Caixin Editorial: Mutual Benefit Is the Essence of Openness
China’s import expo signals its commitment to an open global economy — a goal that offers benefits for the country itself
The booth of Austrian jewellery brand Swarovski at the 6th CIIE. Photo: VCG
The Sixth China International Import Expo kicked off in Shanghai last week with two significant messages from China’s top leadership. In a letter to this year’s event, President Xi Jinping affirmed that the country remains determined to promote a high level of openness and to contribute to building an open global economy. During Premier Li Qiang’s keynote speech at the opening of the six-day event, he said that China will continue to promote greater market opportunities, better rule alignment, a stronger drive toward innovation and more “inclusive sharing.”
The Ministry of Commerce has put out a lot of numbers on the expo — more than 3,400 exhibitors and nearly 400,000 attendees came to this year’s event — back to pre-pandemic levels. There was also record participation from American companies, with the U.S. federal government setting up a booth there for the first time in an official capacity. This is not unrelated to the thaw in China-U.S. relations. Economic and trade ties continue to be the ballast of their relationship. And yet their effectiveness still hinges on more fundamental aspects of their relations. There is hope that the upcoming summit between the leaders of the two countries will further stabilize and enhance their ties.
The import expo serves as an excellent platform for China to expand its openness and strengthen cooperation with other countries and regions. Amid the “decoupling and supply chain disruptions” of today, the expo — as always — serves to remind the world that China will steadfastly grow more open, strengthen economic and trade cooperation, and strive for deals that benefit all involved. This purpose is far more important than the value of the deals reached at the event.
Some have questioned whether this kind of an event is necessary since boosting imports could be better accomplished simply by having the right policies in place. There’s merit to this view. However, it disregards the broader purposes of the event. They go beyond international procurement and into the promotion of investment, cultural exchanges and more open cooperation. The best way to see the expo is as an upgraded application of “the government builds the stage and the companies perform” model, but on a larger scale.
For China, increasing imports can leverage the advantages of its unified market, better meet domestic demand, accelerate the upgrading of its industry, promote high-quality development and advance its transformation into an innovative country. With China’ economy under pressure, the expo can play a unique role in stabilizing foreign investment and trade.
All that said, imports still ultimately depend on China’s demand. And that hinges on the state of the economy. At present, there’s isn’t enough demand, with investment, consumption and net exports — the “three engines” of China’s economy — struggling to make headway. Customs data shows that total imports over the first three quarters of 2023 were down 1.2% from the same period last year to 13.2 trillion yuan ($1.8 trillion). The situation helps highlight why the expo is so important.
Recently, some experts have said that focusing too much on national security is the greatest risk facing global trade today. Some countries have tied discussion about political issues to economic and trade issues in a way that creates a zero-sum game — a situation in which one party can’t win unless the other party loses. Major economies must balance security with openness and growth to avoid falling into the trap of “over-securitization.” There are still significant challenges facing China-U.S. trade, but they don’t justify a “decoupling” between the two countries. Their supply chains are far more closely intertwined than most politicians imagine. Even after several years of tensions over trade and technology, China-U.S. economic ties have only grown closer, though more convoluted and less transparent. Increasingly, people are realizing that a confrontation between China and the U.S. is not the way forward.
China’s moves toward greater openness have benefits beyond the foreign investment and foreign trade stability. They also advance high-quality development within China. This year’s government work report promised to “make greater efforts to attract and utilize foreign investment. We will expand market access and increase the opening of the modern service sector. We will implement national treatment for foreign-funded enterprises ... provide quality services to foreign enterprises, and facilitate the establishment of flagship foreign investment projects.”
In today’s world, foreign investment is increasingly drawn to countries with consistent rules and strong institutions, as opposed to just their market size or the opportunities they offer for profit. In addition to striving to improve Sino-American relations and actively supporting the multilateral trade system, China needs to continue perfecting its system of “letting the market play a decisive role in resource allocation,” expand institutional openness, and work to optimize its business environment. This includes ensuring policy predictability for companies, including those with foreign investment.
This year’s China International Import Expo overlapped with the 14th Caixin Summit in Beijing. The Caixin summit’s goal was to address the immense challenges facing China and the world. By engaging in open-minded discussions, bridging gaps in understanding, offsetting the trust deficit and seeking answers for mutually beneficial cooperation, the summit is an event that offers a global perspective. In this context, openness is expected to herald a new tide, and mutual benefit is the essence of this openness.