Source: Global Times Published: 2018-11-04
China's trade policy is shifting from excessive reliance on exports to a new emphasis on imports as the country finds new ways to stimulate consumption, a pillar of the domestic economy, experts said on Sunday.
In carrying out reforms to expand its imports, via moves such as holding the first China International Import Expo (CIIE), which kicks off on Monday, the world's second-largest economy is expected to share more of its massive domestic market with the world, experts noted.
The shift from exports to imports has been described as a kind of "import side reform" in a report released on November 1 by the Chongyang Institute for Financial Studies under the Renmin University of China.
According to the report, China is expected to import $24 trillion worth of commodities in the next 15 years while absorbing $2 trillion in overseas direct investment during the period.
Also, China will expand its import categories from energy and key facilities and parts, which constitute most of China's imports now, to other areas like high-technology products and non-agricultural primary products, according to the report.
Wei Hao, director of the Department of International Economy and Trade at Beijing Normal University, said that there are two factors behind China's drive to expand imports.
Internally, the Chinese economy is transitioning toward a high-quality growth model, where high-quality imports are needed to meet the demand of consumers and companies. "As the economy enters a new era of high-quality growth, there is a growing demand for high-quality goods, so we need to expand imports to meet that demand," Wei told the Global Times on Sunday.
He added that China's exports since joining the WTO in 2001 have benefited foreign consumers in many ways, but they "also created some problems" such as imbalanced trade.
"So this is also aimed at addressing the imbalance. By expanding imports, China is sharing its huge domestic market with the world and that is very conducive to the world economy," Wei said.
According to customs data released in January, China's US dollar -denominated imports surged by 15.9 percent on a yearly basis in 2017, while exports rose by 7.9 percent on a yearly basis.
Dong Dengxin, director of the Wuhan University of Science and Technology's Finance and Securities Institute, said that boosting imports can stimulate domestic consumption and also create benign competition for domestic industries.
"It will also help offset the possible negative impact of the ongoing US-China trade war on China's economy," Dong told the Global Times on Sunday.
An important measure of the government's import side reform is the launch of the CIIE, where more than 3,000 companies will offer products to potential Chinese buyers.
"This is the first time China is hosting such a large-scale import expo. It shows that China's pace of opening-up is becoming quicker. It's also proof of China's trade policy shift," Dong said.
Other measures include setting up a free trade zone in South China's Hainan Province, as well as cutting import tariffs on more than 1,500 products starting on November 1.
The Chongyang Institute for Financial Studies report also said China's financial market development will tilt toward the import side, as the government will gradually launch policies such as scrapping restrictions on overseas capital and enlarging the scope of foreign capital businesses in China, while further relaxing the foreign shareholding ratio of overseas securities, fund management and futures companies' investment in China.
Dong said that China will also speed up the export of financial services to help facilitate active overseas trade.