context: Responding to the changing paradigms of international trade prompted by geopolitical frictions and the reshuffling of global supply chains, Jiang Xiaojuan 江小涓 China Society of Industrial Economics president and former State Council deputy secretary-general urges the PRC to open up further and participate in the global division of labour. She notes that this is key for the PRC to acquire resources and know-how in some critical factors of production.
In the past, the PRC was usually thought of as only exchanging its massive market for tech, but participation in the global value and tech chains are more diversified and nuanced now, contends Jiang Xiaojuan 江小涓 China Society of Industrial Economics president and former State Council deputy secretary-general
- there is room for the PRC to exchange its market for foreign tech
- multinational enterprises cannot compete in the Chinese market without offering the best tech
- the PRC is rapidly exchanging its tech for external markets
- e.g. CATL partnership with Ford Motor Company to build an electric vehicle battery plant in Michigan (CATL offers tech and know-how while Ford provides the investment)
- the PRC has more leverage to exchange its high-end tech for other tech
- while PRC firms may not have the most advanced tech, they have a solid position in many cutting-edge industries
- the PRC is actively exchanging its tech with other countries to participate in the global division of labour in top-end industrial chains
- the amount of inflowing investment into the PRC and outflowing investment from the PRC are at similar levels
- the PRC's ability to engage in diverse partnerships in global tech cooperation is taking shape
Jiang suggests
- while the PRC has complete and massive industrial chains, it may not be in its best interests to manufacture most of the goods it needs
- this structure prevents the PRC from reaping the benefits of the global division of labour, which features
- economy of scale
- tech progression
- leveraging global resources and sharing the global markets
- this structure prevents the PRC from reaping the benefits of the global division of labour, which features
- the PRC needs to strike a balance between autonomy in innovation and global division of labour
- facing foreign oppression, the PRC must focus on making breakthroughs in cutting-edge tech areas to solidify independence, autonomy and self-reliance
- some cutting-edge technologies are now in the hands of an international oligopoly, making them more difficult to be introduced to the PRC
- but there are always two sides to this issue
- the PRC should leverage foreign tech whenever it can which can also promote the PRC's self-reliance and improvement in scitech
- the higher the level of PRC independent innovation, the more it can exchange its tech with other countries' tech to promote international tech cooperation
- the PRC should leverage foreign tech whenever it can which can also promote the PRC's self-reliance and improvement in scitech
- facing foreign oppression, the PRC must focus on making breakthroughs in cutting-edge tech areas to solidify independence, autonomy and self-reliance
- the PRC must further open up and participate in the global division of labour to boost development and reform