(East-West Question) Ye Fujing: What are the new trends in China's institutional opening up?
China News Agency, Beijing, March 22, Question: Ye Fujing: What are the new trends in China's institutional opening up?
"China News Weekly" reporter Han Yong
Since the Central Economic Work Conference at the end of 2018, "institutional opening up" has been proposed for more than three years.
During this period, the RCEP reached an agreement and took effect in various countries one after another, and China applied to join the CPTPP. China's thinking and pattern of opening up to the outside world are undergoing some major changes.
The essence of this change is to shift from the previous focus on the flow of commodities and factors to the focus on benchmarking, revision, mutual learning, promotion, compatibility, and connection of rules.
The former focuses on "metaphysical", while the latter focuses on "metaphysical", and it has mutual causation with reforms in certain areas in China, which is an upgrade and reshaping of opening up.
To this end, China News Agency "East and West Questions" interviewed Ye Fujing, a researcher at the Institute of Foreign Economics of China's National Development and Reform Commission.
Institutional differences have become important constraints
China News Service reporter: How did the evolution of China's opening up move from the flow of commodities and factors to the current institutional opening? What is the logic behind this?
Ye Fujing:
There are two logics behind it: First, the two complement each other, promote each other, and advance in coordination, and cannot advance alone for a long time; second, times have changed, development conditions and needs have changed, and the focus must also be changed.
Commodity and factor flow-type opening refers to the opening of exports, imports, capital and other factors to bring in and go out, and focus on the commodity factors themselves, the material aspects of opening.
Institutional opening focuses on the level of rules and institutions. Simply put, it means actively benchmarking and connecting with international advanced economic and trade rules. On the basis of cleaning up domestic unreasonable and incompatible laws and regulations, it will further form the same rules as the general rules of international trade and investment. A coherent, standardized and transparent basic institutional system and supervision model.
In fact, it is a two-way integration, not only continuing to move closer to the international advanced and high-standard rules, but also promoting our own leading rules to the world, accepting tests, and turning them into international rules.
In July 2021, the China-Europe train loaded with goods departed from the Chengdu International Railway Port.
(UAV photo) Photo by China News Agency reporter Zhang Lang
Since the beginning of the reform, the opening of the flow of commodities and factors has been accompanied by the opening of the system.
The major aspects include the transformation from a planned economy to a market economy, and the minor aspects include systems such as tariffs, foreign trade management rights, utilization of foreign capital, and intellectual property protection that are in line with international standards.
Before and after "joining the WTO", we accelerated the pace of institutional opening up.
For example, with regard to the legalization of foreign-related economics, under the principles of non-discrimination, free trade and fair competition, China has focused on cleaning up laws and regulations and departmental rules and regulations, and has established and improved a foreign-related economic legal system such as trade promotion, trade remedies, and foreign capital utilization; In terms of further reduction of tariffs and non-tariff measures, according to the commitment, China will cancel all non-tariff measures such as import quotas, import licenses and specific bidding for products under 424 tariff lines since January 2005. Under the rules of the WTO, the license management of import-controlled products is implemented to ensure life safety and protect the environment; in terms of foreign investment access, foreign holdings or sole proprietorships are allowed in more fields to build a more open, convenient and fair investment environment.
Promoting the transition from commodity and factor flow-type opening to institutional-type opening does not mean that commodity and factor flow-type opening is no longer important, but only emphasizes the transformation and adjustment of opening modes and strategies.
Commodity and factor flow-based opening is still the foothold and basic destination of China’s opening up, and is still the main content and foundation of economic globalization; institutional opening still serves commodities and factor flow-type opening, and promotes the transformation and upgrading of commodity and factor-flow-type opening up. .
It cannot be institutionalized for the sake of institutional openness.
For a long time, the focus of China's opening to the outside world was "metaphysical", which was in line with the development needs at that time.
Now, the situation has undergone great changes: First, the national strength has increased, and the constraints such as the shortage of funds in the past have been eliminated or greatly alleviated; Second, the cross-border two-way flow of commodity factors has become the norm, and is no longer the main aspect of the contradiction; Third, commodities and factors The problem of incompatibility between institutional opening and institutional opening has become increasingly prominent; Fourth, institutional differences have become an important constraint on the development of commodity factor-based opening.
Normal economic and trade exchanges are often plagued by differences in rules and regulations, especially those after borders, resulting in economic and trade frictions, conflicts and trade wars. However, there is a vacuum and fragmentation trend in the corresponding economic and trade rules. It is urgent for China to actively intervene, seize the commanding heights, and act as the founder, contributor, coordinator and leader of the new rules.
In November 2021, visitors visit the special exhibition on the 20th anniversary of China's accession to the World Trade Organization at the National Exhibition and Convention Center (Shanghai).
Photo by China News Agency reporter Sheng Jiapeng
The interaction between opening and reform is more complex
China News Service reporter: What is the interaction between institutional opening up and domestic reform? What are the differences compared to the commodity and factor-based opening stages?
Ye Fujing:
Promoting reform through opening up is an important experience for us.
Regarding the issue of high-standard international economic and trade rules, it is itself a deep-water area for reform, and it is a "hard bone" for reform.
The most important aspects of institutional opening are state-owned enterprise rules, industrial policy and subsidy rules, digital trade rules, labor rules, competitive neutrality rules, intellectual property rights, and market economy orientation.
In these respects, China's corresponding current rules are quite different from the so-called high-standard international economic and trade rules. Some of them involve the red line or bottom line of the system, some are an important starting point for catching up with developed economies, and some are related to national security, and reform is very difficult. Big.
For example, there are huge differences in the development trend of subsidy rules in China and international rules, mainly in special subsidies, which are reflected in: first, the main body of the prohibition of subsidies is continuously expanded; the second is to expand the areas where subsidies are prohibited, from the fields related to trade in goods to trade in services. and foreign investment; the third is to expand the prohibited subsidy methods, and guarantees between state-owned enterprises are also prohibited; the fourth is to improve the transparency requirements and notification obligations of subsidies.
It can be seen that the interactive relationship between institutional opening and reform is different from the period of commodity and factor-based opening. First, institutional opening itself is a reform and is integrated into one; second, the interaction between the two is more difficult and complicated; third, Uncertainty about the opening of factor flow and the promotion of development depends on the path taken by such reforms and the resulting social shocks.
In December 2020, aerial photography of the fully automated terminal of Qingdao Port in the Qingdao area of Shandong Free Trade Zone.
(UAV photo) Photo by Zhang Jingang issued by China News Agency
"Institutional opening" should pay attention to the strategy
China News Service reporter: Next, to promote institutional opening, what are the main problems to be solved?
Ye Fujing:
First, it is necessary to classify policies and adopt different policies and strategies in the emerging fields of following, parallel, leading and chaos: in the field of follow-up, it is mainly to study earnestly and humbly learn from it; , learn from each other's strengths and complement each other's weaknesses; in the leading field, China's rules should be raised to international common rules; in emerging fields, we must actively intervene, seize the first opportunity, occupy the commanding heights, and enhance the right to speak and lead.
2. Continue to firmly defend the positive achievements of globalization and urge developed countries to reverse the trend of "five deviations".
Whether China's opening to the outside world can proceed smoothly depends to a large extent on whether the general trend of globalization continues to roll forward and whether the external environment is favorable.
At present, the trend of "five deviations" in developed countries is becoming more and more serious, that is, deviating from traditional pragmatic attitudes and practices, excessively embedding values and ideological factors in economic and trade relations, generalizing and polarizing politics and national security; deviating from their own advantages and the creed of free competition , engage in "race to the bottom" (RACE TO THE BOTTOM); deviate from the established line of structural reform, downplay self-innovation, self-examination, and the removal of obstacles to one's own development, and strengthen restrictions on the development of others; deviate from the principle of non-discrimination, openly in the internal market Tailor-made discriminatory regulations for Chinese-funded enterprises; deviate from the tradition of cautious words and deeds on China's internal affairs, and increasingly make irresponsible remarks and negative interpretations of China's economic and internal affairs that are not directly related to bilateral relations.
3. In the docking of international economic and trade rules, we must pay attention to the strategy.
In matters that are mainly unilateral by oneself, what to open, to what extent, the pace of opening, and the sequence of opening, should be independently grasped according to national conditions and their own development needs.
However, when it comes to the common rules of the game involving bilateral or multilateral interests, they must be accepted by everyone, reflect the demands of all parties, and pay attention to the balance of interests.
4. Further actively conform to the general trend of reform of international economic and trade rules.
At this stage, we should continue to benchmark high-level international economic and trade rules, because they are advanced, scientific, rational, and applicable, and they have undergone long-term testing in practice, and have become common international rules.
Furthermore, it is an effective way for us to influence and make corrections.
5. Correctly deal with several core issues of institutional opening, such as state-owned enterprise issues, subsidies and industrial policy issues, labor rules issues, digital trade issues, etc., and grasp the balance between openness and security, high-standard rules and pragmatic and gradual balance.
In fact, both the China-EU Investment Agreement and the application to join the CPTPP have provided us with good path guidance and direction signs for dealing with these sensitive issues.
Sixth, it is necessary to further dialectically and accurately look at the security issues in opening to the outside world, and make an appropriate distinction between market access and content supervision.
(over)
Interviewee Profile:
Ye Fujing, Ph.D. in Economics.
He is currently a researcher at the Foreign Economic Research Institute of the National Development and Reform Commission.
He has served as Deputy Director-level Economic Counselor, Director-level Economic Counselor, and Senior Economic Advisor of the Chinese Mission to the EU.