China’s dual-circulation development paradigm will create more space for the growth of multinational corporations in services, innovation-driven areas and businesses related to digital empowerment, according to the report titled Multinationals in China: New Opportunities Arising from a New Paradigm, released by the Beijing-based Chinese Academy of International Trade and Economic Cooperation (CAITEC) under the Ministry of Commerce (MOFCOM). The government’s move to accelerate the effective integration of domestic resources has already persuaded global companies to invest in high-tech sectors in China.
In response to the dual-circulation paradigm, MNCs are also keen to increase their spending in areas like industrial upgrading, rural revitalization, regional coordination and green development, in order to maintain robust growth of their operations in the country, the report stated. China’s dual-circulation recognizes the domestic market as the mainstay, with the domestic and foreign markets reinforcing each other. CAITEC released the report during the two-day second Qingdao Multinationals Summit in Qingdao, Shandong province. Under the new paradigm, China will strive to expand the opening-up policy, which was so far seen in the flow of goods and factors, to institutions as well, in the context of rules, regulations, management and standards. Efforts will be made to build an institutional system and regulatory model in line with international norms, and further shorten the negative list for foreign investment, said the report.
With the gradual opening up of the domestic sector, overseas firms have achieved significant development in China and made considerable contributions toward modernization of domestic circulation through demonstration projects, said Gu Xueming, President of CAITEC. “As China’s domestic economy is crucial in ensuring global supply and meeting diverse demands, multinationals have more room to expand imports and exports,” he said, noting MNCs are proficient in optimizing the import mix and improving the quality of exports by leveraging their global brands, market networks and other resources, so as to boost the steady development of foreign trade.
While China’s foreign trade amounted to CNY18.07 trillion in the first half of this year, the value of exports and imports of foreign-invested companies rose 19% year-on-year to CNY6.61 trillion, according to the General Administration of Customs. Some CNY1.46 trillion of China’s foreign trade volume was contributed by 30 leading global companies, indicating they are an indispensable part of supporting the nation’s exports and imports, said GAC Vice Director Wang Lingjun. Chen Chunjiang, Director General of the Department of Trade in Services at MOFCOM, said FDI in China has been directed toward high-tech businesses and was mostly services-oriented in recent years. This has played an important role in optimizing and upgrading China’s industrial structure. China’s actual use of foreign capital surged to CNY607.84 billion in the first half of this year, an increase of 28.7% year-on-year and a 27.1% rise over the same period in 2019, the China Daily reports.
