Moderator: In his speech, President Xi officially announced to the world that China will take four major measures: the first is to substantially relax market access, the second is to create a more attractive investment environment, and the third is to strengthen intellectual property protection. The fourth is to actively expand imports. Regarding the first item, relax the market access of the service industry, especially the financial industry, to ensure that the major measures announced at the end of last year to relax the restrictions on foreign equity in the banking, securities and insurance industry are implemented; at the same time, accelerate the opening process of the insurance industry and relax the restrictions on foreign financial institutions. Establish restrictions to expand the business scope of foreign financial institutions in China and broaden the areas of cooperation between Chinese and foreign financial markets. Professor Sang, how should we understand cooperation in insurance and finance?
Dean Sang: In the past, China's financial industry was very weak in international competitiveness, and the management level and talent team of relevant banks were lagging behind. It was not until the early 1990s that China established two stock exchanges in Shanghai and Shenzhen. The number of employees was small, the overall management level of the fund industry employees was low, and the financial innovation ability was poor. During the development of the securities market, various black swan events have emerged, such as black-box operations, management chaos, speculation, and even becoming a casino. The insurance industry is also an industry that has just developed after the reform and opening up. In this context, China has chosen a path of gradual opening. Full opening of the relevant banking, securities, insurance and financial industries in China will not only face severe challenges from foreign companies in the same industry, but also cannot guarantee the healthy development of the market. Therefore, gradual opening is to allow foreign investment first, then increase the proportion of investment equity, and then relax the restrictions on investment in self-operated businesses.
Moderator: At present, China's manufacturing industry has basically opened up, and the remaining restrictions are mainly in a few industries such as automobiles, ships, and airplanes. Now that these industries have the foundation for opening up, the next step is to relax restrictions on foreign equity ratios, especially in the automotive industry. Why is the focus on the automotive industry?
Dean Sang: China's automobile industry has been booming over the years, and it is known as the "Wanguo brand" automobile market. Almost all the world's famous automobile manufacturers have established joint ventures in China. But for a long time, we have imposed restrictions on the proportion of foreign investment in the automobile industry. For example, foreign investors are not allowed to establish wholly-owned automobile enterprises, and joint ventures require China to maintain a controlling stake. At the time of its accession to the WTO, China promised to expand the share of foreign investment. At present, the highest equity ratio of foreign businessmen and Chinese companies in joint ventures to produce automobiles can reach 50%. The future development direction is to maintain the Chinese party's controlling share in the form of 50% of Chinese and foreign shares. Secondly, China's auto market has actually been highly open, and continuing to restrict the shareholding ratio is of little practical significance. Foreign capitals are unwilling to incorporate the most advanced technologies, and they are unwilling to invest in the Chinese market, which affects the normal development of the industry. Therefore, if foreign capitals have more opportunities to share the growth of the Chinese market, they need to relax the equity ratio requirements or even cancel the equity ratio. Restrictions, then some industries, under the stricter protection of property rights, can boldly invest in technology and have a better future. Third, thousands of foreign-funded companies compete with each other in the Chinese market, and they will not form the monopoly that some people worry about. Moreover, we have an anti-monopoly law, and we operate strictly in accordance with the anti-monopoly law. Naturally, there will not be a monopoly by a few or a few foreign-funded companies in the auto industry.
Moderator: With regard to creating a more attractive investment environment, President Xi made a special analogy that the investment environment is like air. Only with fresh air can attract more foreign investment. How do you understand?
Dean Sang: China has always made improving the business environment an important part of government work. Only a good business environment can attract more investors, expand the scale of market investment, and promote the continuous improvement of enterprise technology. In recent years, some research institutions in the world believe that China's business environment is deteriorating, and it seems that China no longer welcomes foreign investment. President Xi said that China will be committed to improving the business environment, just like providing good air to attract more investors. In fact, President Xi has already talked about the direction of improving the business environment in China, such as reducing administrative costs, speeding up the reform of the administrative management system, improving government efficiency, improving government services and management, and further reducing the overall cost of enterprises. For example, strengthening and improving the protection of intellectual property rights, seeking economic transformation and upgrading, taking the path of innovation, and developing into an innovative country. The protection of intellectual property rights is not only China's own needs, but also a requirement for the common progress of mankind. We have newly established the State Intellectual Property Office in the management system, demonstrating China's confidence in strengthening the protection of intellectual property rights. Only by strengthening and improving the system of protection of intellectual property rights will it attract investors with high-tech industries to invest in intellectual property research and development, and create more technologies and patents. In short, through the deepening of supply-side structural reforms, administrative system reforms will reduce administrative costs, capital market reforms will improve capital utilization efficiency, intellectual property protection will increase the speed of technological progress and increase the utilization rate of technological elements. , Improve factor productivity in all aspects, and promote the transformation and upgrading of China's economic structure.
Moderator: Regarding strengthening the protection of intellectual property rights, in our impression, some developed countries in the West have often used intellectual property rights for a long time, thinking that China's protection in this area is not strong enough. But this year, China has been advancing the protection of intellectual property rights both at the legislative level and the law enforcement level. At the same time, we also hope that foreign governments can strengthen the protection of Chinese intellectual property rights.
Dean Sang: Strengthening and improving the protection of intellectual property rights is the direction that the Chinese government has been pursuing over the years. A report released by the US-China Chamber of Commerce last year showed that China’s intellectual property protection has been effectively improved in recent years. Of course, China’s knowledge protection is not perfect, and there are still shortcomings. We are also aware of this. Therefore, from the identity of the chairman of the country, we announce to the world that we need to further strengthen and improve intellectual property protection and form a more effective protection system. China is a major patent country in the world. When Chinese patents are used abroad, they should also be effectively protected.
Moderator: Regarding the initiative to expand imports, domestic demand is the basic driving force for China's economic development, and the strong demand in the population market is the inevitable requirement to meet the people's growing needs for a better life. In the last part of his speech, President Xi specifically mentioned that China does not aim to pursue a trade surplus, and sincerely hopes to expand imports and promote the balance of payments under the current account. Professor Sang, as an expert in economics, you may have a more profound experience.
Dean Sang: Yes. With the development of China's economy, the per capita income level of Chinese society is increasing, and people's needs for a better life are becoming stronger and stronger. Chinese consumers are willing to choose more high-end, fashionable, healthy, and high-tech products to meet their needs. China's domestic supply cannot yet fully meet the requirements of upgrading the consumption structure. Therefore, we cannot do without imports. Therefore, we must lower the tariff level and further open the import market. We hope that the production technology of foreign high-end products can be exported to the Chinese market more. However, the export of high-tech products in some developed countries imposes restrictions on the Chinese market and affects the export of corporate products to China. This is actually a result of a lose-lose. On the one hand, the export of these countries with restrictions is affected, which may produce more On the other hand, companies cannot seize the opportunity of upgrading China’s consumption structure. China's expansion of imports can meet the requirements of consumption upgrades on the one hand; on the other hand, it will bring more market opportunities to enterprises in other countries. Therefore, if China's measures to reduce tariffs and expand imports are implemented, other countries can seize the opportunity to adjust their export management policies, which will achieve mutual benefit and win-win results.
In November this year, Shanghai will host the first China International Import Expo. China may be the first country to hold an import expo on a large scale. Through the government to build a platform, so that manufacturers from all over the world can show their export products and look for market opportunities in China. This is an important measure for the benefit of the world. We used to have the Canton Fair, and now we have the Import Expo, which will actually make more people feel China’s greater opening up. We hope that when trade is relatively balanced, all countries in the world can obtain more development opportunities under the conditions of trade globalization.
