There is no question how much China's open trade has contributed to the Chinese economy. But beyond that, China needs to develop a more open, but well-designed trade policy regime. It requires the following:

• Building institutional capacities by building an "open but fair" trade regime, under which China should implement its trade commitments with open trade policies as well as taking greater responsibility to improve fair trade for both domestic and foreign businesses;
• Integrating environment protection and labor standards into trade policy making, which would not only contribute to sustainable economic development, but also increase China's global diplomatic legacy;
• Identifying a reasonable free trade agenda for trade in services; coordinating multilateral, regional and bilateral trade expansion at both the economic and strategic levels; and in particular, working with the United States and the EU for a pragmatic agenda on trade liberalization and dispute settlements;
• Forging an efficient business-centered, business-government relationship, which would allow industrial associations to function as market sectors and/or stakeholders in trade, and form a new type of commercial diplomacy relationship between enterprises and government agencies, and help businesses, and not hinder capital flows by providing transparent cooperative governance;
• Developing a comprehensive national trade strategy, focusing not only on trade negotiations but also on rules, regulations and institutions that affect trade and investment; Making commercial diplomacy work both at home and in overseas markets. A sound commercial diplomacy strategy requires sincere participation by both the government and the private sector as well as actions at both the economic and strategic level.

For years, the world has been working on the same research project: how to deal with a rising China. If open trade has worked well in the past, then "open but fair" trade will work better in the future. The era of "Made in China" businesses competing with each other overseas and ending up with antidumping duties should be over. The tax rebate model of trade growth is neither sustainable nor fair. Private businesses should repair their competitive strategies while the government should make policy adjustments to ensure fair competition.

Traditional trade theory is challenged today. Trade surpluses do not necessarily mean rising trade competitiveness and increasing hard power, while trade deficits do not necessarily mean less trade competiveness and declining hard power. Trade, competitive or not, will be judged by a nation's trade institutions, rather than balances of trade or volumes. The fact is, developed nations export value, while developing nations export volume. The former compete with institutional advantages, while the later compete with cheap labor.

Needless to say, there are no relationships today that are merely bilateral. All China factors are global. To integrate foreign policy and trade policy into economic policy will require institutional capacity building within China. The government should prioritize efforts to enhance domestic laws and regulations, build the transparency necessary for a level playing field and provide sound institutional support for business development.

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