continue to introduce advanced technology, advanced equipment and energy resources. These two sentences generally point out that the smooth and efficient domestic circulation still needs to utilize two kinds of resources and two markets.
The 20th National Congress of the Communist Party of China proposed Chinese-style modernization, the first of which is modernization with a huge population. Modernization with a huge population has both advantages and pressures. The advantage is the advantage of a large-scale economy, and the pressure is the pressure of resource and environmental constraints. To play the advantages and resolve the pressure requires a smooth external circulation.
Generally speaking, China is an economy with a shortage of resources. Before 20, 30, and 40 years ago, we were not under great pressure. When GDP accounted for 2%, 4% and 6% of the world at that time, we did not feel that we were in short supply of land, fresh water and oil and gas resources, which accounted for 7%, 6% and 3% of the world, because the economic aggregate was small at that time. With the increase of economic aggregate, the shortage of natural resources is relatively more obvious. Our current GDP accounts for 18% of the world, our investment accounts for 25% of the world, but the most important resource is natural endowment, there is no way to grow with economic growth, our land, fresh water, natural gas, oil, cannot be compared with Our economic aggregate, the aggregate amount of our future investment, and the demand for energy in the people’s desire for a better life match. This constraint will exist until there is a fundamental change in energy technology. We need to improve the energy structure, use more clean coal technology to generate electricity, and use more wind and solar energy, etc., but this will take a long time, and there are boundaries and bottom lines for the mutual substitution of different energy sources, otherwise the high cost may lose competitiveness. On the whole, many resource constraints will exist for a long time.
We have emphasized that we have been reducing our dependence on imported resources for many years. However, with the rapid economic growth and the increasing demand for diversified energy sources in people’s lives, the import of many resources such as oil continues to rise. It’s not that we don’t pay attention to it, but we attach great importance to it, but many factors determine that imports are still rising, and the degree of import dependence is still rising. We are still adjusting our energy structure, but in the long run, our import demand for natural resources is unavoidable, including arable land that can be used to grow food and many things. We meet domestic demand for land with 7% of arable land, which is definitely a kind of tense situation. Therefore, it is still necessary to strive to import land- and freshwater-intensive commodities, food, and many resource products to ensure the improvement of our production efficiency and living standards, as well as international competitiveness.
We talk about the advantages of large-scale economies. With the efforts of both the domestic market and the government, some particularly advantageous industries have been formed. However, these industries need the global market to make full use of production capacity and fully utilize the ability formed by the large investment in the early stage. We now account for 50% of global production of electric vehicles, and our market share has increased in the first three quarters of this year. This is an advantageous industry that we have grown on the new track. Now that exports have begun to increase, we need to expand our advantages in the global market.
Our photovoltaic module production accounts for 78% of the world‘s total production, and has been exported in large quantities. To continue to expand the industry we already have advantages in, we need a larger global market. Other foreign economies that compete with us have always maintained a high degree of vigilance against the export of our new products. Therefore, we often say that China now needs a free and fair global trade environment. The smooth and efficient domestic circulation requires the effective use of two resources and two markets.
The third part is the institutional openness emphasized by the Economic Work Conference. I have been studying the issue of openness for a long time. People often ask, what is the meaning of institutional openness?
My learning experience is that institutional opening corresponds to policy opening over the past many years. In the past 40 years, we have continuously adjusted policies, starting from a small number of industries and slowly increasing the proportion of industrial opening. Starting from a special zone, it will expand to coastal areas, riverside areas, border areas, central and western regions, and northeastern regions. We are constantly adjusting our open policy according to the domestic economic conditions, industrial competitiveness, and regional development requirements.
The advantage of this method is that in the case of weak domestic industrial competitiveness and an imperfect market economic system, opening up is a gradual opening up in small steps, which will not suddenly have a serious impact on the country. Investors and operators at home and abroad have brought long-term expectations that are not stable enough. After 40 years of policy-based opening-up, from the perspective of domestic industrial competitiveness, from the current understanding of the international market, and from the improvement of the domestic market economic system, we now have the conditions to turn to an institutional-type opening-up. Institutional and open tools such as rules, regulations, and management standards are relatively stable and stereotyped, and its greatest feature is a transparent, stable, and predictable open system. It is very important to strengthen the confidence of domestic and foreign market players in the long-term development of the Chinese market.
Under the system of institutional opening, various systems are clear and transparent, so the market may play a more important role in the allocation of cross-border resources, export and import of foreign capital and foreign investment, etc., from the perspective of industry Speaking of being more policy-neutral, this is an inevitable choice for China to enter a new stage of development. When we first opened up, the competitiveness of the domestic industry was very poor, and we dared not let go of imports. At that time, we rewarded exports and restricted imports. my country’s development has reached the current level, expanding the market through exports, gaining the benefits of economies of scale and division of labor, and through exports. It is equally important to import and introduce various resources and to improve the technical level and competitiveness of domestic industries; the capital, technology, advanced products, management experience, etc. And technology acquisition, etc., both are equally important. Market allocation of resources can improve overall industrial efficiency and competitiveness, and achieve high-quality internal and external circulation.
Finally, I would like to emphasize one more point. The report of the 20th National Congress of the Communist Party of China stated that we should use China’s new development to provide new opportunities for the world. China has indeed become a global power. Many traditional important indicators have reached 10-20%, and many emerging important indicators have reached more than one-third. Therefore, changes in our imports are changes in the “international environment” of the exporting country; changes in our imports are changes in the “international environment” of the importing country. In other words, we are the shapers and contributors of the international environment, not just passive recipients. We create a stable, transparent and predictable open environment that allows the market to function better, and provide new opportunities for the world. Openness shows that our firm promotion of trade liberalization and facilitation is a long-term strategy, and China’s new development is also a new opportunity for the development of all countries in the world.
That’s about all I have to share with you today, and I mainly want to boost my confidence. There are many favorable conditions for development in our country, and we are motivated by ourselves. There is no need to be pessimistic about the international environment. The original driving force of globalization still exists, and new driving forces are joining in.
The concluding remarks are: two kinds of resources and two markets are needed for a smooth domestic cycle, and promoting the mutual promotion of the two resources is an inherent requirement for high-quality development, and it is also the inherent and goal of high-level opening up. That’s all I have to share, thank you!