How should we view the development situation of China's foreign trade and foreign investment? When deploying this year's key tasks, the Central Economic Work Conference stressed the need to "expand high-standard opening up" and explicitly proposed to "consolidate the fundamentals of foreign trade and foreign investment." What signal does this release? How can foreign trade and foreign investment enterprises grasp new opportunities and cultivate new drivers of growth?

　　On the 8th, Xinhua News Agency launched a new edition of the large-scale all-media interview program "China Economic Roundtable," inviting Zhu Bing, Director-General of the Department of Foreign Investment Administration of the Ministry of Commerce; Zhang Wei, Vice President of the Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce; Zhao Yugang, Deputy Director of the Bonded Area Administration of the China (Shanghai) Pilot Free Trade Zone Management Committee; and Fang Xueyu, President of Hisense International Marketing Company, to jointly discuss the new development opportunities brought by high-standard opening up.

　　The scale of foreign investment attracted fluctuates

　　but remains at a historically high level

　　Since the second quarter of 2023, the scale of foreign investment attracted by China has shifted from rising to falling. How should we view the fluctuation in the scale of foreign investment attracted?

　　In response to outside concerns, Zhu Bing said that from 2019 to 2021, China's attraction of foreign investment achieved high growth for three consecutive years; in the first 11 months of 2022, the actual use of foreign capital amounted to 1,156.09 billion yuan, the highest level for the same period in history; in the first 11 months of 2023, the nationwide actual use of foreign capital also reached more than 1 trillion yuan, still at a historically high level.

　　"The fluctuation in the scale of foreign investment is due to both economic and non-economic factors," Zhu Bing said. First, the shock and impact caused by the COVID-19 pandemic have not yet faded; the pandemic cut off offline visits and exchanges, affecting multinational companies' investment decisions, and because multinational companies' investment decision cycles are relatively long, the data lagged. Second, affected by geopolitics, cross-border capital flows have fluctuated to some extent. Third, the overall scale of global cross-border investment has shrunk, and international competition for investment has intensified, causing a certain diversion effect at the macro level.

　　A report by the United Nations Conference on Trade and Development (UNCTAD) shows that in 2022 the scale of global foreign direct investment fell 12.4% year on year to 1.3 trillion US dollars, only about 60% of the historical peak (both 2015 and 2016 exceeded 2 trillion US dollars), and 2023 still faces relatively great pressure. According to UNCTAD statistics, in 2022 countries introduced as many as 102 investment incentive policies, an increase of more than 50% year on year.

　　"Nevertheless, the fundamentals of China's economy, which are sound over the long term, have not changed, and China's advantages of a super-large market and a relatively complete industrial chain and supply chain both form a long-term attraction for foreign investors," Zhu Bing said.

　　Just as Zhu Bing said, there are not a few multinational companies that are optimistic about the Chinese market over the long term. Not long ago, Airbus broke ground in Tianjin on the second assembly line of its A320 family aircraft final assembly line invested in China.

　　"We have just released our forecast for the global aviation services market over the next 20 years. China's aviation services market value will triple in the next two decades, becoming the largest aviation services market," said Xu Gang, Airbus Global Executive Vice President and Chief Executive Officer of Airbus China. Even during the most difficult stage of the three-year pandemic, the company's pace of investment in China did not stop.

　　In 2022, Airbus set up a research and development center in Suzhou, using Suzhou as a fulcrum and leveraging the advantages of the aviation and hydrogen energy-related industrial chains in the Yangtze River Delta region to conduct research and development of hydrogen energy infrastructure and promote the transformation and upgrading of the aviation industry.

　　"Our confidence comes not only from the huge Chinese market, but also from our optimism about China's high-quality development and green development," Xu Gang said.

　　Airbus stepping up investment in China is precisely a microcosm of China's high-quality attraction of foreign investment.

　　In the first 11 months of 2023, China newly established 48,078 foreign-invested enterprises, up 36.2% year on year. The scale of investment attracted in high-tech industries accounted for 37.2%, 1.1 percentage points higher than the full-year level of 2022.

　　Zhao Yugang said that at present the Shanghai Pilot Free Trade Zone has gathered more than 400 regional headquarters of multinational enterprises and more than 250 foreign-funded research and development centers, reflecting the positive progress made in high-standard opening up.

　　Continuously shortening the negative list for foreign investment access; the 2021 edition of the negative list for foreign investment access in the pilot free trade zones achieved zero manufacturing items and continued to expand the opening up of the service sector; the number of newly added items in the new edition of the catalogue of industries encouraging foreign investment reached a record high, with the addition of multiple items for high-tech manufacturing; further encouraging foreign investment in the establishment of research and development centers; and making every effort to implement the "24 measures for stabilizing foreign investment"... In recent years, a series of policies for stabilizing foreign investment have been introduced one after another, continuously improving the quality and level of investment attraction.

　　"As the impact of the pandemic fades and investment attraction policies continue to take effect, China's appeal to foreign investment will continue to strengthen," Zhu Bing said.

　　Foreign trade growth turns from negative to positive

　　and the positive trend continues to consolidate

　　Looking across 2023, China's foreign trade withstood pressure and demonstrated strong resilience—

　　In November 2023, in RMB terms, China's export value ended a six-month decline, with the growth rate of export trade volume in that month reaching its peak since the second quarter; import trade volume maintained positive growth for 10 consecutive months; and the total value of imports and exports grew year on year for two consecutive months. At present, China still firmly ranks among the world's **major goods trading nations.

　　"Evaluating China's foreign trade performance must be based on the overall situation of global economic development," Zhang Wei believes.

　　At present, the global economic recovery is progressing slowly, and economic and trade activities remain sluggish. The UNCTAD report predicts that in 2023 the value of global goods trade and services trade will fall 4.5%, of which the value of goods trade will fall 7.5%. 2024 remains "highly uncertain and generally pessimistic," with geopolitical tensions, worsening debt problems, commodity price fluctuations, falling demand in developed countries, and increasing trade restrictive measures having become the main influencing factors.

　　"Under such circumstances, China's foreign trade has not only maintained overall stability, but also seen new growth points, demonstrating very strong resilience and competitiveness," Zhang Wei said.

　　Foreign trade has achieved steady growth in "quantity" and, even more, a significant improvement in "quality."

　　In the first three quarters of 2023, the monthly import and export growth rates of private enterprises were all higher than the overall level, and the proportion of exports of private enterprises' own-brand products rose year on year to 22.7%; cross-border e-commerce imports and exports grew 14.4% year on year; exports of "the new three" products grew 41.7% year on year, with export value maintaining double-digit growth for 14 consecutive quarters...

　　What is more convincing than the data is the personal experience of foreign trade enterprises.

　　"As far as the home appliance industry is concerned, the advantage of Chinese enterprises going global is no longer the single cost advantage of the supply chain. In the past, it was more about competing on price; now it is the 'three highs' advantage of high technology content, high added value, and high quality," Fang Xueyu said.

　　She gave an example: third-party data show that 500 US dollars is the price watershed between low-end home appliances and mid-to-high-end home appliances. In the first 11 months of 2023, sales of Hisense products priced above 500 US dollars increased 70% year on year, and sales of Hisense laser TVs in markets such as Germany, France, and Italy grew more than 100% year on year.

　　Large-screen TVs, multi-door large refrigerators, and other home appliance products are selling well in European and American markets; the business covers 126 countries jointly building the "Belt and Road"; and overseas e-commerce is developing through online and offline integration... In recent years, Hisense has increased innovative research and development, vigorously expanded into overseas emerging markets, and continuously climbed up the value chain.

　　Hisense's stepped-up pace of global layout is a true portrayal of many foreign trade enterprises accelerating their going-global efforts to secure orders and expand markets, and also powerful confirmation that a series of policies for stabilizing foreign trade and optimizing structure have taken effect.

　　Issuing the "Opinions on Promoting the Stabilization of Foreign Trade Scale and Optimization of Structure"; improving and expanding China's pilot free trade zones to 22; expanding pilot programs for high-standard opening up of cross-border trade and investment; issuing the "Several Measures on Accelerating the Integrated Development of Domestic and Foreign Trade"; and successfully holding major economic and trade events such as the China International Import Expo, the China International Fair for Trade in Services, the Global Digital Trade Expo, and the Canton Fair... China has increased support for trade policies to help enterprises secure orders and expand markets.

　　In November 2023, China-US goods trade grew 2.7% year on year, ending six consecutive months of year-on-year decline; during the same period, China's imports and exports with Latin America, Africa, and the five Central Asian countries grew 9.3%, 8.4%, and 43% respectively. China continues to expand the scale of trade with emerging markets, with close regional cooperation and diversified trade progressing together.

　　"As China's own competitiveness improves and the international situation changes, a global manufacturing network relying on China's strong manufacturing capacity may take shape," Zhang Wei said. In the future, China's advantages in trade and investment attraction may expand in breadth and depth across the globe.

　　Firmly advancing high-standard opening up

　　cultivating new drivers and reshaping new advantages

　　The meeting of the Political Bureau of the CPC Central Committee held in April 2023 proposed "placing the attraction of foreign investment in a more important position," and the meeting of the Political Bureau of the CPC Central Committee held in July 2023 proposed "taking multiple measures to stabilize the fundamentals of foreign trade and foreign investment." The Central Economic Work Conference held at the end of 2023 proposed "expanding high-standard opening up" and "consolidating the fundamentals of foreign trade and foreign investment."

　　"This series of deployments comes down in one continuous line, continuously releasing a positive signal of expanding opening up and vigorously attracting foreign investment, which is to give foreign investors stable expectations and use the 'certainty' of opening up to hedge against the 'uncertainty' of the external environment," Zhu Bing said.

　　Zhu Bing believes that the Central Economic Work Conference focused on the concerns and demands of multinational enterprises, and the series of deployments is highly targeted, mainly reflected in three aspects: first, further relaxing market access; second, ensuring business operations after access; and third, properly resolving the issue of fair competition.

　　In 2023, the Ministry of Commerce innovatively carried out the "Invest in China Year" series of activities with remarkable results. In the first 11 months, more than 500 new major foreign-funded projects of more than 100 million US dollars were added nationwide.

　　Zhu Bing said that the Ministry of Commerce is working with all departments and regions to implement the State Council's "Opinions on Further Optimizing the Foreign Investment Environment and Increasing Efforts to Attract Foreign Investment," promoting the accelerated implementation of supporting measures such as cross-border data flows and "production within China," and in particular promoting equal treatment of domestic and foreign-funded enterprises in government procurement, bidding, and standard setting, and fully safeguarding national treatment for foreign-funded enterprises.

　　The outside world is concerned about how foreign trade enterprises can find new growth points this year and for a longer period to come.

　　"There must be a ceiling on international market demand for some 'old' products," Zhang Wei said. With the global market generally saturated, innovation is particularly key.

　　Zhang Wei believes that the Central Economic Work Conference's proposal to "accelerate the cultivation of new drivers of foreign trade," including expanding trade in intermediate goods, trade in services, digital trade, and cross-border e-commerce exports, is very accurate in positioning and judgment and will play a very good role in promoting future foreign trade development. "We also look forward to the emergence in the future of not only 'the new three' but perhaps 'the new five' and 'the new six' products."

　　"Hisense will increase innovation in the high-end, green, and intelligent development of home appliances, and further improve the premium capacity of its products going global," Fang Xueyu said.

　　All the guests at the event believed that steadily expanding institutional opening up will open up new space for the development of foreign trade and foreign investment.

　　Not long ago, the State Council issued the "Overall Plan for Fully Aligning with High-Standard International Economic and Trade Rules to Promote High-Standard Institutional Opening Up of the China (Shanghai) Pilot Free Trade Zone," proposing 80 measures.

　　Zhao Yugang said that next, the Shanghai Pilot Free Trade Zone should advance institutional opening up with higher-level stress tests to make factor resources flow more efficiently; promote deeper-level reform through greater efforts in pioneering trials, so that wherever market demand is, that is where the limit of stress testing lies; and support high-quality development through experiments and exploration in broader fields, attracting more new forms of business and new models to develop.

　　"China's opening up has already passed the stage of winning solely by relying on low-cost factors," Zhang Wei said. What China is competing in now is not a 'single event' but an 'all-around event,' including higher cost-effectiveness, complete industrial supporting facilities, and a good business environment, which will give all kinds of enterprises greater room for growth.