Webinar Series: Staying in Dialogue with China Economic Globalization
China in the 1980s embarked on a gradual and selective path of opening up its by then closed economy to the world - understanding that foreign investment and technologies were critical to the country’s catch-up development. In the years that followed, most notably after China acceded the WTO in 2001, the Chinese economy rapidly integrated with the world across trade and investment and started its climb in global value chains. At the same time, foreign investment flocked to China to make use of a skilled and comparatively cheap workforce, and in later days increasingly of a highly competitive and dynamic manufacturing and innovation ecosystem. A classic win-win situation.
Around 2015 (publication of “Made in China 2025”), and especially 2016 with the election of US-president Trump, however, the US and increasingly also the EU and other countries started pushing back against China’s export-oriented development model that had run large annual trade surpluses and become a significant economic player and competitor internationally in a number of industries. China, in turn, with the 14th Five-Year Plan (2021-2025) unveiled its ‘dual circulation’ strategy to respond to a more complex global environment - among others in an attempt to make its own economy less dependent on external inputs and strengthen its overall resilience.
To date, the global economic integration has brought great benefits to China, but amid an altered geoeconomic and geopolitical context, how will top-level policymaking evolve? What does Beijing mean with “high-level opening up”? What are policy and market trends for the continued “going out” of Chinese companies? What will Beijing do about the issue of “overcapacity” invoked by many Western governments, as well as its structurally large trade imbalance? In view of some new trade policy measured of the Third Plenum, will we see a stronger trade diversion targeting the Global South? What importance do policymakers still assign to FDI and is it in China’s interest to provide a better level playing field domestically? How is China’s financial integration with the world going to evolve? What role shall and can the RMB play in all this?
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