The Theory and Policies of Mutual Benefit and Win-Win Strategy

The following sections are included:

• Dedication
• About the Authors
• Contents

The following sections are included:

• Foreword
• The Basic Connotation of the Mutual Benefit and Win-win Strategy
• Necessity of the Mutual Benefit and Win-win Strategy
• The Essence of the Mutual Benefit and Win-win Strategy
• The Guarantee for Implementing the Strategy

Reform and opening-up are two important trends in China’s economic development and social progress in the recent years. China’s opening-up started from specific areas and then gradually spread over the whole country. In the new century, China’s opening-up to the outside world reached a higher level. China’s development cannot happen without the involvement of the world, and vice versa. In other words, China’s opening-up has been deeply integrated into economic globalization. Hence, in the process of becoming an important country, China is at a critical juncture and needs to adjust its strategy of opening-up.

The following sections are included:

• The Basic Theory and the Definition of “Virtuality” of International Trade Interests
• Presentation of the Benefit “Virtuality” of China’s Foreign Trade
• Analysis of the Causes of China’s Trade Benefit “Virtuality”
• Modes and Countermeasures of China’s Sharing Foreign Trade Benefits

The following sections are included:

• Integration of the Theories of International Trade and International Direct Investment
• The Tendency of International Trade and Investment Integration and Its Development in China
• Potential Problems of China’s Foreign Trade and Foreign Capital Policies Under Trade and Investment Integration
• Targets and Measures of Coordinating China’s Policies on Foreign Trade and Foreign Capital
• Main reference websites

As a developing country, China, in implementing the opening-up strategy and participating in global competition, faces a big challenge, which is technical measures to trade. Not only are China’s exports blocked by technical measures to trade, but the establishment of technical measures to trade in the country is also very old-fashioned. In 2009, the total amount of national imports and exports was USD 2207.27 billion; the amount of exports was USD 1201.67 billion and the amount of imports was USD 1005.6 billion. In view of the reality that plenty of foreign products flow into China, while China has not yet established strict technical measures to trade, many questions arise. How to comply with the gradual weakening of global tariff and trade barriers? How can we make full use of related provisions of technical measures to trade under the WTO framework? How can the system of technical measures to trade be established in conformity with international standards and specifications and how can its consumers’ interests and national industrial development be protected? These are some of the questions to which the government and enterprises of China need to seek answers urgently.

The manner in which the mutual benefit and win-win opening-up strategy is reflected in China’s foreign investment policy is becoming the main problem of the utilization of foreign capital in the new phase. We must, on the basis of strengthening and expanding the existing open results, further perfect the foreign capital policy, further enhance the quality and the level of the open economy and make use of foreign capital. The technology spillover effect of foreign direct investment and its positive role and impact on economic growth exists and cannot be denied. In fact, technology spillover is the main channel for foreign direct investment to drive forward Chinese industrial technological progress. However, “nationalism in technology” is an indisputable fact at any time, and will not change for quite a long period in the future. In the 21st century, the contention of world political and economic interests has gradually transformed from the perspective of capital to technology, and international competition, to a great extent, deals with the competition at the level of science and technology and depends on the ability of research and development. As it turns out at home and abroad, it is impossible to try to improve the level of a country’s technology and to occupy a favorable position in international competition only through the introduction of foreign capital. For developing countries, it is important to take advantage of capital, but the key factors in determining the long-term sustainable and stable economic growth are technology, management, market and so on. In the new environment of expanding opening-up to the outside world, the following factors are of great significance both at the theoretical level and at the practical level of decision-making: How to understand the mechanism, the facilitation and the constraints of technology spillover of foreign direct investment in China, and what strategies can we adopt to bring the positive effects of technology spillover into full play? How to set up the pattern of technological progress that adapts to China’s enterprises, to enhance the capacity of domestic enterprises, technology absorption and re-innovation, thereby raising the level of China’s technology…

Anti-dumping measures, the fundamental principles established by the General Agreement on Tariffs and Trade in 1947, are used for protecting domestic industries from the damage of dumping. Inheriting this trade rule, the WTO has established a complete set of mechanisms of operations, regulations, arbitration, and safeguard for each member to regulate their domestic market competition orders and maintain the interests of business parties by using reasonable and legitimate means. For China’s future opening-up, it will be an important field that will throw light on how to use the powerful weapon given by the WTO to prevent multinational commodities from making significant push into the domestic market by using improper means and damaging the interests of China when China receives a large amount of foreign investment.

With the development of economic globalization and international trade, countries around the world have paid more and more attention to the conflicts between international trade and the natural environment, which is inseparable from the defects of the traditional international trade theory. Mainstream economists think that there still exists a defect in the traditional international trade theory due to historical limitations, as it merely pursues short-term and narrow comparative economic benefits and ignores long-term and generalized environmental benefits, especially ecological and environmental benefits. Thus, the current international commodity prices do not reflect or fully reflect environmental costs; so it results in price distortion, and then leads the trade structure, and industry tends to become irrational, which goes against the mutual benefit and win-win result as well as the sustainable development of the global economy…

With the acceleration of economic globalization and the reconstruction of the international industrial structure, trade in services has been significantly developed. Telecommunications, computer and information services, accounting, consulting, and other modern business services have been significantly developed, presenting a satisfactory momentum and gradually becoming the key areas of trade in services for the main countries that are engaged in worldwide trade in services. Meanwhile, with the strategic adjustment of transnational corporations and the rapid development of information technology, especially in the fields of computing, networking, and storage, service outsourcing is becoming a vital form of trade in services and an essential catalyst for the new wave of industrial transition worldwide. Under the influence of the global financial crisis, more transnational corporations are likely to outsource their non-essential businesses so as to increase their competitiveness with lower costs, which is expected to bring remarkable opportunities for China in such areas of business…

The following sections are included:

• Evolution of the Theory of Regional Economic Cooperation
• The Current Situation of China’s Regional Economic Cooperation
• Motivation of Regional Economic Cooperation in China
• China’s Strategic Goals and Modes for Becoming Involved in Regional Economic Cooperation

The following sections are included:

• Relative Theories and Influencing Mechanisms of the Regional Industrial Structure
• The Evolution and Interaction of the Industrial Structure of China, Japan, and R.O. Korea
• Analysis of the Mechanism of Adjustment, Upgrading, and Interaction of the Industrial Structures of China, Japan, and R.O. Korea
• The Strategy of China’s Joining the New Industrial Structure Adjustment in Northeast Asia

China’s foreign direct investment, which started in the early years of reform and opening-up, has reached a certain scale after more than 20 years. According to the “2009 Annual Statistical Bulletin of China’s Foreign Direct Investment,” which was jointly issued by the Ministry of Commerce, the National Bureau of Statistics and the State Administration of Foreign Exchange, China’s net foreign direct investment was USD 56.53 billion in 2009, of which China’s direct investment in Africa accounted for only 2.6%. By the end of 2009, China’s foreign direct investment stock was USD 245.75 billion, of which investment stock in Asia and Latin America accounted for nearly 90% while that in Africa accounted for only 3.8%. China’s direct investment in Africa has much room for growth…

Nowadays, the global economic structure is adjusting quickly, the rapid flow of the production factors among the adjacent areas makes capital, technology, information, and labor resources break the geographical constraints to achieve optimal transregional allocation, and the interdependence of the regional economy is being expanded. Complementary regional economic cooperation is the inevitable choice for each economy to achieve further development and promote industrial competitiveness. At the same time, it is also the inevitable requirement of its industrial structural adjustment. The mainland and Taiwan are separate customs territories, which are established respectively; the rapid development of their mechanical and electrical industries presents a state of integration driven by ECFA’s regional economic cooperation of trade and investment.

The following sections are included:

• Theories of Exchange Rate Regime, the Opening of the Capital Account, and the Effectiveness of the Monetary Policy
• China’s Exchange Rate Regime and the Current Situation of the Opening of Capital Account
• The Influence of China’s Exchange Rate Regime and Capital Account Management on the Effectiveness of Its Monetary Policy
• The Reform of the Regime of China’s Foreign Exchange Rate and the Opening of the Capital Account to Promote the Effectiveness of the Monetary Policy

The following sections are included:

• An Overview about the Internationalization of the RMB
• The Present Situation and Problems of the Internationalization of the RMB
• Cost-benefit Analysis of the Internationalization of the RMB
• The Real Conditions of the Internationalization of the RMB
• The Way Forward for the Internationalization of the RMB
• Choices of Strategies for the Internationalization of the RMB

The following sections are included:

• References
• Index
• Postscript