China's openness injects vitality into global economy

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In 2024, "barrier" became the keyword in Western policies toward China. Following the U.S. decision to slap additional tariffs of 25 percent to 100 percent on Chinese products ranging from critical minerals and solar panels to electric vehicles, Canada and the European Union wasted no time in jumping on the bandwagon by imposing hefty tariffs of their own onto Chinese electric vehicles.

U.S. President-elect Donald Trump, upon his re-election win, announced plans to levy a 25 percent tariff on all goods imported from Canada and Mexico and an additional 10 percent tariff hike on all Chinese imports. Trump went even further on social media, warning the BRICS countries to drop any ambitions of creating new currencies or supporting alternatives to the U.S. dollar, or else they would face a staggering 100 percent tariff.

The steady drumbeat of protectionist policies from developed countries has cast a long shadow over global economic prospects. On December 2, 2024, Canadian logistics company Descartes Systems Group, together with British research agency SAPIO Research, released the 2024 Supply Chain Intelligence Report. Surveying nearly 1,000 supply chain leaders from major trading economies across North America, Europe, the Asia-Pacific, and South America, the report reveals the biggest challenges they face in global trade – 48 percent of respondents see rising tariffs and trade barriers as their top concern.

Yet, while the West builds walls, China is opening its doors. As the world's second-largest economy, the top manufacturing powerhouse, and the leading nation in trading goods, China has chosen a different path. By opening its doors wider to the world, China remains committed to bringing down the walls of protectionism and ensuring the world economy grows stronger, more stable and healthier.

Doors open wider

In recent years, despite the rising tide of anti-globalization in the West and increasing uncertainties amid geopolitical tensions, China's resolve and confidence to expand its openness have remained steadfast. Not only has the pace of promoting opening-up at a high standard continued unabated, but a series of groundbreaking initiatives has been introduced and implemented.

The third plenary session of the 20th Central Committee of the Communist Party of China in July 2024 made it clear that "Opening up is a defining feature of Chinese modernization. We must remain committed to the basic state policy of opening to the outside world and continue to promote reform through opening up. Leveraging the strengths of China's enormous market, we will enhance our capacity for opening up while expanding international cooperation and develop new institutions for a higher-standard open economy."

Among the session's key directives were "removing all market access restrictions in the manufacturing sector, and promoting wider opening with regard to telecommunications, the internet, education, culture, medical services, and other sectors in a well-conceived way."

To turn these directives into action, the Central Economic Work Conference held on December 11 and 12 laid out a clear roadmap for further opening-up in 2025.

The plan includes: expanding voluntary and unilateral opening up in an orderly manner; steadily enhancing institutional opening up; improving the quality and efficiency of pilot free trade zones and expanding mandates for reform tasks; accelerating the implementation of core policies of the Hainan Free Trade Port; actively developing trade in services, green trade, and digital trade; steadily promoting the opening up of the service industry, expanding the pilot projects in the fields of telecommunications, medical care and education, and continuing to build the "Invest in China" brand; deepening and implementing high-quality Belt and Road Initiative cooperation; and improving the comprehensive overseas service system.

In recent years, China has taken bold and proactive steps to build new high-standard platforms for opening-up, and the results speak for themselves.

Since its inception in 2018, the China International Import Expo (CIIE) has been held successfully for seven consecutive years. Despite rising tides of trade and investment protectionism, multinational corporations from the United States and Europe, which are sharp-sensed, profit-savvy, and long beneficiaries of China's economic growth, have shown no intention of giving up on the Chinese market.

On the contrary, they remain deeply committed to participating in the CIIE. In fact, companies from America and major European economies have consistently secured some of the largest exhibition spaces in the event year after year.

As global supply chain security and stability become pressing priorities for major economies and businesses in the world, China introduced the China International Supply Chain Expo (CISCE) in 2023, which has already seen two successful editions. As the world's first national-level expo themed around supply chains, CISCE provides a brand-new platform for global businesses to strengthen industrial and supply chain cooperation. It is yet another global public good that China has offered to the international business community.

To further facilitate the flow of people across borders, China has rolled out visa-free policies for short-term visitors from select countries, while gradually expanding the list of eligible countries, broadening the range of purposes for entry, and extending the length of allowable visa-free stays. By the end of November 2024, the number of countries covered by China's unilateral visa-free policy had climbed to 38. These visa measures have brought significant facilitation to trade and cultural exchanges between China and the rest of the world.

Moreover, to ensure that as many countries as possible share in the dividends of China's development and opening-up, China took a decisive step on December 1, 2024, becoming the first major developing country and the first major global economy to grant zero-tariff treatment on 100 percent tariff lines for products originating from all the least developed countries (LDCs) with which it has diplomatic relations.

Stabilizer of global economy

China is the world's second-largest economy, largest manufacturing powerhouse, and leading global trader in goods. As Western developed countries increasingly erect trade barriers, China's commitment to further opening-up stands as a key driver for the stability and healthy development of the global economy.

To begin with, with its vast market and status as the world's second-largest economy, China's further opening-up offers ongoing business opportunities to its trade partners. According to the Ministry of Commerce, China is now the primary trading partner for over 150 countries and regions. From January to August 2024, 36,968 new foreign-invested enterprises were established in China, marking an 11.5 percent increase year-on-year.

Many multinational corporations view China as one of the world's best investment destinations, thanks to the country's ongoing efforts to promote high-level institutional opening-up and create a first-class business environment based on market principles, the rule of law, and international standards.

Meanwhile, China is accelerating the development of a unified national market, aimed at breaking down regional barriers and improving resource allocation efficiency. As the nationwide market integration progresses, China's advantage as a super-large-scale market will be further unleashed.

In addition, given China's massive manufacturing sector and complete industrial categories, its commitment to opening-up is essential to maintain the stability of global industrial and supply chains.

In terms of industrial scale, according to the Organization for Economic Co-operation and Development (OECD), China's manufacturing output accounted for 35 percent of global total in 2023, more than the combined output of the U.S., Japan, Germany, and India. Furthermore, China's industrial system covers 41 major categories, 207 medium categories, and 666 small categories, making it the only country in the world with industries across all categories in the UN industrial classification.

China's well-developed transportation, logistics and communications infrastructure, along with its large pool of skilled talent, also play a crucial role. These advantages allow China to actively participate in the global division of labor, minimizing the risk of economic turbulence caused by supply chain disruptions. This is one reason why China could successfully host the CISCE. In November 2024, the second CISCE saw over 210 agreements getting signed, with a total value of over 152 billion yuan. More than 600 exhibitors from nearly 70 countries and regions connected with over 37,000 suppliers.

Moreover, China's gradual expansion of pilot programs for economic opening-up in telecommunications, healthcare, culture, and education sectors presents new business opportunities for service companies from developed countries.

On November 1, 2024, Chinese authorities announced the detailed work plan for the pilot program of establishing wholly foreign-owned hospitals, which allows foreign-funded hospitals to be set up in Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen, and Hainan Province. With China's aging population and growing domestic demand for healthcare, foreign companies with competitive healthcare services, especially those in Europe and the U.S., will find new opportunities in the Chinese market.

Powerful engine of economic transformation

The world is currently in the midst of a new wave of technological revolution and industrial transformation, with digital and green transitions at the heart of it. Thanks to factors like a vast market, a complete industrial system, well-developed infrastructure, a large talent pool, and fierce domestic competition, China's digital and green sectors are bursting with innovation and have amassed clear technological and production advantages.

This is precisely why China's commitment to further opening-up, particularly in the digital and green fields, will play a crucial role in driving the global digital and green transitions.

In digital transformation, China has been deepening international cooperation in recent years. Leveraging its home-ground advantage, China has set up open platforms like the World Internet Conference, the World 5G Conference and the World Artificial Intelligence Conference to strengthen digital partnerships with countries worldwide.

On the multilateral front, China has led the development of the G20 Digital Economy Development and Cooperation Initiative, co-initiated the Belt and Road International Digital Economy Cooperation Initiative, proposed the Global Data Security Initiative, and launched the Initiative on Jointly Building a Community with a Shared Future in Cyberspace.

Through these efforts, China is committed to creating a peaceful, secure, open, cooperative, and orderly cyberspace, and has been contributing Chinese wisdom and solutions to global digital governance. Furthermore, China has signed Digital Silk Road memoranda of understanding with many countries, worked with ASEAN on the development of the China-ASEAN Information Harbor, and implemented the project named Access to Satellite TV for 10,000 African Villages (or "Wan Cun Tong" in Chinese) in over 20 African countries in a bid to bridge the digital divide in less-developed regions.

In green transition, China's carbon emission peaking and carbon neutrality goals have propelled its new energy sector toward greater innovation, turning it into a new engine for foreign trade.

According to China Customs, in 2023, China's "New Three" industries (electric vehicles, lithium batteries, and photovoltaics) saw an export total of 1.06 trillion yuan, breaking the trillion-yuan mark for the first time, with a 29.9 percent growth rate year-on-year. As the global new energy industry remains in rapid development, China's export of these green, low-carbon products has not only diversified global supply but also eased global inflationary pressures, contributing significantly to global climate action and the green transition.

While a few countries, like the U.S., have imposed additional tariffs on or even resisted these Chinese products for protectionist reasons, China's exports in these sectors now reach over 200 countries and regions and are very popular in almost every part of the world.

It is worth noting that, with the expansion of the global wind power market, Chinese wind power companies are seizing the golden opportunity to participate in the international energy transition. In recent years, Mingyang Smart Energy, China's largest private wind turbine manufacturer, has been a key player in overseas wind power projects, thanks to its exceptional technological strength and efficient, cost-effective turbines. The company has helped build large-scale wind farms in Italy, Japan, the Philippines, South Korea, and Serbia, making significant contributions to local green transitions.

At present, with global economic recovery being sluggish and developed countries erecting trade barriers that hinder global growth, economists are forecasting a bleak outlook for global economic growth, especially if Trump returns to the White House and imposes punitive tariffs on major trading partners.

As the world's second-largest economy, largest manufacturing powerhouse, and largest goods trader, China, with its unique advantages in digital and green transformation, remains committed to further opening-up. This approach will undoubtedly inject vitality into the global economy, contribute to maintaining a free and open international trade order, and help steer economic globalization toward a smarter, more sustainable, and inclusive future.

The author Sun Yanhong is a Senior Research Fellow and Head of the Division of European Economic Studies at the Institute of European Studies (IES), Chinese Academy of Social Sciences (CASS).

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