The 86th International Forum on China Reform with the theme of “High-level Opening-up China and the World” was hold on November 14-15 in Haikou of China's Hainan province. The event was hosted by China Institute for Reform and Development(CIRD). Mr. Helis was invited by the president of China Institute for Reform and Development(CIRD) Mr. Chi Fulin, and also gave a speech in terms of the High-level Opening Up and Dual Circulation.
High-level Opening Up and Dual Circulation
Ladies and gentlemen, honourable guests,
It is with great pleasure that I am speaking to you today here in the beautiful city of Haikou. I am also delighted that I can join you in a real, offline event instead of just another webinar that I have been speaking at this year. Because While we are already taking this freedom for granted, a large part of the world has unfortunately gone into another lockdown with COVID.
“China leads again!” that was the title of a recent article by the former chairman of Morgan Stanley Asia - Stephen Roach. In his words China led the world out of recession after the global financial crisis in 2008, and now will lead again in the next few years by providing the largest growth by any global economy. In suppressing the virus, China has been able to recover faster than others. My friend, the HSBC co-head of Asian economics research Frederic Neumann, pointed out that China is "holding up the world" in terms of GDP after it achieved an expansion of 4.9% in the third quarter. According to the IMF, China is likely to be the only country to register positive growth in 2020 and is projected to deliver more than 8% growth in 2021. These ‘mere’ 8% China growth will be around 60 per cent of global growth. A staggering number, a huge responsibility, but of course also a tremendous opportunity for whoever manages to partake.
And how to partake? The buzz word of dual circulation is in the air. While it is actually a positive initiative – in the foreign press it creates anxiety and confusion. Does it mean decoupling? Does it mean less opportunities for foreign companies in China? In fact, it means the opposite, and is a healthy initiative. Why? Because it encourages the increase of domestic spending. Domestic spending accounts for just 38% of the Chinese economy, which is one of the lowest shares in the world. In other large emerging countries like India, Brazil and South Africa, the consumer share is 55% to 60%, as is also the case in most advanced nations. The trend of improvement of the inner circulation is not new, only that it is now put into words. A good example is a statistics from the American Chamber. My friend Harley Seyedin the president from the American Chamber in South China put it well into a statistical comparison that was published in the special report of the business in South China 2020: in 2003 their members produced 77% for export and 23% for the domestic market; in 2020 this ratio was almost the opposite, with now 71% producing for the domestic market. In China for China is the slogan!
In Guangzhou Huangpu, where I work as the Chief Advisor for the Investment Promotion Department, we too took some steps to encourage more spending especially shortly after the lockdown. One was the promotion of online sales, such as life streaming on pinduoduo, where I for example promoted goods in front of an audience of 200 Thousand. Even our Huangpu district mayor promoted goods made in Huangpu. So dual circulation is happening.
Which brings me to the 2nd topic: high-level opening up.
While I have been living in China for the last 18 years, the last 8 years I have been working in government relations, first as the General Manager of the German Industry and Commerce, part of the German Chamber in China. From 2017 till last year I served as the Vice Chair of the European chamber in South China. Already during that time, I could observe improvements in the challenges raised by the various chambers. One example is IP protection. In August this year, the British Economist Magazine reported, I quote: “Last year Chinese courts accepted more than 480,000 intellectual property cases, nearly five times as many as they did in 2012, with some going to a new national court devoted to the area. Foreign plaintiffs won 89% of all patent infringement cases, according to Rouse, a consultancy.” [end of quote] There are actually three IPR courts in China, in Beijing, in Shanghai and in Guangzhou Huangpu, where I am the Chief Advisor for investment promotion.
And this is probably also quite a striking example of further opening up: Me, A Laowai, a German working for the local government, working for one of the most successful economic districts in China. Guangzhou Huangpu Development District. Huangpu realised that because it has a lot of foreign invested companies, it needs to find ways to better communicate with them. Through hiring a foreign expert, we have been trying to build up better communication with foreign companies, both in Huangpu and those that are planning to come.
In addition, since March this year we have established our Europe office in Heidelberg/Germany, right in the heart of Europe. There, our Director Europe Dr. Frerichs helps us reach out to the best European companies and see whether we can help them to enter the lucrative China market. This has proven a very good decision, especially now during COVID19. Because our director could still travel, while we had to stay here.
But don’t get me wrong. Staying in China, such a large, amazing country, also has its many benefits. In fact, only five weeks ago I was in Haikou, concluding my one week/670km cycling trip through half of the beautiful island. At that time not in suit, but sweaty shirt and shorts.
Ladies and Gentlemen, may I conclude with a wish. My wish is that we can communicate China’s achievements better. We need to find ways to gain the trust and get our message across. We foreign experts are happy and able to achieve this goal together.
I wish everyone a stimulating conference, good talks and fruitful exchanges. Thank you!