Economic conference shows free trade determination

Although 2023 is the first year fully free of COVID-19 prevention and control measures worldwide, global economic growth has not been as good as last year's. Worse, the growth rate is expected to further decline next year.

A round of strong monetary tightening by Western central banks led by the US Federal Reserve's interest rate hikes that started in March 2022, instead of "suppressing inflation", has not only caused consumer prices to rise and worsened people's living conditions in Western countries, but also further weakened the foundation of their manufacturing sectors, creating risks across the financial, real estate and debt markets.

In particular, the ballooning of the US government's deficit, and debt service and interest could endanger the foundation of the entire international financial system.

Under the pressure of such a volatile economic environment and high recession risk, the lingering Russia-Ukraine and Palestine-Israel conflicts have further dimmed the prospects of the global economy. What is more worrying is the huge uncertainties over three major elections — the European Parliament and United States presidential elections next year, and the United Kingdom general election in January 2025 — may have a profound impact on the international trade and the global economy.

In the face of such a global economic, political and security environment, the eyes of the world are once again focused on China. As the world's second-largest economy, largest industrial manufacturer and exporter, and a leading importer with sustained growth, China makes the highest contribution, about 30 percent, to global economic growth, and together with the US it has contributed about 50 percent to global growth in this century. All this means China's policies can have a huge impact on the stability and vitality of international trade and the global economy.

The just-concluded Central Economic Work Conference sets the tone for next year's economic policy, stresses the need for China to comprehensively deepen reform, expand high-level opening-up and consolidate the fundamentals of foreign trade and investment. It also requires the country to lead the construction of a modern industrial system driven by scientific and technological innovations, and to boost the resilience of the industry and supply chains.

The series of policies China has adopted in recent years and the measures it has taken before and after the CEWC have made it clear that the country is not only determined to further expand opening-up and build a high-quality open economy but also making unremitting efforts to that end. Such policies include promoting high-level institutional opening-up of the China (Shanghai) Pilot Free Trade Zone by integrating it with international economic and trade rules, holding the 24th China-EU Summit, signing the protocol to further upgrade the China-Singapore Free Trade Agreement and adopting a visa-free policy for the nationals of several countries under certain conditions.

In fact, China has been playing an increasingly important role as the standard-bearer of global free trade, which is conducive to both China's national and global economic development.

It should be noted that the Shanghai free trade zone plan initially approved by the State Council in 2013 was only a "pilot plan". Similar "pilot plans" were later initiated in other regions across the country, and now many measures being promoted have the highest degree of openness, including many emerging but highly advanced financial instruments.

However, while China has been taking measures to deepen reform, some US lawmakers are claiming Chinese garlic poses a "threat" to US national security and the US government has signed an agreement with Mexico to specifically review foreign investments involving Chinese companies.

This shows the stark contrast between the trade policies and decisions of China and the US. For example, a few days after US President Joe Biden officially signed a bill banning all imports from China's Xinjiang Uygur autonomous region based on so-called forced labor being used in the region on Dec 23, 2021, the Regional Comprehensive Economic Partnership which China made unremitting efforts to finalize took effect (on Jan 1, 2022), signaling the establishment of the world's largest free trade area.

Moreover, the "small yard, high fence" policy that seriously obstructs free trade and the building of an open global economy has spread from the US to other Western countries, from the UK and Germany to France, Italy and other EU countries.

Openness brings progress, while seclusion leaves a country behind. Also, China will not close its door to the outside world. Instead, it will open even wider, just as the country's leader has stressed. China has not declared itself to be the standard-bearer of global free trade, but its actions have actually put it in such a position.

The author is a researcher at the Chinese Academy of International Trade and Economic Cooperation. The views don't necessarily reflect those of China Daily.

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