How can China construct a modernized economy?

The report to the 19th National Congress of the Communist Party of China (CPC) held last October in Beijing clearly states that China's economy has shifted from a high-speed growth to a high-quality development stage. The world's second-largest economy is now going through a critical period of changing its development model, optimizing its structure, and transforming its growth drivers. Developing a modernized economy is an urgent requirement to get us smoothly through this critical transition.

When General Secretary of the CPC Central Committee Xi Jinping elaborated on "building a modernized economy," he proposed the general requirements of "expanding foreign trade, cultivating new types and modes of international trade, and promoting the construction of a strong trading nation".

First of all, the basic task of building a comprehensively modernized economy is expanding the real economy sector that focuses on advanced manufacturing. Only in this way can we create a solid foundation for China to become a “global manufacturing giant".

Moreover, we must rely on implementing innovation-driven development strategies. The competition in international trade comes down to quality, brand, and innovation now.

Chinese enterprises must cultivate advantages in product quality centered on technology, brands, and services; use innovation to enhance competitiveness; and gradually grasp the international pricing power so as to create a global value chain.

Besides, China has to speed up the improvement of market economy system since it is a basic institutional arrangement for developing a modernized economy. Foreign trade management reform needs to be deepened and high-level trade and investment liberalization and facilitation policy should be implemented.

Shang Bing, chairman of China Mobile, speaks during Creating a Better Service Provide conference, at the Mobile World Congress in Barcelona, Spain, February 26, 2018.

The new types and modes of foreign trade mainly include cross-border e-commerce, market procurement trade and comprehensive foreign trade service platform. Cross-border e-commerce is a new growth source for China's foreign trade. Market procurement trade enhances the function of the traditional commodity market. The comprehensive foreign trade service platforms help small- and medium-sized enterprises to achieve professional and standardized operations in an international business environment, and significantly reduce their transaction costs.

In order to actively encourage the development of these new trade modes, on the one hand, China needs to promote the construction of cross-border e-commerce public service platforms; upgrade financial services; improve logistics, supply chain services and facilitate enterprises to carry out cross-border e-commerce business. On the other hand, we should gradually expand market procurement trade to more fields which integrate functions of market procurement, e-commerce, convention and exhibition, and modern logistics.

Containers are being transported at Nansha port in Guangzhou, south China's Guangdong Province, June 26, 2014.

In addition, it is necessary to further cultivate and support enterprises with strong capabilities and to build an all-round service platform for foreign trade. Meanwhile, the governments must deepen reforms to create a friendly environment for new types and modes of foreign trade. They should conduct in-depth studies on these new business modes and new economic phenomena such as global value chain management, cross-border e-commerce, and service outsourcing. It is also important to timely adjust regulatory concepts, supervisory procedures and management.

It is also significant to build up close and clean government-business relations to develop a modernized economy in the new era. To consolidate the public-owned economy, all the while encouraging, supporting, and guiding the development of the private sector, it is conducive to form a pattern of fulfilling their responsibilities and seeking common development.

The establishment of a new type of close and clean government-business relationship will help bring entrepreneurship into full play and guarantee better and faster development of enterprises. It helps to clarify the boundaries between the government and the market, create a fair and orderly market competition environment, and improve the market economy system. Such new type of close and clean government-business relationship will be in favor of a healthy atmosphere in which entrepreneurs are respected and willing to apply new technologies, innovate business models, and continuously accumulate and upgrade their core competitiveness.

This article is adapted from CGTN, and is not what APD stands for.

(CGTN)