Chinese President Xi Jinping has just addressed the World Economic Forum Davos where he told conference attendees that China is open to the world but that more importantly, that China has much more to offer the world than the European elites who typify the Davos summit tend to understand. In order to grasp the nature of the growth and innovation revolution that Xi Jinping is bringing to China, one must turn to a substantial address made by the Chinese President before the annual Central Economic Work Conference in Beijing. It was there, in December of 2017, where Xi offered epoch defining proclamations related to the official Xi Jinping Thought on Socialist Economy with Chinese Characteristics for a New Era.
Prior to Xi Jinping, Deng Xiaoping’s thought helped propel China into a position to take its role as a leading economic and industrial superpower in line with Deng’s idea of Market Socialism. Xi’s thought seeks to continue this progress while adding original reforms designed to transform China’s industrial might into an even more diversified set of goals.
The chief goal that Xi discussed at the Central Economic Work Conference was transforming the “made in China” moniker to one of “created in China”. China seeks to become a world leader in hi quality manufactured goods as well as in the scientific, creative and innovative process that goes into pioneering new technologies. In this sense, Xi is spearheading a revolution in 21st century invention with Chinese characteristics.
While hardly published in western media, over the last ten years China has been making strides in the production of high quality electronic and automotive goods. Many Chinese brands in the coveted audio and video sector can already be found throughout the world, including in the United States, although for the time being, they lack the promotional presence of rival Japanese, US and EU brands.
While many of the components of the world’s leading computer, table and smartphone brands are manufactured in China, in short order, existing technologies will be competing on a global level with Chinese brands featuring unique hardware, software and design features. Likewise, while Chinese cars and trucks, including luxury vehicles are already being sold in ever greater numbers domestically and throughout Asia, just as Japan was comparatively late to the luxury car market that had traditionally been dominated by Germany, the US, UK and France, China too will soon be offering vehicles for sale to rival major brand names including BMW, Jaguar, Cadillac, Audi and even Mercedes-Benz.
XI Jinping’s increased commitment to innovation and quality production in China is in-line with the overall economic trends of Chinese prosperity creating increasingly high wages for Chinese labourers. China is no longer the low-wage/high-volume economy it once was. The China of today actually has wages that typically run higher than those in other parts of Asia, much of Latin America and parts of southern and eastern Europe. Consequently, it is only natural that China would progress to create goods that are more specialised, of increasingly premier quality and based on domestic designs and innovations.
This reality means that those who seek to deride China’s economic progress will have to find a new narrative, while justifying the fact that while innovation in neo-liberal economies tends to mean a loss of jobs, income and wealth among working and middle class citizens, in China the opposite is true. This is because the managed nature of market socialism allows for wealth generated in terms of aggregate national efforts which can be re-invested in the Chinese people. This is a further reason why increased automation will not negatively impact China in the way it already affects traditional neo-liberal economies. At the same time, China is feeling the increased confidence and general self-sufficiency to open up internal markets to foreign investment.
China’s Xinhua news reported the following based on the official report from the Central Economic Work Conference
“As the major driver and stabilizer of the global economy, China will push forward a new pattern of all-around opening up to pursue mutual benefits with the rest of the world, according to the statement.
China will increase imports and cut import tariffs on some products to promote balanced trade, it said.
Free trade zone pilot areas will be expanded. Effective guidance and support will be given to outbound direct investment.
The country will also push for nationwide implementation of a pre-establishment national treatment system as well as a negative list that determines where foreign participation is prohibited or limited.
The negative list will become shorter and shorter, it said, adding that the country will improve laws and regulations on foreign investment and enhance protection of intellectual property rights.
Chinese leaders have reiterated that the country will not close its door to the world, and that the door will only become more and more open”.
China is opening up its economy in line with the goal of a global trading/commerce network i.e One Belt – One Road designed to take advantage of the strengths of each participating national economy, while allowing the easy flow of both raw materials and finished goods into economies that cannot produce such things domestically.
This phenomenon fits in with the “win-win” goals of Xi Jinping who seeks to allow countries to retain their sovereign characteristics and decision making, while allowing innovation and commerce to create collective benefits for citizens of an increasingly interconnected world.
For countries such as the United States whose foreign policy is designed to retard China’s progress, the US will have to think of new terms in which to phrase its rhetoric against China.
China is no longer the low-wage/high-volume monolith of yesteryear. It is rapidly becoming and in many areas has already become the high quality, innovation heavy production powerhouse that will soon be leading the world through the next digital revolution.