Strengthening int'l cooperation & entrepreneurship as way forward

By Hamzah Rifaat Hussain

Chinese Vice Premier Liu He delivers a speech at the World Economic Forum Annual Meeting 2023 in Davos, Switzerland, January 17, 2023. [Photo/Xinhua]

At the World Economic Forum's annual meeting in Davos, China's Vice Premier Liu He said, the country is open to foreign investments, corporate collaborations and international cooperation to ensure that common global prosperity materializes.

As 2,700 participants from 130 countries convene to deliberate on the 2023 theme "Cooperation in a Fragmented World," sustainable re-engagements are strategies that can take both China and the international community forward.

Synergizing development is an integral part of Chinese President Xi Jinping's philosophy and his signature "common prosperity" vision. Vice Premier Liu said that common prosperity meant adopting goals that enable entrepreneurs and foreign investors to play acrucial role in social wealth creation amid rising income inequality and greater North/South economic divides.

Liu also stated that China's dual circulation development paradigm, defined as a policy that "takes the domestic market as the mainstay while letting internal and external markets boost each other," would reinforces each other and contribute to greater economic stability.

This development paradigm is a win-win for all stakeholders, strategic partners and countries who are wishing to resuscitate their domestic economies amid pressures from the Ukraine conflict and COVID-19 pandemic. Despite pandemic restrictions, China's economy managed to notch up to 3 percent in year on year expansion in GDP in 2022. There is potential to capitalize on that and as Vice Premier Liu alluded to, economic growth is expected to return to normal levels on the back of increasing imports, corporate investments and rising consumer spending to pre-pandemic levels. This potential is also anchored in promoting fair competition in the absence of anti-competitive practices, which benefits the international community and foreign investors.  

Data in 2022 also points to optimism for the future. There exists an enabling domestic environment for foreign investments to take hold. Contrary to myths and theories promoted by anti-China lobbyists in the United States, foreign direct investment (FDI) expanded by 14.4 percent year on year to nearly 1.09 trillion Chinese yuan (around $160 billion) in the first 10 months of 2022.

Furthermore, analysts consider robust FDI growth in 2022 to be based on the presence of complete industrial systems, a stable, vibrant society and strong economic fundamentals. Similarly, the range of areas that Vice Premier Liu spoke about while claiming that China will promote all-round opening up is also supported by trends witnessed in the service sector. Inflows for example jumped by 4.8 percent year on year while hi-tech industries surged by 25 percent.

China's opening-up strategy is gaining traction as a popular destination for foreign investors and entrepreneurs. What can also be confirmed is that there stands a commitment to deepen reform and push for greater modernization that will unleash new opportunities and promote greater momentum for international cooperation. According to Vice Minister of Commerce Sheng Qiuping, foreign businesses will enjoy greater opportunities in China's market, despite a world ravaged by rising protectionism and severe economic downturns. Therefore, greater opportunities are what is needed.

Vehicles waiting to be exported at a port in Lianyungang, east China's Jiangsu Province, January 13, 2023. [Photo/Xinhua]

With upcoming meetings scheduled with CEO's from finance, tech, consumer and industrial companies, both China and international investors, innovators and entrepreneurs can capitalize on positive trends and become an active part of the dual circulation model.

Additionally, the meeting scheduled between Vice Premier Liu and U.S. Treasury Secretary Janet Yellen in Zurich could yield fruitful results instead of the usual American zero-sum approach of demonizing China, its economic practices or its positive contributions to foreign direct investments. Instead, it's worthwhile to consider what China has done to contribute to global economic stability as mentioned by Liu at his special address to the World Economic Forum.

This includes prevention of systemic risks through drafting the Financial Stability Law that provides legal safeguards for defusing risks such as volatilities in the capital market. Also, the national economic philosophy is guided by a commitment to green development, anti-monopoly practices and targeting the growth of human capital. The importance placed on equity and opposition to protectionism is also part of the mission. Furthermore, eschewing polarization and upholding the international economic order would be prioritized nationwide.  

Hence, the message at the World Economic Forum is clear. There is plenty to gain from international cooperation, investments and entrepreneurship.

The author is a former visiting fellow at the Stimson Center in Washington and former assistant researcher at the Islamabad Policy Research Institute.