宋晓舒

 Personal profile:
 Song Xiaoshu, PhD in economics, teaching and

researching in Department of International

Economics and Trade, Business School, Zhengzhou
University.
 Main research fields: international trade theory and

policy.
 Part 1 China’s foreign trade pattern
 Part 2 China’s foreign trade strategies
 Part 3 China’s foreign trade promotion
policies
 Part 4 China’s cross-border e-commerce
 To understand China’s foreign trade situation, and
master development of China’s foreign trade;
 To master the changes of foreign trade strategies, and

focus on the "Belt and Road" initiative;

 To master the foreign trade promotion policies; and

master development of China’s pilot free trade zones;

 To master China’s cross-border e-commerce

development.
 1. Status quo of China’s import and export
 2. An analysis of the reasons for China’s import and

export growth
 3.The path, logics and theoretical innovation of

China’s foreign trade development

 4. Changes of international economic pattern in the

next 15 years and China’s countermeasures

 In 2019, the total value of import and export of China’s
trade in goods was 31.54 trillion RMB, with an
increase of 3.4% year on year. Among them, exports
were 17.23 trillion yuan, with a 5 percent increase year
on year; imports were 14.31 trillion yuan, with a 1.6
percent year on year. The trade surplus was 2.92
trillion yuan, with a 25.4 percent increase.
 In2019, China’s foreign trade development
showed an overall steady situation with
improving quality.
 Specifically, there are the following six

characteristics:
 First, the scale of imports and exports is
rising every quarter. The value of imports
and exports in the first quarter of 2019 is 7.03
trillion yuan, the second quarter 7.68 trillion
yuan, the third quarter 8.26 trillion yuan, and
the fourth quarter 8.59 trillion yuan. 
 The value in December was 3.01 trillion yuan,
and December witnessed a double-digit
growth rate of 12.7 percent year on year.
Among these, exports in December were 1.67
trillion yuan, increasing 9 percent, and imports
were 1.34 trillion yuan, increasing 17.7
percent. In December, the volume of foreign
trade, exports and imports hit a monthly peak.
 Second, the ranking of China’s major
trading partners has changed, with ASEAN
becoming the second largest trading
partner of China. In 2019, the largest trading
partner remained the European Union, with
imports and exports to the European Union
reaching 4.86 trillion yuan, increasing by 8
percent;
 imports and exports to ASEAN reached 4.43 trillion
yuan, increasing by 14.1 percent; imports and exports to
the United States reached 3.73 trillion yuan, decreasing
by 10.7 percent; and the fourth largest trading partner
was Japan, with imports and exports to Japan reaching
2.17 trillion yuan, increasing by 0.4 percent.
 In addition, China’s imports and exports to countries

along the "Belt and Road" countries amounted to 9.27

trillion yuan, increasing by 10.8 percent, 7.4 percent
higher than the overall growth rate.
 Third, private enterprises overtook the
foreign investment enterprises for the first
time, becoming the first foreign trade main
body in China. In 2019, the value of private
enterprises import and export reached 13.48
trillion yuan, with an increase of 11.4 percent,
accounting for 42.7 percent of China’s total
foreign trade value, with an increase of 3.1
percent year on year.
 Of these, exports were 8.9 trillion yuan,
increasing by 13 percent, and imports were
4.58 trillion yuan, increasing by 8.4 percent.
The value of foreign-invested enterprises’
import and export reached 12.57 trillion yuan,
accounting for 39.9 percent of China’s total
foreign trade value. The value of state-owned
enterprises’ import and export reached 5.32
trillion yuan, accounting for 16.9 percent.
 Fourth, the structure of trade mode is
further optimized, and the proportion of
general trade import and export increased.
 In 2019, imports and exports of general trade

were 18.61 trillion yuan, with an increase of

5.6 percent, accounting for 59 percent of
China’s total foreign trade volume, an increase
of 1.2 percent year on year.
 Of these, exports were 9.95 trillion yuan,
increasing 7.8 percent, and imports were 8.66
trillion yuan, increasing 3.1 percent. Imports
and exports of processing trade were 7.95
trillion yuan, decreasing by 5.1 percent,
accounting for 25.2 percent of China’s total
foreign trade value.
 Fifth,
export commodities are dominated by
mechanical and electrical products and
labor-intensive products, accounting for
nearly 60 percent of the total.
 In 2019, China’s mechanical and electrical products
export reached 10.06 trillion yuan, with an increase of
4.4 percent, accounting for 58.4 percent of the total
export value. Of these, electrical and electronic products
export reached 4.63 trillion yuan, increasing by 5.4
percent, and machinery and equipment export reached
2.87 trillion yuan, increasing by 1.4 percent. In the same
period, exports of seven categories of labor-intensive
products, including textiles and clothing, amounted to
3.31 trillion yuan, increasing by 6.1 percent.
 Sixth,the volume of imports of iron ore, crude
oil, natural gas, soybean and other commodities
has increased. In 2019, China imported 1.069
billion tons of iron ore, with an increase of 0.5
percent; imported 506 million tons of crude oil,
with an increase of 9.5 percent; imported 96.56
million tons of natural gas, with an increase of 6.9
percent; and imported 88.51 million tons of
soybean, with an increase of 0.5 percent. 
 In addition, the import of meat grew relatively
fast, with imports of beef reaching 1.659
million tons, an increase of 59.7 percent.
 The above are the main characteristics of

China’s foreign trade in 2019.

 Inrecent years, the Customs has made great
efforts to reduce the overall clearance time and
continuously optimize the port business
environment. In 2019, the overall customs
clearance time of China’s import and export is
41.4 hours and 4 hours respectively, 42.3%
and 42.4% less than that in 2018. This time is
greatly shortened than that in 2018.
 In 2019, the external environment of China’s foreign
trade development is indeed complex and severe, and
the world economic growth has continued to slow
down, and the domestic and foreign risk challenges
are obviously rising. However, in such a situation,
China’s foreign trade has maintained a steady growth,
and is in a steady development trend. China is still
expected to maintain the status of the largest country
in global trade in goods throughout 2019. I think
there are three reasons for the growth.
 First, the domestic economy is stable. The basic trend
of Chinese economy keeping a good momentum of
steady and long-term growth has not changed.
According to the data of previous 11 months in 2019,
national added value of industrial enterprises above
designated size has increased by 5.6% year on year,
the total retail sales of consumer goods has increased
by 8% year on year, and the investment in fixed
assets has increased by 5.2% year on year.
 China’s GDP for 2019 increased fast, significantly
ahead of the rest of the world’s major economies. 
 Owing to strong material and technical foundation

accumulated since the reform and opening up, the

super-large-scale market advantages and domestic
demand potential, the stable performance of the
domestic economy has laid a solid foundation for the
growth of foreign trade. I think that's the main reason.
 Second, China’s overall economic resilience is
relatively strong, which is also reflected in the
field of foreign trade. China's economy has
strong resilience, potential and room for
manoeuvre, and this resilience is equally
available in the field of foreign trade.
 China is the world’s largest manufacturing
country with a complete industrial system. More
than 220 kinds of Chinese industrial output rank
first in the world, and domestic industries provide
a strong support for the development of foreign
trade. China owns a large number of foreign trade
enterprises, and in 2019, the number of foreign
trade enterprises with actual import and export
activities reached 499,000.
 Inparticular, private enterprises with more
flexible production and operation released a
stronger vitality of foreign trade development.
One characteristic of foreign trade in 2019 is
that private enterprises become the largest
main body of foreign trade for the first time,
with exports accounting for more than 50% of
total China’s export.
 Meanwhile, China’s trading partners are all
over the world. In 2019, China’s trade with
EU, ASEAN and other major trading partners
increased, and China’s trade with “Belt and
Road” countries, emerging economic markets
in Africa and Latin America increased by
10.8%, 6.8% and 8%, respectively.
 The third is the sustained policy effects of
stabilizing foreign trade. Since 2018, China
has issued a series of policies and measures to
stabilize foreign trade and foreign investment,
and issued an unprecedented scale of tax
reduction and fee reduction policy, effectively
reducing the burden on enterprises.
 The introduction of these policies have achieved
effects, including twice increases in the rate of tax
rebates for some products, the autonomous reduction
of import tariffs on consumer goods, the elimination
of import tariffs on some pharmaceuticals. For
example, the value of export of goods involved in tax
rebates twice increased by 7.7% in 2019. The effect
after the tax cuts was also obvious, with consumer
and pharmaceutical imports increasing by 19 percent
and 25.8 percent respectively in 2019.
 China’s Foreign Trade Trend in 2020
 With regard to the situation of China’s foreign

trade in 2020, I think the current world

economic growth continues to slow down, and
is still in the period of deep adjustment after
the international financial crisis.
 However, with further development of supply-side
structural reform, domestic policies and measures of
stabilizing economy continue to be effective, the
business environment continues to improve, the vitality
of the main body of the market continues to increase, the
foreign trade structure continues to optimize, and the
long-term trend of accelerated power conversion has not
changed. It is expected that China’s foreign trade will
continue to maintain a steady growth trend in general in
2020, and the development of high quality will rise to a
new level.
 We will sum up and explain the reform path of
China’s foreign trade, and take a bird’s-eye
view on the course of China’s trade strategy,
opening up pattern and trade structure, so as to
reveal the logics and theoretical innovation of
China’s economic opening up to the outside
world.
 Based on the practice of reform and opening up for
40 years, we sort out the path of China’s foreign trade
reform and refines the logic of foreign trade changes.
With the changes in the world trade pattern, China’s
opening-up theory has continuously achieved major
innovations. The new comprehensive opening-up
pattern theory, the higher level of open-type
economic theory and the trade power building theory
innovation are concentrated expression of new
development concepts in the new era.
 China’s reform and opening up process is not
a simple logic that can be spread overnight
and fully, but a gradual open process starting
from several pilot cities in the south to more
than 10 cities along the coast, and then from
the Yangtze River basin to the inland areas.
 In January 1979, a proposal for the construction of an
industrial zone at Shekou was presented to the State
Council. Strategic decisions with keen insight were
made on the establishment of export zones. In August
1980, the ninth NPC Standing Committee approved
the Regulations on Special Economic Zones in
Guangdong Province, ratifying the establishment of
special economic zones in Shenzhen, Zhuhai,
Shantou and Xiamen.
 Before the establishment of Shenzhen Special
Zone, Shenzhen was a typical “low factor
endowment structure” and “poor” area, and
the initiative system arranged by the Central
Government provided policy support for the
introduction of foreign development resources,
and was destined to make it a city dominated
by innovative and export-oriented economies.
 Shenzhen has always been at the forefront of
institutional innovation, such as taking the lead in
introducing foreign capital to develop mixed
ownership economy, spearheading the reform of
foreign exchange management system, and taking the
lead in introducing the first foreign bank. Shenzhen
started development on the edge of the South China
Sea, and its successful experience has gradually
spread to other coastal cities and even inland
provinces.
 Shenzhen Special Economic Zone in the initial stage
mainly imported raw materials and consumer goods
to drive the export of processed products. With the
expansion of the scale of foreign trade, the proportion
of machinery and equipment, semi-finished products
and auxiliary equipment in its imported commodities
has begun to increase, and the proportion of
manufactured goods (mainly textile products) in
export products has gradually increased.
 It is worth noting that the total import and export of
Shenzhen accounted for 25.3% of the country in
1990. In 1980s, its rate of economic growth create a
unique “Shenzhen speed”. Since entering the 21st
century, Shenzhen’s annual GDP growth rate is still
as high as 14.7%. In 2017, Shenzhen’s total imports
and exports accounted for 10.1% of those of China,
ranking first for 25 consecutive years in China’s large
and medium-sized cities.
 China’s eastern coastal areas have a relatively solid
economic base, complete and perfect industrial
systems, and relatively adequate technical force and
human capital reserve. Taking these advantages into
account, in May 1984, the central government
decided to further open 14 coastal port cities, i.e.,
Dalian, Tianjin, Qinhuangdao, Yantai, Qingdao,
Lianyungang, Nantong, Shanghai, Ningbo, Wenzhou,
Fuzhou, Guangzhou, Zhanjiang and Beihai.
 In February 1985, the central government decided to
list the Yangtze River Delta, the Pearl River Delta,
Xiamen-Zhangzhou-Fuzhou Triangle in Southern
Fujian, Liaodong Peninsula and Jiaodong Peninsula
as open areas of the economy, and established the
Hainan Special Economic Zone in April 1988. So far,
opening-up pattern of China’s coastal areas has
begun to take shape.
 The coastal Economic Belt implements the following
functions in the opening-up of foreign economy: (1) The
frontier of introducing foreign capital and international
trade. Coastal areas not only have geographical
advantages adjacent to the international markets and are
backed by the vast inland areas, but also have a
relatively good economic and technological base and
industrial base, especially suitable for the development
of export-oriented economy through the introduction of
overseas capital and advanced technology.
 (2) The leading testing field for market mechanism
reform. Ranging from 4 special economic zones to 14
open cities along the coast, the transformation of the
urban economic system kicks off in coastal cities.
These regions took the lead in the reform of the market
expansion mechanism. With the price system as a
signal to guide the flow of various factors, they opened
up labor markets, real estate markets, securities
markets, foreign exchange transfer markets, and has
taken an important step in the reform of marketization.
 Coastal open cities are also at the forefront of
accelerating the reform of enterprise
management system, for example, in 1985
Guangzhou identified 3 state-owned
enterprises to carry out joint-stock reform,
such as enterprises participating in mutual
equity, multi-party joint investment, internal
staff shares, domestic and foreign offerings
and other forms.
 (3)The hub connecting domestic and foreign
markets. The coastal economic belt plays a
role of two-way radiation hub and growth pole
in the internal and external economy.
 By speeding up foreign direct investment and foreign
trade, special economic zones and coastal open cities
have achieved the goal of introducing overseas
capital, technology and management models, and
have spread technology and knowledge through
spillover effects to enterprises in inland regions
through the industrial linkage mechanism, thus
accelerating the quality and efficiency of traditional
industries in China.
 Over the past 40 odd years of reform and
opening up, the coastal economic belt has
been the most active area of China’s foreign
trade and absorption of foreign capital.
 In1990s, the coastal economic belt developed
rapidly in opening up to the outside, and the
central government began to think about the
next step in expanding the focus of the open
space pattern, in which a consensus on
“strategic transfer” to the western region was
reached.
 Severalprovinces in the Yangtze River Basin
have also offered to speed up the construction
of the Yangtze River industrial belt. The space
structure strategies were put forward on the
development of coastal area, together with
vigorously developing areas along the Yangtze
River and the eastern coastal economic belt.
 Theeconomic development and opening-up of
the Yangtze River economic belt have aroused
great attention from the central government. In
1991, the view was proposed to develop
Pudong of Shanghai and use Shanghai as a
base to develop the Yangtze River Delta and
the Yangtze Valley.
 In 1992, a consensus was reached in the Symposium on
economic development planning in the Yangtze River
Delta and Yangtze rivers. It stated that the Yangtze River
Delta and the along-the-river region contain seven
provinces and one metropolis, possessing good
infrastructure, relatively advanced agricultural economy,
relatively complete industrial categories, coupled with
multiple cities, intensive talent, strong scientific and
technological strength and other favorable factors. This
region will become another fastest- growing economic
development leading area following coastal development.
 Accelerating the coordinated development of coastal
developed cities and economic belts along the river has
become an important strategy to expand the pattern of
opening up. The Yangtze River Economic Belt covers 11
provinces and cities along the river (Shanghai, Jiangsu,
Zhejiang, Anhui, Jiangxi, Hubei, Hunan, Chongqing,
Sichuan, Guizhou, Yunnan), accounting for about 1/5 of
China’s land area, the total economic volume accounting
for 43% of the national economy. At the same time, the
opening along the edge is becoming increasingly active.
 Since2012, China’s economy has entered a
new normal changing from rapid growth to
medium and high speed growth, with
continuous optimization and upgrading of its
economic structure, and a shift from factor-
driven and investment-driven to innovation-
driven economic growth.
 China’s reform and opening up has entered a
critical period and a deep-water zone. In the
face of the new pattern of international trade, in
August 2013, the State Council decided to set
up a pilot free trade zone in Shanghai, and
during September and October of the same
year, President Xi Jinping proposed cooperative
initiatives to build “the Silk Road Economic
Belt and the 21st-Century Maritime Silk Road”.
 In March 2015, China issued the vision and action to
promote the construction of the Silk Road Economic
Belt and the 21st-Century Maritime Silk Road, and
proposed to jointly build the new Eurasian Continental
Bridge, China-Central Asia-West Asia, China-Indochina
Peninsula, corridors of international economic
cooperation among China, Mongolia and Russia and
other countries, relying on the international channel on
land, supported by the central cities along the route, and
taking key economic and trade industrial parks as the
cooperation platform.
 In the sea we emphasize the reliance on important
ports to build a smooth, safe and efficient transport
channel. With the help of established and effective
regional cooperation platform, we should actively
develop economic cooperation partnership with
countries along the route, and jointly build a
community of interests, a community of destiny and a
community of responsibility for political mutual trust,
economic integration and cultural inclusion.
 Since 2012, China has accelerated the construction of a
new system of open economies, pushing for a higher
level of opening-up pattern. The “Belt and Road"
initiative has become an important opportunity for
Chinese enterprises’ “going global” and a key channel
for China's development to benefit Asia and realize the
community of human destiny. “Belt and Road "countries
along the total population reached 4.4 billion people,
accounting for about 63% of the world. The total
economy is about $21 trillion, accounting for 29% of the
world.
 Inthe spatial pattern of opening up to the
outside world, initially the “Belt and Road”
covers 65 countries in East Asia, South Asia,
Southeast Asia, Central Asia, Western Asia,
Middle East and Europe. Now China has
signed “Belt and Road” cooperation
documents with 144 countries around the
world.
 China’s pilot free trade zone covers 18 provinces and
cities in eastern, central, western and northeast China.
As China’s first FTZ (free trade zone), the China
(Shanghai) Pilot Free Trade Zone has deepened and
perfected the investment management system with
negative list management as the core, and perfected
the trade supervision system with the emphasis on
trade facilitation, in accordance with the requirements
of “courageous exploration, bold tests and
independent reform” of the pilot free trade zones.
 It has also deepened and perfected the financial
innovation system, which aims at the convertibility of
capital items and the opening of financial services
industry, and the in process and afterwards
supervision system with the transformation of
government functions as the core, and giving full
play to the radiating and driving role of the key
functional bearing areas such as financial trade,
advanced manufacturing and scientific and
technological innovation.
 In December 2014, the State Council decided to set
up pilot free trade zones in Guangdong, Tianjin and
Fujian. In August 2016, the State Council decided to
further establish pilot free trade zones in Liaoning,
Zhejiang, Henan, Hubei, Chongqing, Sichuan,
Shaanxi. In April 2018, Hainan was established as a
pilot free trade zone. In August 2019, Jiangsu, Hebei,
Heilongjiang, Guangxi, Shandong and Yunnan were
approved as new pilot free trade zones.
 The 19th CPC Congress clearly put forward that “We
will grant more powers to pilot free trade zones to
conduct reform, and explore the establishing of free
trade ports.” 
 The construction of free trade ports is a systematic

project, which needs to further promote the

innovation and reform of the corresponding
institutional mechanism, fully absorb and draw
lessons from foreign advanced experience, explore
the new path and mode of opening to the outside.
 An orderly promotion to the construction of
free trade ports requires considering the
macro-economy operation, the strategic
pattern of financial opening-up, tax
supervision policy and risk prevention and
control system.
 3.2.1 Structural changes in import and export trade
products
 From 1978 to 2019, China’s total foreign trade grew

at an average annual rate of 18.6%. Among them,

exports grew at an average annual rate of 19%, and
imports increased by 18% annually. Over the past 40
odd years, China’s export commodity structure
witnessed 3 important changes.
 The first change was the transformation of export
structures dominated by primary products to
manufactured goods. Cheap land and labor force once
became the comparative advantages of China's
development of processing trade. At the beginning of the
establishment of Shenzhen and other special economic
zones, the emphasis was on the introduction of
processing trades(processing with materials or given
samples, assembling supplied components)and
compensation trade, and the development of export-
oriented processing industry.
 China has brought its processing capacity and
comparative advantage into the value chain of the global
professional division of labor by means of processing
trade, which makes the proportion of manufactured goods
in the structure of export products continue to increase.
From 1978 to1992, the share of manufactured goods rose
from 46. 5% to 80%, while the ratio of exports of primary
commodities, mainly food and fossil fuels, fell from 53.
5% to 20%. China‘s export trade has achieved a
transformation of the export structure from primary
products to manufactured goods.
 The second change is from the textile products to
mechanical and electrical products mainly export
structure transformation. From 1993 to 2000 China's
textile industry products in the export trade structure
accounted for a decline in the year, heavy chemical
products gradually rising, especially the proportion of
machinery transport equipment increased rapidly,
while the declining ratio of miscellaneous products,
textile, rubber, mining products and their products.
 Low-and middle-end electromechanical
products, including tape recorders, audio,
automatic data processing equipment, watch
parts, lighting fixtures and containers, first
overtook textile products as the first largest
category of exports in 1995, indicating that
China is beginning to form international
competitiveness in the export of
electromechanical products.
 The third change is the transition from low-end
electromechanical products to high-end
electromechanical and cutting-edge technology products
exports. Since the 21st century, China's export product
structure gradually transformed from low-end mechanical
and electrical products to high-tech, high-value-added
high-end mechanical and electrical products. Among
them, the posture of export is strong in high technical
content of construction machinery, CNC lathes, ships, IT
equipment and other mechanical and electrical products
and equipment manufacturing products.
 In China’s export trade structure, exports and the
proportion of high-speed rail, nuclear power, satellites
and other cutting-edge technology products are
increasing. If the change of product structure can
basically outline the way of upgrading China’s foreign
trade structure, then the technical complexity of export
products to analyze the technology level and value
added content of export products from a deeper point of
view. After accession to WTO, the overall complexity
of China’s export products has increased rapidly.
 From 1980 to 2017, the proportion of primary
products in China's import trade structure
showed the characteristics of descending
before rising, and the proportion of imports of
manufactured goods showed a trend of rising
before falling.
 With regard to imports of manufactured goods, the
proportion of machinery and transportation
equipment in Chinese imports has always been
growing, with textile, rubber, mining and metallurgy
products and their products, chemicals and related
products, and miscellaneous products accounting for
a share of the import trade structure from 59. 7% in
1980 fell to 38. 6% in 2017.
 In addition, since 1993, as processing trade has
become the main mode of trade for China's exports of
goods, the share of intermediate import trade in
China's trade structure has also shown a general
upward trend, in recent years, with the change of
global trade pattern and China's trade transformation,
the proportion of processing trade has declined, and
the proportion of intermediate imports has also begun
to decline.
 Compared with trade in goods, China’s trade in
services started late. The total value of 1991 of
service imports and exports is only 10.8 billion U.S.
dollars, but with the continuous opening up and the
continuous deepening of reform, China’s total import
and export of services increased rapidly. The total
value of service exports and imports in 2018 (791.8
billion yuan) ranked second in the world, maintaining
second place in the world for five consecutive years.
 Since 1980s, the service trend of industrial structure in
developed countries has become more and more
obvious, with the use of information technology as the
core of new technology widely used, industrial structure
to technology, knowledge, service-intensive upgrading,
the added value in the modern manufacturing chain is
more reflected in the "Smile Curve" at both ends, that is,
the front-end R&D, design, market research, consulting
services and back-end third-party logistics, supply chain
management optimization and sales services.
 The proportion of imports and exports of
traditional Chinese services is decreasing. For
example, the share of traditional services, such
as tourism, transport and construction, was 49.
3%, 12% and 2.4% respectively in 1997, and
the share of other business services and the
relative high-end services sector is very low.
 In2016, the share of the three major
traditional services had fallen to 46. 5%, while
the proportion of exports of productive
services with high technical content and higher
value-added, such as computer and
information services, consulting, insurance,
finance and advertising, increased
significantly to a total share of 34%.
 The performance of import and export of
emerging services is outstanding. At present,
the import and export of telecommunications,
computer and information services grew
fastest year-on-year in all kinds of emerging
services other than China's three traditional
services, followed by cultural services,
professional management and consulting
services.
 On the export side, intellectual property
royalty and cultural services grew fastest,
followed by telecommunications, computer
and information services, professional
management and consulting services. On the
import side, imports of telecommunications,
computer and information services and
cultural services have grown more rapidly.
 Another typical feature of China's trade in
services is that service imports are
significantly larger than service exports. Since
1992, when exports of trade in services were
below imports for the first time, the status of
the service trade deficit, with the exception of
1994, lasted for up to 25 years.
 On the one hand, it objectively reflects the relatively
weak international competitiveness of China's service
trade and the reality that the scale and quality of exports
need to be improved urgently. On the other hand, the
service trade deficit is also a staged phenomenon in the
process of China's economic transformation and
upgrading, especially the import of specific industries
such as high-tech and intellectual property rights, which
helps to promote the absorption of domestic technology,
and then promotes the independent innovation and
industrial structure adjustment.
A unified national negative-list market access
system has been in place since 2018.The
implementation of this system will promote
the full opening of China's service industry to
the outside world, and further reduce the
restrictions on foreign investment in the
service sectors such as finance, education,
cultural entertainment, medical care, childcare,
professional services and e-commerce.
 Inthe early days of China's reform and
opening up, the first problem to be solved was
the capital and technology gap, needing attract
foreign direct investment in key industries and
critical areas as much as possible. China's
market consumption potential is huge, labor
costs are low, prospects for development are
good, foreign investors can also obtain a
higher return on investment.
 Since1990s, foreign direct investment in
China has always maintained a relatively fast
growth rate. China's economic opening
entered a new stage of development.
Judging from the growth rate of FDI in China, foreign
direct investment in China increased almost exponentially
in 1992, reaching its highest growth rate, and in 1993
China became the world's second largest FDI host country.
The growth declined from 1994 to 1997, but is still at an
average annual high of 13%.Despite a number of
distinct economic cycles over the decades since then, FDI
has generally maintained a steady pattern of
growth, which, of course, also declined significantly during
the Asian financial crisis of 1997 and the global financial
crisis of 2008.
 After 2008, China introduced a series of new
regulations to stipulate that foreign-invested
enterprises and domestic enterprises should pay taxes
at a flat rate, and increase the number of foreign
capital bans. China's goal of introducing foreign
capital Management from large-scale and high-
growth indicators have gradually changed in the
direction of optimizing the structure of foreign capital
and creating a level playing field for enterprises.
 The main sources of direct investment in China are
Hong Kong China, Singapore, South Korea, Japan,
the United States, Germany, France, Britain and
Macao China. The five industries with the largest
actual use of foreign direct investment were
manufacturing, real estate, wholesale and retail trade,
leasing and business services, and transportation,
warehousing and postal services account for more
than 80% of total FDI.
 Foreign direct investment is introducing foreign
funds into the country, while domestic funds go out is
foreign direct investment (outward foreign direct
investment, OFDI or ODI). After the 2008
international financial crisis, the overall recovery of
the world economy was weak and the growth rate
slowed, but China's attracting foreign investment and
foreign direct investment continued to maintain a
good development trend. China's foreign direct
investment started late but growing rapidly.
 In 1999, China promoted the "Going global" strategy,
encouraged Chinese enterprises to invest abroad to build
factories and engage in production and business
activities, and has since opened up a new era of China's
OFDI. China only started the foreign direct investment
statistics system in 2002, when OFDI flows were only
$2.7 billion. In the 13 years since then, China's OFDI has
maintained an average annual rate of 33. 6% of ultra-fast
growth. By the end of 2015, the investment had exceeded
the trillion dollars for the first time, ranking second in the
world.
 Since the reform and opening up, the biggest
characteristic of the change of direct investment
structure is the rapid formation of the two-way flow
pattern of direct investment. From 2009 to 2014,
China's actual use of foreign capital was greater than
China's OFDI, a difference that narrowed year by
year, and for the first time in 2015 China's OFDI
exceeded the actual amount of foreign capital used.
 Judging from the industry characteristics of China's
OFDI, non-financial OFDI dominates, with the main
concentration flowing to manufacturing, especially
equipment manufacturing. About 80% of China's
OFDI goes to developing countries and economies,
especially “Belt and Road” countries.
 Since the 18th CPC Congress (in 2012), China has
accelerated the construction of a new system of open
economy and promoted the formation of a higher
level of open pattern, and the “One Belt, One Road”
initiative has naturally become an important
opportunity for Chinese enterprises to “go abroad”
and a key channel for China’s development to benefit
Asia and realize the community of human destiny.
 By the end of 2018, China's direct investment in belt
and road countries accounted for about 12%. From
2013 to 2018 China’s direct investment in B&R
countries surpassed US$90 billion, realizing a
turnover of US$400 billion in foreign contracted
projects in these countries. By the end of 2016, China
has built 56 economic and trade cooperation zones in
more than 20 belt and road countries, contributing
about 1.1 billion of dollars in taxes and 180,000 of
jobs to host countries.
 3.3.1
Market opening drives technological
upgrading

In late 1970s, China's reform and opening up

proclaimed the large market of 960 million
people was open to the world, and such an
oversize population and vast market were
rapidly attracting the influx of global capital.
 Since 1978, China’s foreign trade has been based on the
open thinking of "market for technology", relying on
the rapid growth of foreign direct investment and
foreign trade development, taking joint ventures to
jointly produce and innovate, relying on foreign
investment to obtain advanced technology property
rights, direct purchase of advanced technology to obtain
property rights, the use of mergers and acquisitions to
gain access to technology ownership and other forms,
and gradually formed the "introduction-imitation-
absorption and independent innovation" of the
technological innovation logic, thus promoting large
transformation of China to the great trading nation.
 The logic of technological innovation based
on market opening has been proved to be in
line with the development law of developing
countries. In particular, since 1990s, the global
value chain and trading system, dominated by
the form of intra-product division of labor has
become a central model for promoting global
trade expansion and economic growth.
 Developing countries through the rational use of foreign
capital to develop foreign trade. On the one hand, with
advanced technology of foreign-funded enterprises and
higher technology content of products into the Chinese
market, the implicit technology spillover will help
domestic enterprises to achieve technology imitation,
absorption, so as to enhance the technical complexity of
their own products. The competitive effect will force
China's local enterprises to continuously improve their
technology and improve the quality of their products in
order to enhance their competitiveness.
 On the other hand, the import and export of
intermediates with high technology content from
developed countries can also be realized through the
effects of "learning from imports" or "learning from
exports”. Under the premise of strengthening
independent innovation, it is the basic logic of
technological progress since China’s reform and
opening up to make full use of the channels of market
sharing and international cooperation to realize
technological upgrading.
 Opening up to the outside country has gradually realized
the transition from planned economy to socialist market
economy, the essence of which is the process of market
allocation of resource mechanism and continuous
improvement of efficiency. From the earliest 4 special
economic zones to 14 open cities, to the full opening
along the Yangtze River Economic Belt and inland,
China's opening space pattern continues to expand and
extend, allowing regions to make full use of their own
factor endowments to attract foreign investment inflows.
 Inthe development of foreign trade, the
domestic labor force, capital, resources and
other factors gradually broke through a series
of controls, relying on the factor price signal
of market economy, in the domestic
realization of cross-regional free flow and
excellent resources increase the total factor
productivity of the region and industry.
 Foreign trade and the inflow of foreign capital
have also enabled China to be brought into the
space of globalization. On the one hand, the
inflow of various innovative elements from the
advanced technologies of the developed countries
in the West can make up for the shortcomings in
the structure of China’s elements, and stimulate
the domestic acceleration of high-end elements of
self-cultivation.
 On the other hand, by participating in
transnational investment and trade, Chinese
enterprises and all kinds of innovative
elements will also promote the structural
improvement of other countries, thus realizing
the optimization of the allocation of Chinese
elements on a global scale. Make globalization
and free trade network more stable and
prosperous.
 After the reform and opening up, China has
for a long time adopted a one-way thinking of
opening up, that is, emphasizing attracting
foreign capital and encouraging the exchange
of labor-intensive "made in China" for
advanced foreign technology and management
experience. This is in line with the general rule
in developing countries.
 During this period, China’s foreign trade structure was
dominated by general processing trade, while the
structure of trade products was dominated by labor-
intensive and resource-intensive products, although the
advantage of factor endowments was played in the
historical period at that time. The positive effect of
expanding the scale of trade also causes China’s trade
structure and industrial structure to be locked in the low
end for a long time, with low added value of products,
low technology content, weak competitiveness and so
on, which limit China’s transition from a big trading
country to a trade power.
 With the deep integration of the global economy and
the change of the international trade pattern, China’s
scientific and technological progress and industrial
upgrading have made a breakthrough, and the
traditional one-way opening mode has lagged behind
the actual demand of economic exchanges and
cooperation between China and the world. Since
2012, China has put forward a new pattern of
comprehensive opening to the outside world.
 The implementation of two-way opening helps
to promote the transformation and upgrading
of trade product structure from low value-
added to high value-added products, and to
promote the transformation and upgrading of
China’s industrial structure to high-tech
intensive industries.
 While attracting more overseas investment, China has
stepped up outward direct investment to encourage its
competitive and high-tech enterprises to "go global" .
At present, China has become a major importer of
global direct investment, as well as a developing
country with the largest foreign direct investment. In
2015, China’s foreign direct investment ranked second
in the world, exceeding the amount of foreign capital
actually used for the first time.
 3.4.1 Basic rules and general trend of China’s opening
up
 Basic rules and general trend of China’s opening up

include: (1) fully complying with the law of change in

the stage of economic growth. In recent years, China’s
economy has stepped into the new normal stage of
economic growth from high-speed to medium-high
growth, the economic structure is constantly optimized
and upgraded, from factor driven, investment-driven to
innovation-driven economy.
 This conforms to the laws of economic development
supported by China’s and even international
experience. Therefore, the strategic design, policy
formulation and development concept of China’s
opening to the outside world must be fully respected
and actively conform to the changing laws of the
economic growth stage.
 (2) Adhere to the law that the market determines the
allocation of resources. In the past 40 years of reform and
opening up, China has realized the great transformation
from planned economy to socialist market economy, and
has achieved the "growth miracle". This also fully
confirms that the market plays a decisive role in the
allocation of resources is the objective law of the market
economy. From the perspective of opening to the outside
world, we should optimize the allocation of resources
between domestic and foreign markets, and speed up the
free and efficient cross-industry, cross-border flow of all
kinds of high-end elements.
 With new changes in the pattern of economic
globalization, the general trend of China’s opening up
in the new era can be summed up into four aspects:
first, the opening pattern is more comprehensive. On
the one hand, full liberalization includes opening to
both developed and developing countries. For example,
the "Belt and Road" initiative has strengthened China’s
economic and trade ties with developing countries. On
the other hand, full opening up includes both
manufacturing and service industries.
 Second, the trade structure is more balanced. The
strategy of foreign trade in the new era emphasizes
the active expansion of imports at the same time as
stable exports, the promotion of the quality of
domestic supply system, the satisfaction of the
people’s consumption upgrading demand, the
realization of superior import and export, and the
promotion of balanced development of foreign trade.
 Third, the opening of the service industry to a deeper
level. Under the background of the upgrading of
market demand and the continuous emergence of new
services, the opening-up of the service industry to the
outside world has been deepened.
 Fourth, two-way investment is more synergistic.
China’s opening to the outside world has developed
from the initial emphasis on foreign capital inflow to
a new stage of two-way investment strategic layout
that pays attention to both capital inflow and capital
outflow. Encouraging the inflow of high level
technology and investment will help to achieve high
quality development of domestic economy and
promote high quality development of export trade.
 Promoting reform and development by opening up is
an important magic weapon for China to make new
achievements in its modernization drive. The report
of the Nineteenth National Congress of the
Communist Party of China puts forward "promoting
the formation of a new pattern of all-round opening
up" and "developing an open economy at a higher
level", which is a major innovation in the theory of
China’s opening up.
 The theoretical innovation of opening up is the
embodiment of the new concept of opening up and
development in the new era. Practical innovation
includes carrying out the "Belt and Road" initiative,
speeding up the construction of a new open economy
system, and advocating the development of an open
world economy, and active participation in important
areas such as global economic governance.
 1. The theory of new pattern of comprehensive
opening-up
 Opening-up theory of socialism with Chinese
characteristics in the new era has systematically
answered questions on what kind of openness China
needs in the new era and how to better promote
opening up. It includes not only the expansion of the
open scope, the widening of the field and the
deepening of the level, but also the innovation of the
open mode, the optimization of the layout and the
improvement of the quality.
 Two-way flow of elements and commodities means the
combination of import and going out. The use of foreign
capital is not an expedient or simple introduction of capital,
but through the inflow of foreign capital to master advanced
technology, business philosophy, management experience,
seek more market opportunities, and drive Chinese enterprises
to embed global industrial chains, value chains, and
innovation chains. We should give full play to the technology
spillover effect and industrial upgrading effect of foreign
capital inflow, promote various forms of cooperation in the
field of innovation, and promote the economy to move
towards the middle and high level.
 At the same time, we should support enterprises to go
out actively and steadily, not only to promote the
export of goods and services, but also to obtain
innovative resources and innovation networks, so as
to improve the quality and increase efficiency of the
national economy. The key areas of two-way flow of
elements and commodities are advanced
manufacturing industry and high-end service
industry, and promote deep structural adjustment
with high level opening.
 The combination of coastal opening and inland border
opening is an important basis for optimizing the regional
open level. China’s opening to the outside world began
along the coast and gradually advanced from east to
west. The great development of the western region and
the construction of "Belt and Road" have been
accelerated, and the central and western regions have
gradually moved from the opening endings to the open
frontier. While optimizing the coastal opening, the
opening level and level of inland and border areas have
been raised.
 China is a developed country to the east and a developing country
to the west, represented by the countries along the route of "Belt
and Road". The east-west two-way opening means the combination
of opening to the developed countries and opening to the
developing countries. The developed countries are China’s main
economic and trade partners, and the consolidation of economic
and trade cooperation with developed countries is the basis of
China’s open economy. At the same time, China’s economic and
trade ties with developing countries are becoming increasingly
close. We will comprehensively develop equal and mutually
beneficial cooperation with developed and developing countries to
diversify export markets, import sources and investment partners.
 2. The higher level open economy theory
 The higher level open economy theory in the new era

mainly includes the following aspects: (1) promoting

trade and investment liberalization and facilitation.
 The implementation of high-level trade and

investment liberalization and facilitation policies

requires not only the continuous improvement of
their own open level, but also a more proactive
creation of an open external environment.
 We will fully implement the pre-entry national
treatment plus negative-list management system,
significantly relax market access, expand the opening
up of the service industry to the outside world, and
protect the legitimate rights and interests of foreign
investment; We will promote the establishment of
free trade zones, give free trade pilot zones greater
autonomy in reform, and explore the construction of
free trade ports.
(2) Innovating the way of outward investment and trade.
 To accelerate the transformation of an open economy
from factor driven to innovation-driven, from scale-and-
speed to quality-and-efficiency, from cost-and-price
advantage to comprehensive competitive advantage
with technology, standards, brand, quality and service
as the core to achieve changes in quality, efficiency and
power, and to form global trade, investment and
financing, production, and service network, and
accelerate the cultivation of international economic
cooperation and new competitive advantages.
 (3) Combining multilateral opening with regional opening
to promote the construction of an open world economy.
 The multilateral trading system represented by WTO and
the regional trade arrangement represented by free trade
area are the two driving mechanisms to drive the
development of economic globalization. Active
participation in the reform and construction of the global
governance system is not only the need for China to expand
its own open space, but also reflects the responsibility of
maintaining the international economic order.
 3. Promoting the strategic theory of trade power
construction
In the past 40 years, China’s foreign trade has
achieved a historic leap, but the big and not strong
problems still stand out, especially the weak
innovation ability, the quality, grade and added value
of export products are not high. Therefore, promoting
the construction of trade powers will be an important
development strategy for the opening up of the new
era.
 (1)Optimize the international market layout,
optimize the domestic regional layout, optimize
the structure of foreign trade commodities,
optimize main structure of operation, optimizing
the mode of trade, promoting the transformation
of export form, the transformation of
competitive advantage, the transformation of
growth power, the transformation of business
environment and the transformation of global
economic governance status.
 (2) Promote the optimization and upgrading of trade
in goods and the innovation of trade in services so as
to achieve the balanced development of import and
export trade. While encouraging the export of high
and new technology, equipment manufacturing and
brand products, we should expand the import of
advanced technology and equipment, key
components and high quality consumer goods, and
build national brands of "made in China" and "China
Service".
 (3) Pay attention to promoting the role of industry
and two-way investment in the development of
foreign trade, enhance the position of global value
chain of core industries, optimize the business
environment, rely on innovation-driven development,
and enhance the ability to deal with the uncertainty
risk in external market.
 The next 15 years will be the transformation period of
China’s comparative advantage, the key period for the
rise of China as an emerging power, and the period of
major adjustment of the international pattern. A new
round of technological revolution, global economic
governance change, big country game and other
important factors, will profoundly change the future
international economic pattern.
 In the future, the international economic pattern will show the
trend of “9 major changes": 1. Global economy will be in a
period of slow growth;2. Transformation of the mode of
production promoted by the new technological revolution will
reshape the pattern of global industrial division of labor; 3.
The structure and pattern of international trade will be
changed, digital and service will be highlighted, the rules will
emphasize the high level of facilitation and
liberalization;4.Global cross-border investment will rise in
volatility, cross-border investment rule-making will appear a
new trend;
 5.With the acceleration of global population aging,
middle-income groups in developing countries will
surpass the developed countries; 6.Green
development will become an important orientation
for countries to formulate development strategies;
7.Global energy structure and pattern will be
profoundly changed; 8.Overall state of global food
security will improve; 9. International financial
centers will be diversified.
 These major changes in the external environment will
bring unprecedented new opportunities and
challenges to China’s development. We should grasp
the new trend of the change of the international
economic pattern, and seek advantages and avoid
disadvantages in the new round of opening to the
outside world.
 Inthe future, under the common role of many
factors, the international economic structure
will have a major change. In general, the next
15 years of the international economic pattern
will show the following trends.
 1. Global economy will grow at a low rate
 In the next 15 years, some developing countries will
continue the process of urbanization, a new round of
technological revolution, urbanization will remain the
potential for future growth in some developing countries, by
2035, the global urbanization rate will reach 61.7%. This
will be an important driving force for future global
economic growth. However, global economic growth is
facing a slowdown in population growth, accelerated aging
and increasingly stringent environmental protection
constraints.
 These favorable factors could lead the global
economy into the next long-term cycle of prosperity,
but this is largely reflected in the recovery of
productivity growth, which may not necessarily
return to historical average growth as a whole. The
main reason is that global economic growth still faces
many challenges:
 The main results are as follows: (1) The slowing of
population growth and the aggravation of aging will become
an important factor to drag the economic growth of
developed countries and some developing countries.
According to the projections of the United Nations
Department of Economic and Social Affairs in 2017 World
Population Outlook, the global population will grow from
7.35 billion in 2015 to 8.89 billion in 2035 and 9.77 billion
in 2050. The global proportion of older people (over 65)
will rise from 8.3% in 2015 to 13.0% in 2035 and 15.8% in
2050.
 (2) The emergence of new technologies in the
utilization of energy resources will bring conflicts of
interests between the subjects of new and old
technologies, and at the same time, it will also change
the pattern of global energy supply and industrial
division of labor. Climate change and environmental
pollution will increasingly become the constraints of
global economic growth.
 (3) Although globalization will continue to develop
deeply in the long run, globalization faces many
challenges in the near future. Of course, the future
transformation of China’s economy and its role in the
global arena will also drive global economic growth.
 Considering the changes of major basic factors such as
technology, urbanization, population, and environment,
the simulation results show that the global economic
growth rate will be lower, and the average speed of
global economic growth is 2.6% in the period from 2020
to 2035. The growth rate of developed economies will
likely be further slow, with an overall growth rate of
around 1.7%, less than the average growth rate over the
past 50 years, with a decline in growth in developing
countries and an annual growth rate of about 4.9%.
 2. The transformation of mode of production promoted
by the new technology revolution will reshape the
pattern of global industrial division of labor
 In the industrial revolution, represented by information

technology and digital technology, the mode of

production and industrial organization will be
characterized by intelligentization of production mode,
platform of industrial organization and opening up of
technological innovation, which bring an all-round and
profound impact on global division of labor.
 It is expected that in the next 15 years, China and the
United States will be expected to lead the development
of the digital economy, that the real power of
innovation in emerging economies will rise rapidly,
that the division of production will be further
deepened, and that the share of digital value added in
the industrial value chain, and that the share of trade
and investment in intangible assets, such as digital
assets will rise.
 It is expected that over the next 15 years, information
technology and the emerging digital economy will
provide opportunities for latecomers to catch up. The
rise of the digital economy will speed up the spread of
knowledge to developing countries, contribute to local
production and boost the industrialization process of
developing countries. If properly applied, it will drive
global economic growth.
 At the same time, information technology is changing the
characteristics of industries, some labor-intensive
industries will be transformed into capital, technology-
intensive industries, which will not only change the
capital, technology-intensive industries in the global
layout. It will also accelerate the transformation and
development of late-growth economies. The combination
of information technology and resource advantages of
late-development economies can strengthen the
advantages of late-development economies.
 Technological change may bring about some
new small probability events with global
influence, such as social changes lag behind
technological change and the resulting social
turbulence, and the chain reaction caused by
the major accidents of industrial information
security. We must attach great importance to
this and take precautions against it.
 3. International trade will be digitalized, serviced and
fragmented
 In the future, the further development of economic
globalization and the deepening of international division of
labor will continue to be an important driving force for the
sustained development of international trade. In the future, the
development of global trade will present new trends and
characteristics, i.e., the form of international trade has
changed. Trade in digital products, trade in services, and intra-
industry trade will be significantly increased. There has been a
change in the mode of trade.
 Driven by information technology, cross-border e-
commerce will develop rapidly, and new forms of
international trade will give birth to new regulatory
models. The pattern of global trade will change. The
regionalization of the value chain of international
division of labor is further strengthened; the position of
emerging economies in global trade is rising. Global
trade imbalances will peak around 2030 before
gradually improving.
 International trade rules more emphasis on high
standards, high level of facilitation and liberalization.
Rule-making focuses on post-border measures, such as
competition, regulatory consistency, environmental
standards, labor standards, and new 21st century issues.
The global trading system has changed. Regional
economic cooperation agreements and bilateral
liberalization agreements are becoming more and more
important, and the multilateral trading system faces
greater challenges.
 4. A new trend appears in cross-border investment
rulemaking, and global cross-border investment will
rise in volatility

 The establishment of cross-border investment rules

will be an important part of the global economic
governance system in the next 20 years. Cross-border
investment rules continue to improve. Liberalization,
facilitation level will continue to improve.
 Although individual countries adjust their
foreign capital policies and introduce some
restrictive measures in the short term, opening
up, promoting and attracting foreign
investment will remain the main policy tone in
the future.
 Previous bilateral investment agreements have focused
on investment protection and will be more integrated
into investment liberalization and facilitation in the
future; and the system of investment rules is
complicated. The development of bilateral and regional
agreements will increase the complexity of the
international investment agreement system and the
formation of the multilateral investment system; and
the requirements for cross-border investment
compliance are higher.
 The principles of sustainable development and the new
content of corporate social responsibility will continue
to be incorporated into investment rules, and
enterprises will face higher compliance requirements,
and the dispute settlement mechanism between
investors and host countries may be included in
investment agreements, and the degree of investment
protection will be strengthened. Increasing importance
of national security review in host government
regulation of cross-border investment.
 Global cross-border investment will rise in volatility.
Among cross-border investment, the share of services
rose, while the share of manufacturing fell, while
investment in tangible assets decreased and investment
in intangible assets rose. Multinational companies will
continue to be a major force in global cross-border
investment and value chain distribution. The number of
multinationals in emerging economies will continue to
rise. Developing economies are on the rise in cross-
border investment.
 5. Accelerated global population aging, with middle-
income groups in developing countries surpassing
developed countries
 Global population development is undergoing profound
adjustments. Population growth generally slows, global birth
rate generally declines, the decline in developing countries is
more obvious, and some countries have a long-term low birth
rate; The population of major economies is on the rise, with
some facing a decline in population in the future. A marked
improvement in health and an increase in the life expectancy
of the population are to be seen.
 In terms of population distribution, global population
growth in the next 20 years will mainly come from
developing countries; birth rate will continue to face a
downward trend and mortality rates will rise due to the
impact of age structure and socio-economic development
trends; The population aging accelerates, the developed
countries enter the stage of deep aging, and the developing
countries also show the aging trend as a whole. The global
average expected years of schooling continued to rise, but
growth has declined significantly in recent years, and
progress in low-income countries has been relatively slow.
 By 2035, global per capita national income is expected to
reach the $16,000-18,000 range, up 60 percent and 80
percent from $10300 in 2016. The weakening of the
technological advantages of the developed countries and
the aging of the population will continue, and the
emerging countries represented by China will still
maintain the comparative advantage of accelerated
technological progress and abundant labor resources. The
trend of narrowing the income gap between high-income
countries and low-and middle-income countries will
continue.
 As the level of per capita income rises, the middle-
income group will expand. By 2020, there will be
more than 3.2 billion middle-income groups around
the world and will soar to around 4.8 billion by 2030.
From a sub-regional perspective, half of the current
middle class is concentrated in the developed
economies of Europe and the United States, while by
2030, 2/3 will be concentrated in Asian countries and
regions, with an estimated population of more than
3.2 billion.
 The size of middle-income groups in Latin America, the
Middle East and North Africa and sub-Saharan Africa will
also increase to varying degrees, with Europe and North
America experiencing a long-term low natural population
growth rate. The share of the global middle-income group
will decline significantly. Global anti-poverty efforts also
face some key challenges, such as war and conflict remain
the greatest threat to human development, poor people
vulnerable to ecological degradation, and the key data
needed to formulate anti-poverty policies.
 6. Green development will become an important
orientation for countries to formulate development
strategies

 In recent years, the carbon productivity, energy

productivity and raw material productivity of the major
developed countries in the world have been improved.
At the same time, there is a broad public opinion base
for the realization of green development and the
response to climate change in the society.
 However, the vast number of developing countries still
face the serious challenge of achieving a coordinated
balance between economic development and the
protection of the environment. Achieving economic
growth while protecting national health is the priority
policy orientation of developing countries, but changes
in the energy structure, controlling greenhouse gas
emissions puts enormous pressure on developing
countries, including China.
 In 2035, in order to achieve the sustainable
development goal, promote the world development,
control the pollution, realize the low carbon transition ,
green development is becoming the mainstream of all
countries. Green development has an important impact
on the pattern of international economy.
 Green is a moral principle that will influence the
global outlook on development, values and culture;
green is a rule that will affect economic activity and
transnational investment and trade among countries.
 Green is a kind of restriction, and the requirement of
environmental standard and energy structure, which
exceeds the economic affordability of most
developing countries at present, requires developing
countries and developed countries to work together to
find a new path of low-cost development.
 Green is a kind of incentive, which will force the
formation of technological innovation, industrial
development, pollution emission reduction, promote
green innovation and green industry development,
and form a new point of economic growth.
 7. Profound changes will be made in the global energy
structure and pattern

 The structure of energy supply and demand is

undergoing profound changes. The first is cleanliness.
significant breakthroughs in unconventional oil and gas
production technologies have significantly increased
the supply capacity of oil and gas resources, with
global natural gas growth expected to grow by 45% by
2040.
 Second, low carbonation. Renewable energy costs have
fallen sharply and will go online on par with conventional
fossil fuels after 2020.
 Third, electrification. The role of electricity in the future
global energy system is even more prominent. Two-thirds
of the new energy consumption will be used to generate
electricity, but the rapid growth in coal-fired power
generation will come to an end. Rapid improvement in
battery technology, and in passenger vehicles, electric
vehicles are expected to compete with traditional fossil-fuel
vehicles in cost by 2025.
 Fourth, digitization. The wide application of digital
technology in energy supply and demand will improve
energy supply capacity, reduce costs, improve energy
efficiency, and save costs. Distributed energy will
become a new way of energy supply.
 A profound change will take place in the pattern of global
energy supply and demand. From the perspective of the global
energy demand pattern, by 2035, global energy demand is
expected to increase by about 30 percent, and developing
countries, especially the "Belt and Road" region, will become
the center of the global energy demand growth in the future.
Asia has become the world’s main importer of oil and gas.
From the perspective of global energy supply pattern, apart
from OPEC, Russia and other traditional energy exporters, the
United States will become a new global energy supplier.
 The shale oil and gas revolution in the United States
has led to a rapid decline in external dependence on oil
and gas. By 2020, the United States will become a net
exporter of energy. In 2030, the annual export volume
of US natural gas is expected to reach 140 billion cubic
meters from 70 billion cubic meters in 2020. To
become a global exporter of natural gas. U. S. energy
independence will have a major impact on international
politics, diplomacy and finance.
 8. The overall state of global food security will improve

 The great potential of global agricultural resources is

conducive to ensuring global food security. According to
GAZE (Global Agro-ecological Zones) calculations,
jointly constructed by the Food and Agriculture
Organization of the United Nations (FAO) and the
International Institute for Applied Systems Analysis,
significant potential arable land remains in the global
land resources.
 There are 3.5 billion hectares of agricultural land
available in the world and 1.467 billion hectares of
potential arable land have not been effectively utilized.
Taking into account the progress of production
technology and the continuous improvement of crop
adaptability, there are still 2.6 billion hectares of
potential agricultural arable land in the world that have
not been effectively exploited and utilized.
 Driven by population growth and economic growth, global
food consumption will continue to grow in the future. By
2035, global grain production is expected to reach about 2.8
billion tons, grain consumption will reach 2.77 billion tons,
and soybean production and demand will remain basically
balanced (420 million tons). Meanwhile, global food
consumption has escalated. By 2035, it is expected that more
than 3 billion people will enter the third stage of food
consumption "eating healthier", nearly 3.2 billion people will
enter the second stage of "eating well" and 2.5 billion people
will enter the first stage of "eating one’s fill".
 Grain supply and demand pattern has been adjusted.
Africa (especially sub-Saharan Africa) and Asia
(Central Asia) will be new bright spots for global food
production growth. By 2035, the major food-
consuming countries in the world will still be those
with large populations and economies, and the growth
in food consumption will mainly come from countries
with faster population and economic growth, such as
India, China, the United States, Indonesia and Nigeria.
Brazil, Pakistan, Mexico, Philippines, Bangladesh, etc.
 International trade in grain has continued to grow.
Global agricultural trade will also continue to grow as a
result of the imbalance between grain production and
consumption growth, with global grain trade expected
to reach 450 million tons by 2035, accounting for 16
percent of global grain production. Trade flows will
also change, and developing countries will be the
growth point of net imports of world food trade.
 In all, the overall state of global food security will
improve in 2035, but the food security situation in
some areas is still severe, and the problem of
interregional imbalances is even more prominent.
The food security situation in sub-Saharan Africa and
South Asia remains grim.
 9. Diversification of international financial centers

 International currency diversification. By 2035, the

United States will remain the most influential country
in the world, and the dollar will remain at the heart of
the international monetary system.
 With the deepening of economic globalization, more
and more economies enter into the international
monetary system, the coverage of the international
monetary system is also greatly expanded, the
international currency has a gradual trend of
diversification. The super-sovereign reserve currency
will be more widely used and supported by the
international community. The financial security
mechanism in the international monetary system has
been strengthened from different channels.
 International financial centers are diversified. Financial
capital cities in emerging market countries, represented
by Shanghai, have slowly risen in the global financial
system and are competing directly with cities in similar
developed countries. But London and New York will
remain major international financial centers. The trend
towards a regional division of financial centers has
gradually strengthened.
 In the face of the profound change of international
structure, China should make full use of the
advantages of the great powers, actively participate in
the reform of the global economic governance
system, and take the initiative to create an external
environment. 
 At the same time, we should adapt to the transformation of
China’s comparative advantages, give full play to the
advantages of the local market, human capital, infrastructure
and industries, speed up the reform and innovation of the
system and mechanism, and vigorously attract global
production and innovation resources. High-end manufacturing
and modern service industry, enhance innovation ability,
cultivate new advantages of participating in international
competition, further enhance China’s position in the global
value chain and international influence, ensure that the
socialist modernization is basically realized in 2035.
 1. Firmly grasp the opportunities brought by the new
technological revolution and green development
represented by information technology
 China has a good foundation for innovation and

development in the field of new technology, coupled

with the attention of the government and the active
input of the society. In the next 15 years, the
revolution in digital technology, energy technology
and green technology will provide a rare opportunity
for China to achieve "overtaking by bends".
 We should give full play to the advantages of huge
market scale, abundant human resources, and
complete industrial foundation, make up for the
shortcomings of the system, overcome the challenges
faced, encourage industrial innovation, and strive to
take a new road from application innovation to
original innovation. To achieve leapfrogging
development and even catch up.
 First, we will strengthen technological innovation in
key areas. We will strengthen the construction of
digital technology infrastructure, accelerate the
construction of cloud, network and end-to-end digital
infrastructure, and improve the popularity of digital
infrastructure. We will accelerate the construction and
promotion of industrial Internet platforms. Strengthen
network security, digital standards, intellectual
property protection, digital sovereignty and other areas
of global cooperation.
 Push ahead with renewable energy, electric vehicles
and energy digital technology innovation, business
model innovation and government management
reform, and provide reliable products, solutions and
governance solutions for the world’s energy change,
leading the global energy revolution. Speed up
environmental protection and circular development of
major generality or bottleneck technology equipment
research and development, build market-oriented
green technology innovation system.
 Second, we will continue to improve our ability to
innovate in science and technology. We will push
forward the supply-side structural reform of science
and technology, shift the model of scientific and
technological innovation from demand-driven to
interactive-driven between demand and supply,
enhance the ability of original innovation, and achieve
forward-looking, original, and leading major scientific
and technological breakthroughs in some areas. 
 Gradually change from "follower" of science and
technology, to "parallel runner" , "innovator" and even
"leader". Focusing on the field of emerging technology,
the implementation of major national science and
technology projects, highlighting the key common
technology, leading-edge technology, modern
engineering technology, disruptive technology
innovation, in the application of basic areas to achieve
leapfrog development.
 Third, to create a good environment for industrial
innovation and development. We will give full play to
the huge advantages of the Chinese market, adhere to
the innovative path of evolution from applied
innovation to original innovation, break down the
traditional institutional barriers, and actively build an
industrial development system that is compatible with
the new technological revolution.
 We will set up a sound market supervision system to
adapt to the development of innovation, support
innovation and entrepreneurship, promote the
application of scientific and technological
achievements, and accelerate the new round of
technological revolution in China to “take root and
bear fruit”.
 Fourth, the promotion of reform of human resources and
education market. According to the demand of human
resources in a new round of technological revolution, we
should speed up the reform of science and technology system
and education, cultivate innovative talents, and encourage
talents to innovate. According to the age structure and digital
demand of the population, the transition plan is designed, the
lifelong learning system is constructed, the vocational training
is strengthened, and the new demands are met with the change
of work type caused by the new technology revolution.
 Fifth, we should actively build a high-level open innovation
system and integrate innovation resources on a global scale. In
order to meet the high-level international competition under
the new technology revolution and integrate into the global
scientific and technological innovation, it is imperative to
establish a good environment for international scientific and
technological exchange and cooperation and an innovative
environment that is in line with the international standards, so
as to attract and gather talents. Technology and capital and
other international high-end innovation elements.
 Facing the future new technological revolution and high-
quality development put forward higher requirements for
innovation, to create a good environment for the construction
of global scientific and technological innovation centers,
including the establishment and perfection of tax revenue
matching with attracting first-class overseas innovative
talents, and medical care, etc. We will strengthen the ability of
enterprises to integrate global innovation resources and
cultivate world-class innovative enterprises.
 2. With a view to enhancing the international
competitiveness of the industry, efforts should be made
to promote market-oriented reform in key areas
 We will work hard to upgrade the international
competitiveness of the industry. Make full use of the
achievements of the new technological revolution,
accelerate the transformation and upgrading of
traditional labor-intensive industries, change the
international economic pattern in the next 15 years, and
correctly handle the relationship between
"transformation" and "transfer" in China’s strategic
choice. Construct our main international division of
labor system.
 In the field of capital and technology-intensive, the
new strategy of opening-up and development will be
implemented, and the international competitiveness of
capital-and technology-intensive manufacturing and
service industries will be enhanced with the impetus of
expanding opening-up and deepening reform.
 We will actively promote the market-oriented reform of
key factors of production. In-depth development of the
electric power management system, oil and gas
management system, household registration
management system, fiscal and tax management
system, financial management system, to break down
the barriers of the system mechanism, excavate the
space of factor cost decline, cultivate new advantages
of international competition of industry.
 We will speed up market-oriented reform in key areas.
First, the introduction of market competition in the
field of infrastructure, strengthening the regulation of
the nature of natural monopoly infrastructure.
 Second, by fostering green credit, green insurance,
green bonds, green stocks, private equity and other
green financial products, the formation of a mature and
stable green financial market, internalization of
environmental protection costs, and embedded in the
whole process of social production. 
  Third, speed up the opening up of public data,

establish a good data flow system, and make the

competition of enterprises more fair in the process of
digitization.
 3. Speeding up the opening-up to the outside world at a
high level

 First, we will further improve the level and level of

opening up to the outside world. We will further
expand the opening up of services and high-end
manufacturing industries, and improve the environment
for foreign investment. We will continue to improve
the level of trade and investment facilitation and take
the initiative to reduce tariffs. 
 To benchmark international high-standard economic
and trade rules, further improve the opening level of
the free trade pilot zone, give full play to the stress
testing and pre-test role of the free trade pilot zone, and
speed up the replication and promotion of innovative
experiences. Continue enhancing the radiation driving
effect of free trade pilot zones.
 Second, we will speed up the construction of a new
system for an open economy. To implement the
management system of pre-admission national
treatment plus negative list for foreign direct
investment, to establish and perfect the post-event
supervision system, to perfect the safety examination
system and the risk prevention system; We will
strengthen local autonomy and innovation space, and
give full play to local initiative and creativity in
institutional reform and innovation.
 Third, strengthen laws and regulations and capacity-
building to provide support and protection for wider
opening-up. We should improve the domestic
coordination mechanism of international
macroeconomic policy coordination, strengthen the
organization and coordination mechanism of external
negotiations, and improve the efficiency of work by
raising the level of delegation of authority and
communication coordination. 
 Improve the third-party evaluation mechanism for the
reform of foreign-related economic management
system and major foreign-related negotiations;
vigorously strengthen the building of capacity to deal
with trade frictions, cope with the long-term and
regular trend of economic and trade frictions.
 4. Active and sound participation in global economic
governance
 To participate in global economic governance, it is necessary
to maintain strategic commitment and strive to win a longer
strategic opportunity and a favorable external environment for
domestic development. In order to promote the reform and
perfection of the global economic governance system, we can
select the fields in which the international cooperation needs
are urgent and match the strength and ability of China and the
actual needs, so as to promote the institutional voice of our
country.
 The existing systems and rules, which meet the needs of
the further development of economic globalization,
should maintain their authority and make good use of
them through reform and perfection. For example, the
multilateral system is indispensable to the sound
development of the international economic and trade
order, and a rule-based, open, equitable, transparent,
predictable, inclusive and non-discriminatory multilateral
trading system must be firmly upheld. Maintain the
construction of an open world economy and free trade,
improve its effectiveness and flexibility.
 Actively participate in the construction of a new mechanism
for international cooperation. We will constantly improve the
BRICS cooperation mechanism, actively promote the
implementation of development issues of concern to
developing countries and the post-2030 development agenda,
and actively promote the implementation of the new economy
and new models in the new economy and new development
agenda. Green development and other areas actively participate
in the formulation of global rules. It should be noted that there
is no need to start a new system, to challenge the existing
global economic governance system and economic and trade
rules, and not to engage in spheres of influence.
 5. Speed up the construction of a “community with a
shared future for mankind” with the focus on the
construction of “Belt and Road”
 The 19th CPC National Congress proposed "promoting
the construction of a community with a shared future for
mankind." It is the direction of human society to promote
the establishment of a just and reasonable international
order and to achieve lasting peace, prosperity and
stability. This will provide an important platform for
building a community with a shared future for mankind at
a critical historical moment in which the international
structure is readjusted and the global governance system
speeds up the transformation, and the construction of
"Belt and Road" will be accelerated.
 To promote new type of regional cooperation with "Belt
and Road" construction, promote the in-depth
development of economic globalization, "Belt and Road"
to guide China’s opening to the outside world, speed up
the construction of a new pattern of all-round opening-up;
Take the "Belt and Road" construction as a link, unite all
forces that can be united, expand the circle of friends,
maintain a more stable, close, and mutually beneficial
bilateral and regional economic and trade relations, and
expand new space for international cooperation.
 On the one hand, with facilities connectivity as a
priority area and trade and investment cooperation as
the focus, we will strengthen the "five links" with
countries along the routes, further expand the areas of
cooperation, enrich the content of cooperation, and
jointly create opportunities for development in order to
adapt to changes of the focus of global economic
growth shifted to Asia and emerging economies will
rise rapidly.
 On the other hand, with an open and inclusive attitude
and the principle of "consultation, contribution and
sharing", we attach great importance to the core concerns
of developed countries along the routes, as well as to the
development aspirations of emerging economies and
developing countries. We should deeply explore the
intersection of interests, promote international
cooperation in dealing with global issues and challenges,
strengthen the construction of mechanisms, and continue
to enhance mutual trust.
 To provide a new path for global cooperation
and development, to benefit the countries and
people along the routes, to promote regional
economic development, to provide new
impetus to the world economy, and to promote
the building of a community with a shared
future for mankind.
 Consider the following question
 Analyze trade between China and your
countries (present situation, including trade
volume, form of trade, etc.) and propose
measures to promote the bilateral trade.