What are China's foreign trade advantages?

News Summary: Foreign direct investment has helped China create new trade advantages. This is manifested in two ways: first, it breaks through the constraints of China's factor endowment at the current stage, and improves the efficiency of the traditional advantageous sectors.

FDI has helped China create new trade advantages. This is manifested in two aspects: First, it breaks through the constraints of China's current stage of factor endowment and improves the efficiency of the traditional advantageous sectors. Over the past 20 years of opening up to the outside world, China has accelerated the pace of its entry into the investment-driven growth stage through the large-scale introduction of foreign direct investment and the advanced manufacturing technology and management that go with it. At this stage, competitiveness is not expressed primarily in the relative prices of certain factors, but in the efficiency of producing standardized products. China's current trade competitiveness stems both from international differences in certain factor endowments and from the increase in labor productivity brought about by increased investment, especially increased foreign direct investment (FDI). The combination of the two has enabled China to enjoy unique cost and efficiency advantages in the production of certain standardized bulk manufactured goods, and gradually develop into the world's processing plant.

Second, it has helped establish a diversified pattern of export-oriented, labor-intensive industries in China. China's traditional export strengths are concentrated in labor-intensive sectors such as apparel, shoes, and toys, but the export growth potential of these sectors is severely constrained. Cultivating more export industries is a guarantee of sustained growth in China's export trade, and realizing such a breakthrough relies first and foremost on foreign direct investment (FDI). FDI has helped build and nurture more sectors that China did not have the capacity to export on a large scale, such as information technology products and consumer electronics, giving these sectors the ability to connect to international supply chains in a short period of time, and expanding the scale of low-wage employment in these sectors and the scale of exports. The rapid expansion of these non-traditional export sectors has effectively alleviated the pressure on traditional labor-intensive sectors to expand exports, and safeguarded the continued development of China's exports.?

With the transformation of China's economy from quantitative expansion to quality and efficiency, China's policy of utilizing foreign capital is bound to be adjusted. First of all, we should adjust the preferential policies, cancel the policy preferences for foreign investment in the general processing industry, and formulate support policies for projects rather than industries, especially to encourage advanced technology, technology spillover benefits of significant projects; secondly, we should strictly limit the entry of high-pollution and high-energy-consuming projects into China; thirdly, the policy orientation gradually to create a level playing field for domestic and foreign enterprises to change, and abolish all the policy barriers to fair competition; fourthly, we should focus on the service sector trade, to ensure the protection of exports. Fourth, focus on the utilization of foreign investment in the field of trade in services, open the market in an orderly manner, and enhance the level and international competitiveness of China's service industry.