(Source: China Business News 2024-07-09)
Since the beginning of this year, my country’s foreign w88 has embarked on a very difficult rebound curve. What is the prospect of foreign w88 in the second half of the year? In the foreign w88 structure, the proportion of developing countries has increased. Is this a long-term trend? The "Three New Things" of foreign w88 overseas are encountering "new tariffs". How do companies respond? What are the reasons why Chinese companies are accelerating their “going overseas”? How to understand the relationship between openness and security? China Business News conducted an exclusive interview with Tu Xinquan, Dean of the China WTO Research Institute at the w88 casino.
In the first five months of this year, my country’s total import and export value of goods w88 was 17.5 trillion yuan, a year-on-year increase of 6.3%. Among them, the growth rate in May increased by 0.6 percentage points from April to 8.6%. From fluctuations in the first quarter to improvement month by month in April and May, foreign w88 has embarked on a rebound curve this year. In the still complex and severe international w88 environment, in the first five months, electromechanical products with high technical content and added value accounted for nearly 60% of exports. Among them, exports of ships, electric vehicles, and household appliances increased by 100.1%, 26.3%, and 17.8% respectively. At the same time, with its trading partners, in the first five months, not only did my country's w88 with its largest trading partner, ASEAN, continue to grow faster than the overall w88, but traditional markets such as the United States and Europe also recovered.
It has been difficult for foreign w88 to rebound this year. What are the prospects?
Yicai Global: In 2023, among the troika that drives economic growth, exports will contribute a negative number to economic growth, pulling down GDP by 0.6 percentage points. We are already halfway through 2024. How to judge the contribution of exports to economic growth this year?
Tu Xinquan: The w88 data in the first half of the year has rebounded significantly compared with last year, and it continues to improve. From an international perspective, the external environment has also improved. w88 relations have been slowly improving since the second half of last year. From a macroeconomic perspective, the performance of developed countries in the first half of this year was better than expected. The U.S. economy is growing relatively steadily. It should be said that Europe is slowly digesting the negative impact it received after the Russia-Ukraine conflict, so its performance in the first half of this year was relatively good. Japan's economy has also improved, with the country raising interest rates for the first time in decades. Therefore, from the external demand side, it is better than expected. So this provides a good foundation for our export growth in the first half of this year. Of course, from an import perspective, we have also experienced growth, which also reflects improving domestic demand.
Yicai Global: At the beginning of the year, many international organizations and financial institutions made predictions about the global economy. Generally speaking, global economic growth will slow down in 2024. In particular, developed economies such as the United States, Japan, and the European Union are generally facing a sharp slowdown in economic growth. Some are cut in half, and some are even expected to have negative growth. You just mentioned that the actual situation in the first half of the year was better than expected. So, will the tone of the full-year outlook change as a result? What do you think of the trends of various parties in the second half of the year?
Tu Xinquan: The situation in the first half of the year is better than expected. At least there are no factors that interrupt this improvement trend. Judging from the trend in the second half of the year, the overall trend in the first half of the year should be maintained. You say it's too good, but it's really unrealistic. Because the world economy is currently in a downward trend, overall there is indeed a lack of new growth points. This is a mid- to long-term trend. However, judging from the short-term trend this year, the possibility of maintaining the trend in the first half of the year is still very high.
In the foreign w88 structure, the proportion of developing countries is increasing. Is this a long-term trend?
Yicai Global: From a global regional perspective, the EU and the United States have become my country's second and third largest trading partners. According to data in the first five months of this year, the total w88 value between China and the EU fell by 1.3 percentage points. At the same time, the total w88 value between my country and ASEAN increased by 10.8%, and the growth of imports and exports between my country and the countries and regions co-building the "Belt and Road" is also very impressive. Will this trend continue?
Tu Xinquan: In my country's overall foreign w88 structure, the proportion of developing countries is constantly increasing, while the proportion of developed countries is relatively declining. This is a medium- to long-term trend. There are many reasons. On the one hand, developing countries have fast economic development, and correspondingly, their share must be higher. In addition, my country's commodity structure has also changed greatly. In the past, we relied heavily on developed countriesIntermediate goodsAfter importing, processing and assembling, the finished products are exported to them through processing w88. Therefore, the scale of mutual w88 is very large. But now, as the effectiveness of my country's industrial upgrading continues to become more prominent, most of our intermediate products are now produced by ourselves, and we even export a large number of intermediate products. So in fact, the complementary w88 relationship between us and developed countries is undergoing great changes. So if you look at these products that we import from the United States, many of them are bulk commodities. We export industrial products and import food, oil, etc. from the United States. Correspondingly, the w88 structure with developing countries is also undergoing adjustments. We are now exporting more and more intermediate products, including finished products, with our own brands and technologies. Automobile exports have grown very rapidly in the past two years. But in fact, many of our own brands are exported mainly to developing countries. Developed countries mainly export some products of our joint ventures to them. The export of many intermediate products is also growing very fast, and the main targets of intermediate product exports are also developing countries. So this is indeed a major change in the medium- and long-term w88 structure, reflecting the upgrading of my country's industrial structure.
Yicai Global: The "Three New Products" have been a highlight of w88 in the past two years, but we have also seen some countries imposing new tariffs on the "Three New Products". How to deal with such changes? What suggestions do you have?
Tu Xinquan: "Three new things", new energy vehicles, photovoltaics, including lithium batteries. The reason why these three products have become the current highlights of w88 growth is a result of the upgrading of our industrial structure. We are a latecomer to industrialization, but the "three new things" are that we have a very high level of independence. In new energy vehicles, the leaders are Chinese companies, whether private or state-owned. Relatively speaking, these joint venture companies are relatively "backward". This is especially true for photovoltaics. Chinese companies account for 70 to 80 percent of the global market. The same goes for lithium batteries. Therefore, the development of these industries reflects the improvement of China's independent and self-reliant capabilities. Our dependence on international technology and capital has dropped significantly compared with the past. Although we used to have many major export products, including mobile phones, computers, and other home appliances, you see, these industries were all joint ventures at the beginning. But the "New Three Things" are not. We have been autonomous from the beginning. So this is a very big change. This change is our new growth point. But from the perspective of international competition, it is a challenge to other countries. At the same time, these industries are emerging strategic industries that many countries, or almost all major industrialized countries, want to develop. Because green transformation is a global trend, everyone wants to seize the opportunity of industrial development during this transformation process. When exports began to grow rapidly in the first two years of the "New Three Things", we said we should be prepared for the possibility of w88 frictions. Judging from the development in the past two years, it has indeed occurred. We should treat it with a normal mind. These developed countries have also experienced this in their development process. Because you have impacted the existing structure, there will definitely be a corresponding reaction. For example, similar conflicts have occurred in many industries between the United States and Japan.
On the one hand, in this process, we still need to make full use of international rules and resort to international organizations, including the WTO. Second, try to find some common interests. The “three new things” are actually new energy industries, and everyone has a very strong need for cooperation. Cooperation methods can also be diverse, including technology and capital cooperation. In fact, in the process of development, we have similar cooperation with these leading industries in developed countries. When multinational companies benefit, so do we. In the future, our main way to participate in the international market cannot be entirely through local production and export. Some conflicts of interest arising from this will be quite intense. In addition, of course from an enterprise perspective, a more realistic response strategy is market diversification. In the past two years, exports of the "three new items" have been increasingly exported to developing countries. China is definitely a global trading power and must look to the world.
Yicai Global: What I just mentioned are changes in the external market. Looking inward, there are also some challenges. For example, the prices of the "three new products" are also falling rapidly. How big is the market space for the “New Three Things”?
Tu Xinquan: From the perspective of the global market space, it is still very large, but now because China has a relatively high market share in new energy products, it has triggered some w88 conflicts, including leading some countries to raise w88 barriers, which actually divides the world market, or compresses it. Correspondingly, domestic industrial competition has become more intense. But generally speaking, there is still room for this. What is more important is to create a more market-oriented environment. From the perspective of market economy, if there is too much supply, prices will drop. After prices drop, companies will exit, and demand and supply will be rebalanced. The important thing is to maintain a market-oriented mechanism so that these companies can enter and exit freely. There will always be some companies that survive. Of course, there may be a problem involved. Market segmentation prevents some companies that should withdraw from the market from exiting. That’s why the country has placed great emphasis on the construction of a unified market in the past two years. As long as we build a unified large market, even if there is such a periodic surplus, we don't have to worry about it and it will be digested gradually. Judging from the development history of our past industries, such as home appliances and mobile phones, which industry has not seen this situation? Price competition is fierce. You are like home appliances, but the market is very stable now. Therefore, some industries may be a little worried about the so-called "overcapacity" problem. In fact, the key point lies in market segmentation. Because there is no unified market. Of course, from a business perspective, how to survive in a fiercely competitive market involves improving technology and reducing costs and expanding scale. Of course, there is another point: some basic social and environmental standards must be controlled. Companies cannot be allowed to reduce costs by lowering so-called environmental standards, labor standards, or lowering quality standards.
Why are Chinese companies accelerating their “going overseas”?
Yicai Global: We see that companies going global are shifting from product exports to industrial chain shifts. Many companies are setting their sights overseas and building factories overseas. What is the endogenous driving force? What should companies pay attention to?
Tu Xinquan: These are not new phenomena. Many countries have experienced this stage. Generally speaking, as the economy develops, the capabilities of your technical elements and capital elements become stronger and stronger, and the relative cost of labor will continue to increase. Because isn’t the purpose of economic development just to increase labor costs? In order to increase wages and increase our income. This is an economic development goal and is normal. However, once factor endowments change, the adapted industrial structure will change accordingly. Once labor costs increase, labor-intensive industries will naturally lose their competitiveness. We are also talking about a so-called specificity issue. Because some capital, or for example, some entrepreneurs only understand this industry, and they used to do very well in this industry, but now there is no room for survival in this industry, but I can’t do anything else, what should I do? I can only go abroad to find new countries suitable for my skills and abilities to invest. Other countries have experienced such a process. Of course, there are other reasons, such as w88 barriers. Direct exports cannot go out, and products must be produced in another place for export. The so-called circumvention of this w88 barrier is indeed a last resort.
Third, from the perspective of the distribution of benefits in the international division of labor, the main beneficiary of exports is indeed the exporting country. Although we say w88 should be free, most people or most countries don't like w88 deficits. However, the distribution of investment benefits is relatively balanced. Because when you invest in a country, you will inevitably create local employment, contribute tax revenue to the local area, and train local talents, so the acceptance rate will be relatively high. So generally speaking, there are relatively few investment barriers, especially in the manufacturing industry and relatively more in the service industry. As the world's second largest economy and largest trading body, China's foreign investment is inevitable, or even a contribution we should make to international economic development. In fact, our foreign investment, especially in these developing countries, is to help them develop and industrialize. To a certain extent, we are cultivating consumers. We now have such a large production capacity, and China's industry accounts for 35% of the world's industry. Such a large production capacity must be digested by the world. But if other countries don’t develop, who will help you digest it? Of course, we ourselves also benefit from overseas investment. Many of these investments in developing countries, including investments in developed countries, still have a high rate of return, but of course there are risks.
How does China contribute its wisdom to the formulation of international w88 rules?
Yicai Global: China is increasingly participating in the formulation of international rules. In terms of participating in the construction of international w88 rules, systems and cooperative relations, what are the events and developments that deserve special attention this year?
Tu Xinquan: After the reform and opening up, we joined a global trading system. In this process, China actually benefited greatly. So we very firmly support the currentMultilateral trading system. At the beginning of this year in March, the 13th WTO Ministerial Conference had just concluded. China had made a very important contribution, and the "Investment Facilitation Agreement to Promote Development" initiated by us was adopted. Although it has not officially taken effect, it has been accepted by more than 120 members. This is the first time that an investment rule has been included in the WTO, which is a very big breakthrough for the WTO. So first of all, we still need to adhere to the multilateral trading system. Second, the multilateral trading system currently faces many challenges, but it should unite the majority more. The multilateral platform is still the platform that we value and cherish the most. Third, we also attach great importance to the signing and updating of regional, including bilateral w88 agreements, including investment agreements. We are also actively applying to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), "Digital Economy Partnership Agreement》(DEPA), can walk on multiple legs. Of course, there are still some that do not necessarily have formal agreements, but we still advocate resolving some possible w88 disputes and w88 frictions through negotiation and consultation, and resolving these differences through negotiation.
How to understand the relationship between openness and security?
Yicai Global: What are your expectations for policies to stabilize foreign investment and foreign w88?
Tu Xinquan: From the perspective of opening up to the outside world, one issue we may have to deal with ourselves is the relationship between openness and security. Because objectively speaking, it is true that we are now facing a worse geological environment than in the past, and it is very necessary to continue to pay more attention to security. But on the other hand, our country's greatest security, or the most important way to achieve security, is development, and development is inseparable from openness. Because we need the world market and these resources and technologies from the world. In fact, from the perspective of a major country, we may be one of the countries most deeply integrated into the international economic system. Our dependence on w88 is the highest among major countries, and of course our use of foreign capital and foreign investment are among the highest. Therefore, opening up is very critical to my country’s economic development. Only by expanding opening up can we accelerate development, and only by accelerating development can we be safer.
Another point is that at this stage of opening up, in institutional opening up, reform and opening up are inseparable. In other words, opening up is reform, and reform is opening up. Because China is already a highly open economy, the flow of various factors is already very sufficient. The flow of factors inevitably requires a more market-oriented domestic environment. So in this sense, opening up is reform, because without reform, the elements will not come.In other words, without reform, there will be no market-oriented, open, and transparent domestic market environment or business environment. In the past two years, the country has placed special emphasis on the creation of a business environment that integrates internationalization, marketization, and the rule of law. The key to a more international business environment is domestic reform. How to create a more reasonable distribution relationship between the government and the market. How to find the best combination between efficient market and effective government. There is still a lot of work that can be done, including how to make the "action" of a promising government more open, fair, just and transparent. foreign capitalEnterprises, private enterprises, they have targeted solutions to some pain points, requirements, and even complaints about market supervision, market environment, and business environment. In this way, for the enterprise, the sense of gain will be more obvious.
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