May 24, 2022
BEIJING – The efforts to build a unified domestic market will help China’s industrial and supply chains as well as local and foreign enterprises operating in the country to better deal with challenges like the COVID-19 pandemic and geopolitical uncertainties, experts and company executives said.
A unified domestic market that features efficient production, distribution, circulation and consumption of goods and services is also conducive to boosting the weight of China’s industrial and supply chains in the global arena, and bolstering the competitiveness of its manufacturing sector.
Building a unified domestic market will promote China’s economic growth, and help domestic companies better deal with economic and geopolitical headwinds and external uncertainties.
Peng Bo, a researcher of the Chinese Academy of International Trade and Economic Cooperation
That is the consensus among experts after China released a guideline in April on accelerating the establishment of a unified domestic market that is efficient, rules-based and open and encourages fair competition.
Peng Bo, a researcher of the Chinese Academy of International Trade and Economic Cooperation, said in recent years, notable progress had been made in building a unified market and promoting fair competition. However, there is still room for improvement in removing market segmentation and overcoming local protectionism.
According to Peng, optimizing the domestic market can help Chinese companies better compete in the global arena. “Currently, the industrial chains and global trade are shifting from being focused on efficiency to according priority to security. Building a unified domestic market will promote China’s economic growth, and help domestic companies better deal with economic and geopolitical headwinds and external uncertainties.”
A unified domestic market will also enhance the international community’s ability to cope with risks. By getting through the blockades of domestic production and ensuring the smooth flow of goods, capital and information, there will be an increasing supply, which will greatly ease the pressure in the world’s industrial chain and supply chain, Peng said.
Han Jianfei, deputy director of the Institute of Industrial Economics of CCID Consulting, a market research firm, said building a unified domestic market will attract global resources to China, and domestic and international markets will be better connected. Regulations and standards will become more compatible and China’s dual-circulation development paradigm will be enhanced.
“Currently, the world’s most scarce resource is the market. Building a unified domestic market will entail efforts to further reduce the restrictions on foreign investment in some regions, which will help further expand opening-up, attract foreign investment, allow more countries and foreign enterprises to share China’s economic development dividend and boost the influence of its industrial and supply chains in the world,” Han said.
Employees of SAIC Motor Passenger Vehicle Co’s Lingang plant in Shanghai inspect automobiles at the assembly workshop on April 23. (ZHU XINGXIN / CHINA DAILY)
Sensing the opportunities ahead, foreign companies are ramping up their push to explore or expand in the Chinese market. Frank Meng, chairman of Qualcomm China, said: “The superior stability, consistency and continuity of China’s policies, along with the market environment where all companies, Chinese and foreign, are treated equally and engaged in fair competition, is an important guarantee for our rapid growth in the country.
“Like many domestic and foreign companies that have benefited from the continuously improving business environment in China, we are increasing our investments, expanding our presence and growing our list of partners in the country.”
He further said China has attached great importance to the development of its digital economy and positioned this as a national strategy, which promises even greater growth potential for the whole mobile ecosystem.
According to Meng, the company will continue to support China’s ecosystem in wireless communication, smart devices, internet of things, artificial intelligence and the automotive sector through a series of programs like the”5G Pioneer Initiative “and “5G IoT Innovation Initiative”.
US tech heavyweight Microsoft Corp is also eyeing the Chinese market for long-term growth potential as a unified domestic market promises better business environment.
Hou Yang, chairman and CEO of Microsoft Greater China, said in an earlier written interview, “We are particularly interested in China’s integration of domestic and international trade, which aligns well with Microsoft’s strategic aims to assist more domestic enterprises to extend business overseas and for foreign enterprises to extend their businesses in China.”
In March, Microsoft unveiled a new data center region in North China, the biggest one it has in the Chinese market so far, which highlighted its long-term commitment to the market. The move also meant that Microsoft’s cloud computing capacity in China, the world’s fastest-growing public cloud market, has been boosted twelvefold since 2014.
“This year, China will continue to be an engine driving global recovery, and technology innovation will certainly play a critical role, accelerating the development and spread of China’s digital economy and providing significant opportunities for technology companies such as Microsoft to contribute,” Hou said.
A pandemic prevention worker collects a nucleic acid test sample from a truck driver at the exit of a highway toll station in Liuzhou, Guangxi Zhuang autonomous region, on May 11. (LI HANCHI / XINHUA)
Fang Ying, president of Ericsson China, said the Swedish company, which has been in the Chinese market for 130 years, is always optimistic about the prospects of the Chinese market and is willing to make long-term investment for long-term returns. In the past five years alone, Ericsson’s total investment in research and development in China has exceeded 15 billion yuan ($2.22 billion).
“Ericsson will continue its commitment to the China market and actively participate in the construction of digital economy and sustainable development in China with advanced technology, global resources and successful practices,” Fang said.
Zhao Xiande, professor of supply chain management at China Europe International Business School, said the efforts to build a unified domestic market can improve the operational efficiency of China’s industrial and supply chains, promote industrial upgrade on the supply side and improve the experience of consumers on the demand side, thereby ensuring smooth “internal circulation”.
The improvement of the domestic industrial and supply chains will also improve the global competitiveness of Chinese products, and the unified domestic market will also win the favor of more overseas companies, thus ensuring smooth “external circulation”, Zhao said.
According to him, a unified domestic market will break down barriers, create conditions within the logistics industry across different regions and different transportation modes, and between logistics and other industries, which can help ensure smooth logistics in both normal and extraordinary conditions.
The recent resurgent cases of COVID-19 in Shanghai, for instance, have disrupted logistics to some extent, which highlights the need to build a unified domestic market with a logistics sector that is highly unified and standardized, Zhao said.
To safeguard the stability of industrial and supply chains, the Ministry of Industry and Information Technology, the nation’s top industry regulator, had announced a string of measures to overcome bottlenecks in industrial production and logistics.
Xin Guobin, vice-minister of industry and information technology, said the ministry has helped key companies resume work, and most of the enterprises engaged in the four areas, to wit: medical supplies for epidemic prevention, necessities of people’s livelihood, important agricultural materials, and strategic emerging sectors such as automobiles and semiconductors.
“We will go all out to ensure the smooth circulation of industrial and supply chains. That is the primary task to stabilize industrial growth,” Xin said, adding that the ministry will ramp up efforts to implement policies such as reducing burdens on enterprises and helping small and medium-sized enterprises better withstand the fallout from the pandemic.
He Dengcai, vice-president of the Beijing-based China Federation of Logistics and Purchasing, said industrial product logistics accounts for 90 percent of China’s total logistics, and smooth operation of logistics is of high importance to maintain industrial production.
“A unified domestic market will help keep the logistics industry running smoothly across regions, which is one of the keys to ensuring the stability of industrial and supply chains in both normal and extraordinary conditions,” He said.