Global shoppers benefit, domestic market fuels imports growth and opportunities for foreign companies

A glance at imported products on the shelves of even an average-size supermarket in Beijing invariably shows that shoppers have plenty of options.

From food and beverages such as fruit, meat, baby formula and wine, to other daily necessities, including clothing, products from around the world have become commonplace for countless Chinese consumers using bricks-and-mortar shopping venues.

Online, they are even more readily available－just the click of a mouse away.

The variety of global goods flooding into China is not only testimony to the nation's burgeoning domestic market, but also shows, in particular, how deeply the country has become interwoven with worldwide trade.

Gao Feng, spokesman for the Ministry of Commerce, said at an online media briefing on Thursday, "China will unwaveringly further high-level opening-up to share market opportunities with the rest of the world."

The nation would continue to reduce items on the negative list for foreign investment, and strengthen services and protection for foreign enterprises and related projects, Gao said.

With a constantly improving business environment governed by law that is up to international standards and market oriented, China hopes foreign investors will benefit from the country's growth dividends, he added.

Since joining the World Trade Organization, or WTO, in 2001, China has dramatically increased its exports to become the world's undisputed champion in this field.

Analysts said the nation provides global consumers with quality and cheap goods. At the same time, it continuously expands and opens up its domestic market to fuel growth in imports and provide more business opportunities for foreign companies with or without a presence in China.

They added that with its promise to further reforms and opening-up, China will continue to make a great contribution to global economic growth, especially at a time when industrial and supply chains worldwide are experiencing difficulties due to the COVID-19 pandemic.

Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, said, "China has benefited from its accession to the WTO, but more important, by joining the multilateral trading system, it has enhanced the operational efficiency of the world economy and improved the use of global resources, making a huge contribution to international economic growth."

China's accession to the WTO enabled the nation to incorporate its own resources, including labor, land and natural assets, to the global economy at a much deeper level and on a much larger scale, accelerating the nation's economic growth, Tu said.

Thanks to China joining the international institution, developed economies could reallocate and match their capital resources with labor and China's other resources to reduce product costs and enhance productivity, he added.

Ngozi Okonjo-Iweala, director-general of the WTO, said China has successfully positioned itself at the core of numerous global value chains. These production and trade networks have not only provided a lifeline for many countries during the pandemic, they have also increased the quantity, quality and variety of goods available worldwide, she added.

Okonjo-Iweala made the remarks via video link during a high-level session marking the 20th anniversary of China's accession to the WTO, held on the sidelines of the fourth China International Import Expo and Hongqiao International Economic Forum last month in Shanghai.

In November 2001, after 15 years of negotiations, the WTO formally approved China's entry as its 143rd member, which took effect a month later, making the WTO a truly international trade organization.

During the past two decades, China, which has different levels of development between regions, has made vigorous efforts to align itself with WTO rules, abide by them, and also to open its market.

It cut its overall tariff rate from 15.3 percent to 7.4 percent during this period, lower than the 9.8 percent accession commitment. The current tariff level is lower than those of all developing members of the WTO and close to those of developed members of the organization, according to the Ministry of Commerce.

The world's sixth-largest economy when it joined the WTO, China has risen to become the second-largest. It is also a major trade partner with more than 120 countries and regions, with total trade in goods soaring to $4.65 trillion last year, up from $509.8 billion in 2001, official customs data show.

The nation has opened some 120 subsectors in the services industry, compared with its accession promise to open 100, according to the Ministry of Commerce.

Imports expanded

Yi Xiaozhun, the WTO's former deputy director-general, praised China's contribution to the global economy through expanding imports.

Over the past 20 years, China has risen from sixth place in the world to first for its trade in goods, and from 11th place to second for its trade in services. It has also become the world's largest exporter and second-largest importer.

The nation's total trade value soared by 810 percent from 2001 to last year, compared with a 180 percent rise in overall global trade during this period, according to the United Nations Conference on Trade and Development, or UNCTAD.

With a population of 1.4 billion and a middle-income group of more than 400 million, China's annual imports of goods and services are valued at about $2.5 trillion.

Yi, who is also a former vice-minister of commerce, said: "Imports of merchandise to China leaped to $2.06 trillion last year, up from $244 billion in 2001. This is a significant contribution to the world economy, and one that is too often overlooked.

"China is one of the very few major developing countries which has committed to granting duty-free treatment for up to 97 percent of products made by least developed countries, or LDCs," he said. Since 2008, the nation has become the leading export destination for such countries, taking some 25 percent of their total exports, Yi added.

Li Xingqian, director-general of the Department of Foreign Trade at the Ministry of Commerce, said at a recent media conference in Beijing, "The world's second-largest importer for 12 successive years, China accounted for 11.5 percent of global imports in 2020, and the figure rose to 12 percent during the first half of this year.

"During the 14th Five-Year Plan period (2021-25), China will further emphasize expanding imports to benefit our trading partners, and also share development opportunities with the rest of the world."

Liu Jie, general manager of Optima Integration Group, a leading frozen products import service platform in China, said her company has witnessed how the nation's increased imports have benefited companies in this sector throughout the world.

"Our clients always say that China is a genuine advocate of opening-up and free trade. They say that it keeps its promise and has taken concrete action to open up its vast domestic market to foreign enterprises," Liu said.

The nation has not only reduced tariffs, but also continues to remove non-tariff trade barriers and adopt trade facilitation measures such as simplified customs procedures, Liu added.

She cited meat imports as an example. In 2001, China authorized only a few factories to export meat to its huge market. But now about 2,110 have permission to do so. In addition, it now takes only about 30 minutes using single-window customs services to clear meat imports, compared with several days in the past, Liu said.

"China has become the world's largest meat consumer. Its stable economic growth promises more opportunities for its trading partners," she added.

The nation's expanding imports have created more business opportunities for the rest of the world, and the China International Import Expo, held annually in Shanghai since 2018, is testimony to this.

An icon of the nation's opening-up and international cooperation, the expo has expanded, and the total exhibition area reached 366,000 square meters this year, with tentative deals totaling $70.72 billion.

Some 3,000 businesses from 127 countries and regions attended the event, including more than 280 of the world's top 500 enterprises.

A recent report shows a rise of 7.7 percentage points in the country's share of global imports from 2001 to last year, while those of major economies such as the European Union and the United States fell, except for South Korea, with a 0.4 percentage point rise.

The report was jointly released last month by the Business School and the China Institute of Education and Social Development at Beijing Normal University.

China's domestic market has become a stabilizer for the global economy and trade, the report said.

New opportunities

Analysts said China has resolutely expanded all-around opening-up and explored more efficient ways to connect domestic and foreign markets, and share production and resources. The nation's accelerated moves to expand market access for foreign investors and foster a business environment based on market principles, governed by law and reaching international standards, have ushered in a new round of opportunities for businesses worldwide, they added.

Allan Gabor, president of Merck China and managing director of Merck Electronics China, said foreign businesses have profited greatly from the country's economic rise, and about 98 percent of the top 500 companies in the world have invested in the nation.

"China is a strategic market for us, both in terms of its size and growth. Merck has been growing at double-digit rates in China for a couple of years now," Gabor said.

"I think people everywhere on Earth benefited after China opened up and joined the WTO," he added.

Like many other multinational companies, all three of Merck's business sectors－electronics, healthcare, and life sciences－continue to invest in China.

Gabor said the nation is on the right track to transform itself from a manufacturing center to a global innovation powerhouse, and Merck is constantly seeing new breakthroughs in innovation and technology in virtual reality, 5G and many other fields.

While businesses profit from China's efforts to open up, producers and consumers worldwide have also benefited to a wide degree from the nation's complete manufacturing sectors and increased exports.

Achievements vital

The importance of China to global production in most sectors, from precision instruments and industrial machinery, to computers and smartphones, has increased during the past two decades, according to UNCTAD.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said: "China has provided strong support to global trade thanks to growth in its industrial economy since its accession to the WTO. With stable prices of Chinese goods, the demands of global consumers are well satisfied.

"Chinese-made products have won market recognition with their advantages of high quality and low price.

"This not only benefits China with export income, but also encourages more countries to develop an export-oriented economy, which eventually accelerates product innovation through market competition to give the world economy a steady growth impetus driven by innovation."

According to a Federal Reserve Bank of New York staff report released in June 2017, and revised in July 2018, China's entry to the WTO led to a significant fall in variety-adjusted US manufacturing price indexes between 2000 and 2006.

For Chinese components of these indexes, one-third of the beneficial impact resulted from Chinese exporters lowering their prices, while two-thirds arose from the entry of new Chinese exporters.

China's WTO accession also led to other countries exporting to the US lowering their prices, which was partly offset by the exit of these exporters, the report said.

Yu Miaojie, deputy dean of Peking University's National School of Development, said China would remain the world's largest exporter.

"Although labor costs have risen in China, and its comparative advantage in labor-intensive industries is weakening, exports from capital-intensive industries, such as mechanical equipment and electrical devices, are growing and have replaced in importance those that are labor intensive," he said.

Zhang Jianping, head of the Center for Regional Economic Cooperation at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said China is becoming increasingly important to the global economy.

The nation has contributed to world economic growth in numerous respects since joining the WTO, including expanding exports to benefit global consumers, and facilitating expansion in developing countries through increased outbound direct foreign investment and international aid, Zhang said.

"As it furthers reforms, opens up and upholds multilateralism, China has built high-quality development platforms for the world economy," he added.

Zhu Tian, professor of economics at the China Europe International Business School in Shanghai, said China's "miracle-like" economic growth in past decades was mainly driven by its deepening reforms and opening-up, while joining the WTO was only a landmark event during this process, rather than a cause of rapid economic growth in the country.

"Opening-up brought to China advanced technologies and management practices from developed economies, improving productivity, technology and management, and eventually realizing rapid economic growth in the past decades," Zhu said.