Consistent opening-up endeavors, alongside steady economic growth over the past decade, have made China a sought-after destination for global investors.
The 20th National Congress of the Communist Party of China (CPC) provides a new opportunity for China's high-level opening-up to the outside world. In the report of the 20th CPC National Congress, the word "opening-up" was mentioned as many as 29 times, and the report emphasizes promoting high-standard opening up and high-quality development of the Belt and Road Initiative (BRI).
For foreign investors, new opportunities are coming from China's efforts to steadily expand institutional opening-up based on rules, regulations, management and standards.
With a shorter negative list for foreign investment, the landmark Foreign Investment Law, and the first negative list for cross-border services trade in Hainan province, China has been offering institutional dividends to expand development room for foreign enterprises and share its super-sized markets.
After a decade of opening-up endeavors, China has seen increased foreign investment utilization, improved legal protection, enhanced market access for foreign capital and a more level playing field.
In recent years, China has taken the initiative to set up multiple platforms for global businesses to gather together and tap into one of the world's largest markets. Despite COVID-19 disruptions, the country has organized the China International Import Expo, the China International Fair for Trade in Services, and the China International Consumer Products Expo, providing platforms for trade and exchanges.
Global investors have cast a vote of confidence in China by betting bigger. Official data show that foreign direct investment into the Chinese mainland, in actual use, expanded eight percent year on year to 189.13 billion U.S. dollars in 2022.
On Dec 20, 2022, the six cities of Shenyang, Nanjing, Hangzhou, Wuhan, Guangzhou, and Chengdu were selected as comprehensive pilot centers for expanding the opening-up of the services industry. Before that, the centers serving that purpose were Beijing, Tianjin, Shanghai, Chongqing and Hainan province. The newly-designated six cities will broaden market access, reform regulations and improve market environment in the services industry to increase market openness, improve the regulatory environment and enhance the business climate.
In addition, China will continue to widen opening-up and guide foreign companies to invest in key areas such as advanced manufacturing, modern services and energy conservation in its market in 2023, according to the Ministry of Commerce.
Foreign trade has been an important indicator of the country's opening-up level. Thanks to favorable trade policies, China's annual foreign trade hit a record high in 2022, with total goods trade reaching 42.07 trillion yuan ($6.23 trillion), up 7.7 percent yearly. That metric has topped the world for six consecutive years.
China has become a significant trading partner for more than 140 countries and regions. In particular, its imports and exports with ASEAN, the EU and the United States gained 15 percent, 5.6 percent and 3.7 percent, respectively, in 2022. Trade with Belt and Road countries accounted for 32.9 percent of its total foreign trade.
As an upholder of free trade, the country has also been working to reduce trade barriers with more partners, with 21 pilot free trade zones set up at home and 19 free trade pacts signed across the world over the past decade.
In 2022, the 21 pilot FTZs put 222.52 billion yuan of foreign capital into actual use, and achieved a total import and export volume of 7.5 trillion yuan. With less than 0.4 percent of the land area in China, they achieved 18.1 percent of the total foreign investment and 17.8 percent of total imports and exports for China, thereby making positive contributions to stabilizing foreign trade and foreign investment.
2023 marks the 10-year anniversary of the Belt and Road Initiative. As an important carrier of China's high-level opening-up practice in the new era, the BRI has promoted economic growth and improved people's livelihoods in various countries. As of the end of 2022, China had signed more than 200 cooperation documents with 150 countries and 32 international organizations under the BRI.
China has been advancing infrastructure connectivity with other countries. For example, it has supported the development of China-Europe freight train services and building of new international trade channels. Starting operations in 2011, the China-Europe freight trains now reach 204 cities in 24 European countries through 82 routes. A stabilizer in the global supply chain, China-Europe freight trains made 16,000 trips, carrying more than 1.6 million twenty-foot equivalent units (TEUs) of goods in 2022.
The Regional Comprehensive Economic Partnership -- the world's largest free-trade deal -- is also a case in point. Its implementation in early 2022 has propelled China to liberalize and better facilitate trade and investment. It will bring down tariffs to zero on more than 90 percent of the goods traded among the 15 members over the next 20 years, and thereby create a prominent free-trade bloc covering Southeast Asia, Northeast Asia and the Asia-Pacific.
In order to expand high-level opening-up and international cooperation, China is actively applying for membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Digital Economy Partnership Agreement, and continuously improving its level of opening-up to achieve high-quality development.
South China's Hainan province is moving on with solid steps to build high-level free trade port. The island province will further highlight trade and investment liberalization and facilitation and implement special opening-up policies regarding taxation and the free flow of cross-border investments, talent and materials.
As proved over recent years, opening-up policies have helped the world's second-largest economy pen stories of economic success. Even as uncertainties and challenges loom large across the world, such momentum is not expected to abate.
