Understanding China: New growth drivers and opportunities for cooperation
An aerial photo of Shanghai on Nov. 2, 2018. [Photo/Xinhua]
Politicians, business leaders, and strategists from around the world gathered in Beijing last week to discuss how China's opening up efforts can be redoubled to build a shared global future. The discussions were part of the third "Understanding China" conference, presenting an opportunity to further understand a country that continues to surprise observers with the viability of its unique socialist model of national development.
Success of this alternative development approach has transformed China into an economic power over the span of four decades. Socialism with Chinese characteristics has given the country a 9.5 percent growth rate and lifted millions out of poverty since its reform process started. At the conference, attendees discussed how this concept can be applied in the new era.
As the world moves from uni- to multi-polarity, it is necessary to understand new hubs of commerce and trade. China, striving to broaden the liberalization of international trade and improve the flow of capital and technology, is now evolving into the center point of innovation and multilateralism.
Dissecting the last 40 years provides an insight into how China has come so far. The foremost factor for growth has been the consistency of its policymakers. They have remained committed to Deng Xiaoping's 1978 reform policy and each government has built upon achievements of the previous to create an environment that is today pulling investment and talent.
China has pursued its developmental goals during this time while following a policy of peaceful coexistence, which has enabled it to build relationships through the eagerness of over 60 countries in revamping their infrastructure networks under the Belt and Road Initiative (BRI).
The theme of the "Understanding China" conference revolved around China's new growth drivers and opportunities for global cooperation. These two factors are steering China's progress and warrant a closer look.
Workers assemble Fuxing bullet trains at a factory in Qingdao, east China's Shandong province, May 10, 2018. [Photo/Xinhua]
With solid backing from the government, China became a powerhouse of the world's manufacturing industry. In addition to this, the self-supporting private sector is making high tech manufacturing a new driver of growth. By December 2018, the realized foreign investment in this domain was more than 78 billion yuan – a rise of 30 percent from the same point in the previous year.
Alongside the increased focus on high tech manufacturing is the development and recruitment of high-level talent. On one hand, investment is being boosted in research and development – amounting to 2.2 percent of GDP last year – while on the other, top of the line experts are being added to the country's workforce through programs like the "Thousand Talent Plan."
Another contemporary growth driver is manufacturing investment. Expanding 15 percent in the third quarter of this year, manufacturing investment is showing strong signs. This is a clear indication that the industry is moving towards its high-end capability. Major economists are predicting the overall figure to climb further next year.
Complementing the manufacturing investment is an increasing demand for Chinese products. From tech to agriculture, products manufactured in China are now household names on every continent. These exports are bringing home capital and consequently stimulating further affluence.
Back in the mainland, a robust consumer force is driving the national momentum. Consumption has contributed to China's economic power by 60 percent and is rising due to higher buying power and intensive urbanization. Coupled with that, the service industry has developed into a recent growth engine, becoming the largest sector in the economy.
China is displaying a renewed intent to work with global players, resulting in a fresh space for cooperation.
Instead of relying on a positive list of services and industries where foreign entities were allowed to invest in China, the mechanism has shifted to a negative list, creating additional options for China's investment partners to widen their businesses and increase transparency for market practices.
Specifically, tech is an area with tremendous potential for multinational ventures. Enterprises relying on big data, Artificial Intelligence (AI) and Internet of Things (IoT) are multiplying at a remarkable speed.
A cargo vessel is seen at Chuanshan port zone of Ningbo Zhoushan Port in east China's Zhejiang province, June 13, 2018. [Photo/Xinhua]
While investing in China, Free Trade Zones can be considered the best starting points. Now numbering 12, these thoroughly planned and geographically distributed zones are creating a trade facilitating environment where thresholds for foreign investors are kept low to encourage their entry.
The availability of sophisticated infrastructure, a skilled workforce and a constantly advancing value chain is making China an attractive destination for investment. It is today a stable political and economic force, presenting a positive outlook for the future. The country's new growth drivers and opportunities will have to be understood if the world wishes to keep pace.
Daniel Hyatt is a Pakistan-based freelance journalist and commentator on modern China.
Opinion articles reflect the views of their authors only, not necessarily those of China.org.cn.
(Source_title：Understanding China: New growth drivers and opportunities for cooperation)