China’s Premier Li Keqiang’s wrote an article on China’s economy, “Economic Openness Serves Everyone Better,” which was published on January 25 in Bloomberg Business Weekly. Li pointed out that, “We are opening new sectors of the economy to investment and widening access to many others.” The article was also published in full on the State Council’s official web site.
Li noted that the government is opting for a lighter, more balanced touch while engaging the market. He pointed out that, “We are piloting a ‘negative list’ model before a nationwide rollout, where investment access is assumed unless specifically restricted.”
Acknowledging that globalization has stood China in good stead, Li concluded with continued support for reform, openness, and free trade.
Caixin, China’s leading provider of business and financial news, published an editorial earlier in the week offering its take on potential trade protectionism. In the editorial, Caixin‘s editor-in-chief, Hu Shuli, attributed China’s rapid rise to its opening up.
Information that Hu mentioned in the editorial included that, within a decade since its accession to the World Trade Organization in 2001, China had become the world’s largest trader. The value of its foreign trade rose from only 0.92 percent of the world’s trade in 1980 to 13.8 percent in 2015. Today, China has become a major international investor, with direct outbound investment reaching $200 billion in 2016. According to Xi Jinping, China’s President, a total of $750 billion in overseas investment is expected over the next five years.
The editorial cited Xi’s statement made earlier this month at the World Economic Forum in Davos, Switzerland, that “China will keep its doors wide open and will not close them. An open door allows both for other countries to access the Chinese market and for China itself to integrate with the world.”
In the editorial, Hu reviewed a new directive that the State Council issued in mid-January, which offers foreign investors greater access to several key sectors, including services, manufacturing, and mining. The government eased restrictions on overseas capital flowing into various types of financial institutions and it further liberalized emerging sectors such as telecommunications, the internet, culture, and education.
Hu considered this a bold move, signaling continued efforts to build an open economic system in China and to help rebalance the books with its global trading partners.
Hu also took care to make the point that opening wider to the outside world should not be seen as bowing down to external pressure. It is a prudent choice that will help China achieve its own growth targets because introducing more competition will improve business efficiency, while benefiting consumers and other stakeholders.
Sources: BloombergBusinessweek, January 25, 2017
China’s government web portal, January 26, 2017
Caixin, January 22, 2017