Virtuous circle

China has entered a stage of high-quality development, which necessitates deeper reform and greater opening-up. The Central Economic Work Conference, in particular, emphasized China's opening-up path and process, and the country's need to take the initiative to meet the high standards of international economic and trade rules.

China first needs to build a sound external environment to ensure macroeconomic stability. Ensuring stable economic development is therefore a priority for China in 2022. Trade agreements are an important mechanism to promote the stable development of bilateral relations and build a sound external environment, and stable foreign trade and foreign investment expectations can be realized to a certain extent through the signing of multilateral trade agreements and regional trade agreements.

In 2021, for instance, the bilateral trade between China and the United States maintained a high growth rate. Through the analysis of data, it can be seen that the first-phase trade agreement signed between the two countries has played a stabilizing role in the development of their trade relations. The stable economic and trade development of China, Southeast Asia and many countries involved in the Belt and Road Initiative has also benefited from the China-ASEAN Free Trade Agreement and Asia-Pacific Trade Agreement, which have provided important policy support to help maintain the stability of the industrial supply chains.

One important development in 2022 will be the implementation of the Regional Comprehensive Economic Partnership agreement, which came into effect on Jan 1.China has also officially submitted its application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Digital Economy Partnership Agreement. But China's active participation in building economic and trade rules includes not only regional trade agreements, but also advancing negotiations on relevant rules at the multilateral level of the World Trade Organization.

Through institution-based opening-up, China can improve its market system and stimulate the vitality of market players. With the practice of opening-up and innovation from the inside out and from the bottom up, the goal of continuously stimulating the vitality of market players can be realized through the macro policies proposed at the Central Economic Work Conference. At the same time, we should make sure that the interests and demands of Chinese enterprises can be met when international economic and trade rules undergo restructuring.

On its part, China will work to ensure national treatment for foreign-invested enterprises, shorten the negative list for foreign investment access, expand the opening of service sectors such as telecommunications and healthcare in an orderly manner, revise and expand the Catalogue of Industries to Encourage Foreign Investment, and introduce a negative list for cross-border service trade in pilot free trade zones. China will also seek to attract more investment from multinational companies and speed up the implementation of major foreign investment projects while promoting high-quality cooperation under the framework of the Belt and Road Initiative.

International trade rules include rules for business facilitation. There are some important rules and provisions about State-owned enterprises reform in the CPTPP that China is seeking to join. The target of China's SOE reform in 2022 is to realize a three-year action plan and steadily promote the reform of monopoly industries such as the power grid and the railways. In the reform process, it is necessary to increase transparency, standardize commercial assistance, and combine international standards with China's own reforms to better boost the economic vitality of all Chinese SOEs.

China will also strengthen rule-making for the development of the digital economy and promote rules related to fair competition. The maintenance of relevant rules on intellectual property rights protection will help promote economic innovation and an innovative economy.

At present, China has formed its own advantages in the process of institutional innovation in each pilot free trade zone where it is necessary to carry out policy coordination and cooperative innovation to smooth the domestic circulation, such as the unification of some standard rules, which is an important guarantee to promote the national economic circulation through institutional innovation.

In the field of global climate change, the establishment of climate change rules related to international trade has been accelerated, such as the carbon boundary regulation mechanism proposed in Europe. This has put some external pressure on China, but it is also an important opportunity for China's economic and industrial transformation and development. China will participate in the establishment of rules for promoting green development. In the process, China will promote the high-quality growth of its economy through the scaling-up of its carbon market and the development of a domestic carbon tax, while paying attention to the interests of developing countries in the negotiations for rules, grasping the law of historical development, and building an international rule system for inclusive development.

This reflects that China has evolved from learning and obeying international rules to actively participating in the construction of international economic and trade rules in the process of conforming to international rules. High-level opening-up is an important driving force to promote deep-level reform, and taking the initiative to adopt high-level international economic and trade rules is an important path for China to carry out high-level opening-up.

The author is director of the Department of International Trade of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn