SCIO briefing on Report on the Work of the Government
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E-mail China.org.cn, May 25, 2020
Huang Shouhong:
I'd like to add something. Mr. Sun Guojun said that the use of the COVID-19 bonds and fiscal deficit this year would be a reform and innovation that will go straight to the grassroots and directly benefit enterprises and people. As for the relation between employment and growth rate, Mr. Sun just said that under normal conditions, economic growth and employment had a corresponding relationship, but in an unusual time, this corresponding relationship will change. For example, in the first quarter, China's GDP lowered by 6.8%, but we added 2.3 million new jobs. The relationship between the economic growth rate and employment is very complicated and the two factors cannot maintain a corresponding relationship all the time. Employment lags behind and the fluctuations of the two factors do not correspond either. We should see that economic laws are different when under special conditions than during normal conditions. That's what I have to add.
CCTV:
Recently there have been talks across the world regarding the end of globalization, decoupling from China and evacuating from China. I'd like to get your opinion on these remarks. Another question is what China will do to stabilize the overall performance of foreign investment and foreign trade. Thank you.
Sun Guojun:
Whenever problems or frictions emerge in the global economy, economic arguments such as decoupling from China come to the fore. We should look at the big picture when discussing globalization. Globalization is a general trend. It is hard to imagine what the world would be like without the globalization of investment, trade and movement of people. In the long term, globalization is certain to bring benefits to each nation and all people. That is why the Chinese government unswervingly supports globalization. Small problems are inevitable in the process, but these will not halt the general trend.
There have been reports about outflows of foreign capital. Some foreign investments have even been moving out. As the economy develops, China's overall development has been improving and a country's comparative advantages differ in different stages of development. There are outflows of foreign capital, but there are also inflows of foreign capital. In the first quarter, our country attracted foreign investment contracted, but in April, we saw sound growth in foreign investment. We also saw that, many surveys, including the ones by some foreign chambers of commerce, showed that more than 70% of multinational enterprises are still bullish about the Chinese market and decide to make investments in the country. Enterprises see China's market as a long-term strategic investment. I think it requires strategic foresight to see this. We should base decisions on strategy and not be subject to the influence of petty remarks.
I think China has two advantages in this respect. After several decades of reform and opening up, it is fair to say that China has developed the only most complete industrial support system in the world. China is the only country that boasts all the 41 sections, 191 divisions and over 500 groups in the international standard of industrial classifications. It is the biggest trading partner of over 120 countries and its economic growth accounts for 30% of the world's total every year. So, it has a very big market in terms of the supply side. On the demand side, the domestic market is also growing. Either from the supply or demand side, anyone can be optimistic.
This year's Report on the Work of the Government attaches much importance to opening up. First, it makes clear that the Chinese government remains committed to further opening up despite the changing global economy and complex external environment.
Second, it also seeks to expand both exports and imports. On one hand, we need to promote market diversification. For example, our exports to Belt and Road countries now account for 30% of our total. On the other hand, we need to involve more market entities in import and export business. Supporting policies in finance and insurance will benefit more small and medium-sized companies in the foreign trade sector. More support will be channeled to new foreign trade businesses like cross-border e-commerce and new trials of trade in services.
Third, the Report on the Work of the Government also supports investment. This year, the negative list for foreign investment will be significantly shortened, and a negative list will also be announced for cross-border trade in services. Greater autonomy in reform and opening up will also be granted to pilot free trade zones. Both the manufacturing and service sectors will embrace further opening up.
Fourth, China is already seeing an improved business environment, and the Report on the Work of the Government again highlights the need to create a market-oriented, law-based, and internationalized business environment. Also, the Report on the Work of the Government stipulates the need to build a fair business environment in line with the international community. This is important as fair competition meets the demands of both foreign and domestic businesses. We will conduct impartial regulation to ensure fair competition.
Thank you.
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