context: Xi Jinping stressed 'institutional opening' at the China International Import Expo in Nov 2022. The concept marks a departure from traditional trade policies that focus mainly on reducing tariff barriers. Instead, it places greater emphasis on opening non-tariff barriers and promoting greater openness in the areas of services, standards and rules. This approach recognises that in today's global economy, trade is not just about the movement of goods, but also about the flow of ideas, knowledge and technology. By prioritising institutional opening, promoters suggest China can create a more level playing field for its businesses and investors, and ensure that the benefits of globalisation are shared more broadly and equitably.
In the face of growing anti-globalisation sentiment and increasing unilateralism and protectionism, the traditional approach of opening up commodity and resource flows has become inadequate for meeting the demands of the current global landscape, says Wei Jianguo 魏建国 former vice-minister of commerce.
The broader institutional opening-up approach, which also includes labour, capital, technology and data, is now more effective in optimising the allocation of all production factors, he says. By creating a supportive regulatory framework that encourages competition, innovation and collaboration, institutions can help unlock the full potential of a country's resources and drive sustainable economic growth, he told a seminar on 'China's high-level opening to the outside world and construction as a trade power'.
Institutional opening can play a crucial role in promoting sustainable economic development, agrees Zhu Guangyao 朱光耀 former vice-minister of finance, noting that the shifting dynamics of great power politics require a new approach from China. According to him, the best way to address these challenges is to promote high-level opening-up and deepen integration with the global economy. This would involve leveraging the attractiveness of China's super-large market to the rest of the world, he says.
Two concrete actions are currently being pursued to promote institutional opening up, he says, noting China
- is actively seeking to join the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP)
- has started negotiations to join the Digital Economy Partnership Agreement (DEPA)
It is crucial to accelerate the development of a comprehensive top-level framework to enhance the overall systemic nature of institutional openness and ensure its success, says Zhao Ping 赵萍 CCPIT (China Council for the Promotion of International Trade) Academy vice-president. This can be achieved, she says, by establishing effective mechanisms to connect border and post-border systems, and developing high-standard economic and trade rules that support sustainable growth and development.
To effectively prevent economic security risks while expanding opening up, she says China should further establish and improve systems such as anti-monopoly reviews and unreliable entity lists, noting the 'provisions on the unreliable entity list' as a first step.