Author: professor at nanjing university, principal expert on open economy at the yangtze institute of industrial economics
In his statement on the world economic situation and trade at the summit of leaders of the group of twenty (g-20) on 28 june, president xi jinping stated that china would build on the recent steps taken to launch a number of major initiatives to accelerate the emergence of a new open-door situation and work towards high-quality development. President xi offered to expand imports. We will further reduce tariff levels on our own, work to eliminate non-tariff barriers to trade and significantly reduce systemic costs of import chains。
In the new phase of economic globalization and china’s liberalization of its development, the strategic significance of a proactive expansion of imports is not only to pursue the macro-level role of trade balance, but also to complement the simple benefits of undersupply in the context of rising consumer demand, but also, and more importantly, to promote china’s deeper integration into the global system of factor division of labour and to optimize resource allocation on a global scale, based on china’s large indigenous market size. Specifically, under the global factor division of labour, building on specific mechanisms such as the enhanced voice of the system for imports on a large local market scale, the complementary role of the short-board industry, the high-end factor iris and the push-for-reform role, to scale up the total volume of high-end elements by attracting, gathering and nurturing, and to lay the foundation for the elements of high-quality economic development, industrial and institutional institutional strengths and foundations. In order to translate into practice the will to actively expand imports so that it can fully play its part in promoting high-quality development, china urgently needs a new breakthrough in improving the facilitation of import liberalization。
I. Main mechanisms for improving qual quality development
(i) institutional safeguard mechanisms for the distribution of elements
From an economy-specific perspective, the ability to achieve high-quality development in a global division of factors depends not only on its own factors, such as the level and quality of the elements that it owns, but also on the overall external environment of the world economy, including global economic rules and governance systems at the macro level, to attract and pool high-end factors of production. In the traditional international economic system, as a result of unequal rights, opportunities and rules, developing countries move from the lower end of global value chains to the upper middle end, where bullying, for example, leads to industrial and technological exclusion, creating obstacles and obstacles to the development of a high-level open economy. At present, the current global economic rules and governance system is facing reshaping and adapting. This has created a strategic opportunity for china to shift from passive recipients of rules to participants and leaders of rule-making, and to reshape a more equitable, just and equitable environment for development. The expansion of imports is undoubtedly an important way and initiative to raise institutional voice. On the one hand, china's expansion of imports is essentially a demonstration of its determination to expand openness to the world, setting an example for china to build an open world economy, thus laying the necessary foundation for a more open development environment in exchange for reciprocal equity. On the other hand, greater openness would allow the countries of the world to share in china’s development and to take advantage of china’s rapid economic growth. It would help to raise china’s influence and strengthen its dependence on the outside world。
(ii) short-board industry rehabilitation mechanism for intermediate imports
At the industrial level, high-quality economic development is industrial upgrading, taking full advantage of the opportunities for industrial development offered by the division of factors, particularly through the “supplementation” of the country's industrial development through the import of intermediate goods, as a neutral mechanism for high-quality development. At present, china's industrial development continues to face significant “short-board” problems in key spare parts, core basic materials, and high-end equipment. The key to addressing this issue is to take full advantage of the global factor division of labour as a mechanism of “compensation” for niche industries, i. E. To overcome technical constraints and core components by expanding imports. Of course, the emphasis on “supplementation” of industrial development through the expansion of imports does not mean that reliance on external supply should be concentrated at these critical stages and stages, but rather that the “supplementation” of expanded imports should be relied upon and fully utilized. The key point of “compensation” is not simply to “complete” specific production chains and stages in the manner they are used, but rather to “compensate” the capacity to develop through the upgrading of one's own capacities, i. E. To focus on the combination of introduction and digestion, absorption, innovation, etc., and to promote the upgrading of industrial transformation in the “compensation panel”。
(iii) innovative resource allocation mechanisms driven by demand
In addition to being driven by the supply side of technological advances and industrial transformations, demand-driven innovation is also critical to industry's drive. Currently, our consumption needs are escalating but industrial development has not yet been followed up in a timely manner. The mismatch between supply and demand, in addition to the supply-side constraints faced by industrial development, such as technology, is also an important reason for the failure of potential demand to generate a realistic large-scale purchasing power and thus innovative industrial development. The current institutional mechanisms for promoting domestic consumption are still problematic, thus limiting to a large extent the ability to translate potential demand into reality. From this perspective, the essence of a proactive expansion of imports is far from being limited to a supply-side deficit. The key and fundamental point is that, by expanding imports, potential high-end consumer demand can be translated into real demand and, in the process of nurturing new consumption growth points and scaling up consumption, demand-driven innovation can eventually lead to supply-side structural reforms and innovation can drive high-end industrial development. The expansion of imports in this sense is, in the short term and on the surface, a micro-friendly mechanism, but in a deeper and longer term it can be translated into innovative-driven development mechanisms, including the use of global high-end and innovative production factors, a dynamic optimal allocation of resources。
(iv) high-end factor iris schemes of local market size
Under the global division of factors, the locational effects of gvcs can trigger the movement of high-end elements across borders, thus contributing to high-quality economic development. In a study of the global value chain (gvc) configuration of tncs, the united nations found that the demand factor, determined by the size of the local market, was the second most important factor behind the factor endowment structure determining the distribution of the gvc. Typically, for countries and regions with larger local consumer markets, tncs are more motivated and inclined to allocate high-end production chains and stages to the country or region in order to achieve, as far as possible, a “close-up” between high-end production chains and markets with larger demand, often contributing to reducing the specific additional costs inherent in the global production landscape. If the traditional “mother market effect” revealed by the effects of local market size is a “slow variable”, then the division of labour achieved by the adjustment of the production layout of the value chain to high quality development is a “fast variable”. As a result, china has become the second largest economy in the world, relying on large domestic and local market demand effects, creating a rainbow-sniffing effect on global high-end factors of production in expanding imports, prompting tncs to deploy high-end links in industries and products to the domestic level, which is an important way and means of promoting high-quality development。
(v) mixture mechanisms for competition policy
In the past, china has adopted “unbalanced” development strategies in terms of policy measures, mainly under preferential policies, such as regions and industries. It is clear that these models face serious deficiencies and deficiencies as industries enter the stage of high-quality development. Indeed, as industries move towards high-quality development at the middle and high levels, the dynamics of development must be accompanied by major adjustments and transformations, from the “factor-driven” to the “innovation-driven”, and the smooth and successful transition to “innovation-driven” depends not only on attracting and bringing together high-end and innovative factors of production, but also on stimulating the internal dynamics of innovation. A proactive expansion of imports would undoubtedly help to create a more competitive business environment, requiring not only further reduction and elimination of tariff and non-tariff barriers, but also further regulation of internal market functioning mechanisms through back-to-back reforms; not only would it help to break down domestic market barriers, but it would also put competitive pressures on domestic firms, of course, also among tncs. Such competition policy would certainly help to stimulate the innovation dynamism of microentrepreneurs and provide an endless source of momentum for high-quality development。
Ii. Ways in which the expansion of imports contributes to the achievement of quality development
With a proactive expansion of imports to promote high-quality development, china urgently needs a new breakthrough in the following areas。
(i) investing in the facilitation of import trade liberalization
Since china joined wto, we have fulfilled our accession commitments to reduce tariff and non-tariff barriers and have made significant progress. But our average tariffs remain relatively high compared to those of developed countries, and there is room for further development of trade liberalization. In particular, there is much room for change and efficiency in trade facilitation. To that end, a series of initiatives should be put in place and implemented as soon as possible to continuously reform the customs control system and model, and to establish a base for the import and export of trade-related goods, such as exhibitions, maintenance, research and development designs, so as to make their transactions easier。
(ii) efforts to build platforms that will help expand imports
One of china's most important and valuable success stories in developing its export trade for more than 40 years has been the establishment of various vehicles and platforms for export trade, such as china's high-impact export-import commodity fairs, export fairs, etc., in terms of expanding external communication and publicity; and export industrial parks, export processing zones, free trade parks, economic technology development zones, etc., in terms of physical space. In the future, china should take full advantage of its valuable experience in the successful development of its export trade, focusing on building platforms that would help to expand imports and strongly nurture import promotion platforms. The expansion of communication and information services, for example, will allow for the expansion of government information services, the creation of a dedicated information service platform and the organization of import fairs for importing enterprises, including industry-specific import fairs. In terms of specific forms of imported space organizations and carrier platforms, a group of countries with a more prominent role of demonstration-led import trade for innovation demonstration zones could be fostered, important clusters of imported goods could be built, making full use of free trade pilot zones, free trade ports, etc。
(iii) supportive policies to expand imports are developed and implemented
Successfully achieving the objective of proactively expanding imports is crucial, at both the policy and institutional levels, in addition to removing and reducing trade barriers as far as possible, and achieving trade liberalization and facilitation wherever possible, to provide the necessary policy support to microeconomic agents specifically engaged in import trade. To this end, there is a need not only for refinement based on the realities of import expansion, such as fiscal and financial policies, but also for policy support based on classifications based on specific import needs. For example, in the case of imports of final products, especially consumer daily goods, which are vital to the livelihood of the population, policy support should focus on reducing tariffs on consumer daily goods, including by reducing consumer duties on products, and promoting the expansion of imports in a demand-driven manner. For imports based on integration into the global factor division of labour system, i. E., products that contribute to structural reforms on the supply side at the production level, particularly, the directory of imports and products needs to be adjusted in a timely manner in the light of changes and realities at the development stage, and greater fiscal policy support and financial policy support should be given to such importing enterprises, in particular by encouraging banking financial institutions to increase credit support for such imports in order to expand imports of advanced technological equipment and some of the key components。
(iv) strengthening import integrity systems and intellectual property protection
The integrity of import trade is an important component of social credit systems. In particular, under the conditions of the global division of factors, the increasing specialization and specialization of assets have resulted in more stringent time, quantity and quality parameters matching between production chains and stages. Thus, from a global production point of view, the creditworthiness of any enterprise will affect the operation of the entire production network, or even determine the achievement of the final product. In addition, production factors such as knowledge and high-end factors are often characterized by public goods. Thus, intellectual property protection is more needed than in the past under the traditional international division of labour, both through import integration into global production networks and through imports of final consumer goods. Indeed, strengthening intellectual property protection is also, to some extent, an important component of regulating credit systems through the rule of law。
(v) innovative modes of import trade to diversify import patterns
The rapid advances in information and communication technologies, especially internet technology, have been accompanied by a diversification of international trade patterns, the emergence of new trade practices and the important role, and even increasing role, of foreign trade development. In particular, under the conditions of the global division of factors, both at the production and demand levels, there is a growing trend towards individualized demand and customization, new requirements for innovation and development of traditional trade modes and the emergence of new trade practices, such as those that have emerged in recent years, such as cross-border e-commerce, market procurement trade, and the integrated services platform for foreign trade, among others. Therefore, the proactive expansion of imports, in addition to continuing to take advantage of traditional modes of imports, should be accompanied by innovation and changes in international trade, led by technological advances, changing division of labour and changing consumer demand, to nurture and utilize the role of new modes of trade in expanding imports and diversifying import patterns。
(vi) diversification of import sources by optimizing the layout of international markets
Diversification of import channels and sources not only contributes more to the strategic objective of proactively expanding imports, but is also of great importance and critical importance to circumventing possible overdependence on a single market in expanding imports, leading to industrial security problems and consumer demand security. To that end, while we need to integrate into the expansion of imports into a global division of labour system that makes good use of global factors and resources of production, we need to focus on the diversification of import channels and sources, avoiding overdependence on industrial security issues arising from a single market and providing alternatives in specific circumstances. To that end, we must not only strengthen our cooperation with the traditional developed countries, but also accelerate international cooperation “on the way” and optimize the international configuration of the place of origin of imports。
