What new international trade proposals has China put forward?, Breaking the Old Order of Trade | Cooperation | International Trade
Since the reform and opening up, China has actively participated in the world trade division of labor system. In 2013, China's total import and export goods trade exceeded 4 trillion US dollars, surpassing the United States for the first time and becoming the world's largest goods trading country. Since then, this advantage has continued to expand. The rise of China is breaking the old trade order centered around the United States, and with this "rise in the east and fall in the west" trend, there has been a "China threat theory" in the international community. The United States, using the "China threat theory", unilaterally provoked a trade war with China and imposed comprehensive technological blockade and suppression on Chinese multinational enterprises.
As the world's largest trading entity and second largest economy in development, how should China get along with the world? When the old trade model is broken, what new international trade proposals has China put forward?
The old trade order of "winner takes all"
Since ancient times, trade has been crucial for a country's economy as a cross-border exchange of goods and services. The importance of trade lies in its role as a lever for a country's economy. Even small countries with extreme constraints on natural resources can break through local resource constraints and increase the scale of input and output through trade. Throughout history, superpowers have always been trading powers.
Looking back at modern history, Britain's ability to become an empire that never sets in the 19th century was largely maintained through trade. The Industrial Revolution in Britain replaced manual labor with machine production, resulting in a significant increase in production efficiency. However, from the perspective of production inputs, the resources of the British Isles are clearly unable to meet the raw material needs for sustained large-scale production; In terms of output, the market size of the British Isles is also much smaller than the local industrial production. The secret to Britain's wealth is global trade based on the "suzerain colony" model. In the Great Discovery of Navigation, Britain expanded its colonies to the Americas, North Africa, and South Asia. Through the political control of the colonial powers, it achieved the supply of cheap raw materials on a global scale. On the other hand, the products produced supplied the world, solving sales problems and completing the transformation of products into wealth. Wealth continued to flow back to Britain, providing economic support for Britain's global hegemony.
After World War II, the United States gradually became the dominant superpower and also the world's largest trading power. The anti colonial movement led to the independence of former colonial countries, and the previous "suzerain colony" model could not continue. Instead, it was replaced by global trade operating under the US dollar monetary system. Under this model, the United States obtains seigniorage through the United States dollar. Developing countries obtain US dollar assets by selling primary commodities and raw materials, while also investing the earned US dollars in the US capital market, which is equivalent to capital flowing back to the US, supporting the development of American enterprises. On the other hand, technological differences have formed a division of labor between the high-end and low-end industrial chains of the United States and developing countries, and the profit gap has kept the United States at the top of the global trade value chain. In the 1980s, Japan challenged the absolute hegemonic position of the United States in the field of trade, occupying a surplus advantage in the automobile trade between the two countries. The United States signed the Hiroshima Agreement with Japan under the pretext of resolving the trade deficit between the two countries, forcing the yen to appreciate, resulting in a significant increase in the cost of Japan's manufacturing industry. The competitiveness of the Japanese economy turned from prosperity to decline, entering a "lost twenty year".
From the above history, we can see that whether it is the "suzerain colony" model or the "dollar hegemony" model, trade rules are formulated by superpowers, following the logic of "winner takes all" and containing unfair welfare distribution. The value gain gained from improving production efficiency through global division of labor mostly flows to superpowers under existing trade rules, continuously consolidating their central position in the trading system over the years.
The Chinese proposition of "win-win cooperation"
Since the 20th National Congress of the Communist Party of China, our party has developed a systematic economic theory and provided Chinese answers to the world's questions. The most important thing is that under the concept of a community with a shared future for mankind, we have put forward the idea of "win-win cooperation" and shared the achievements of China's reform and opening up with the world. The key to the deepening of economic globalization in the past few decades lies in the fact that collaborative division of labor can improve production efficiency, which has become a consensus among countries around the world. In recent years, the trend of anti globalization has surged, and the key lies in the problem of "cake distribution". The current trade rules are the source of uneven wealth distribution. In contrast, China's proposed "win-win cooperation" ideology aims to break the old order, abandon the logic of "zero sum game", advocate for multiple wins, and is willing to share China's achievements in reform and opening up with the world. For the first time, the responsibility of a trading power has been placed in a prominent position.
The "the Belt and Road" initiative is a concrete action of "China's proposition". By leveraging China's advantages in the field of infrastructure, we can help countries along the Belt and Road build more infrastructure, connect the China Europe trade corridor, strengthen trade cooperation between countries along the Belt and Road, reduce trade barriers, promote smooth trade, and enhance trade scale and efficiency. We are willing to invest first and yield more profits. The key lies in our big account. We not only drive the development of central and western China through the "the Belt and Road" construction, narrow the economic gap between eastern and western regions, but also give other countries the opportunity to share China's development. This is a typical practical demonstration of "win-win cooperation".
The commitment to deepening reform is a response to rumors of unfair competition. We adopt a market economy approach to enhance industrial competitiveness, taking a series of measures such as optimizing the business environment, promoting market-oriented reforms, strengthening the rule of law, and reforming the administrative management system. Our aim is to improve resource allocation efficiency and enhance innovation capabilities by stimulating market vitality. In addition, China is committed to opening up its market to the outside world, and it is a higher quality opening up to the outside world. Firstly, further expand market access. We promise to lower market access barriers, relax restrictions on foreign investment access, provide a more fair, transparent, and predictable market environment, and attract more foreign investors to enter the Chinese market. Secondly, strengthen intellectual property protection. Continuously improve the legal and regulatory system related to intellectual property, and enhance the legal effectiveness and enforceability of intellectual property protection. Strengthen law enforcement efforts and capabilities, increase crackdowns on intellectual property infringement, and protect the core interests of multinational enterprises.
The theory of dual circulation in domestic and international markets answers the world's concerns about China's overcapacity and exports to the world. China is the largest developing country, and there are still significant regional development differences within the country. In the domestic market cycle, it is encouraged to expand household consumption, improve consumption capacity and level, promote domestic demand growth, and meet the growing needs of the people for a better life. Relying on the huge potential of the central and western markets, China's production capacity has a place to go. In the international market cycle, encourage enterprises to actively participate in global competition, strengthen international trade cooperation, and improve export competitiveness. At the same time, encourage enterprises to explore new international markets, promote the internationalization of Chinese products and services, and enhance China's position in the global value chain. Chinese enterprises abide by international rules and participate in international competition through a market economy.
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