Wider opening-up a strategic choice for China

BEIJING - Wider opening-up is a strategic choice for China as the country shifts its growth model to pursue high-quality development, experts said.

China recently announced a series of opening-up measures including allowing foreign brokers to hold a majority stake in securities joint ventures.

Following the announcement of the measures, foreign investors are racing to expand their presence, with big names including JP Morgan and Nomura applying to set up holding firms in the country.

Attracting foreign investment is very much in line with China's supply-side structural reform, which calls for higher-quality resources, said Yang Changyong, a senior researcher from the Chinese Academy of Macroeconomic Research.

Since China began reform and opening-up four decades ago, foreign investment has created an important boost for economic growth.

Foreign direct investment (FDI) in the Chinese mainland rose 7.9 percent to reach 878 billion yuan ($138.6 billion) in 2017, an all-time high, official data showed.

As China transitions from high-speed growth to high-quality development, the quality of foreign investment should also be improved, Yang said.

The service sector, which accounts for an increasing share of the economy, has much potential for further opening-up, as China could make good use of foreign expertise in areas including healthcare and education, according to Yang.

Easing foreign equity restrictions in manufacturing sectors such as automobiles and aircraft is also in accordance with the country's goal to optimize resource allocation and increase the supply of high-quality goods, he said.

To attract more high-quality investment, China should create a more encouraging environment, with mechanisms such as the negative list approach to be pushed forward, he said.

China has also pledged to enhance the protection of intellectual property rights, a voluntary step taken in accordance with its commitment to the World Trade Organization (WTO) and aimed at improving the socialist market economy, Yang said.

Expanding imports, another key policy initiative in the country's opening-up pledge, is the right choice for China as it aligns with the trend of consumption upgrading, according to Li Dawei, a researcher with the Chinese Academy of Macroeconomic Research.

As people's incomes increase, the demand for healthy food, healthcare products, and creative cultural goods is showing rapid growth, and imports in these fields will meet such demands, Li said.

The expansion of imports of production factors including advanced equipment and energy resources will improve the country's production efficiency, Li said.

The implementation of such policies requires multilateral cooperation, according to Li. On one hand, China could further cut import tariffs on goods including automobiles, drugs, and cosmetics in accordance with WTO rules.

On the other hand, countries around the world, especially developed economies, should ease restrictions on high-tech exports to China, so that they can grab a share of the world's most promising market, Li said.