Rejuvenating Silk Road. Trade in West China

Transcription

1 Rejuvenating Silk Road Trade in West China 1

2 World Trade Organization and Great Opening of the West GOW must first of all mean to strive hard to greatly open up the west to the outside world. Only if the west is allowed to march towards the world, will it be able to establish an adequate development mentality, to absorb the inflow of international factors of production, and to raise the overall quality through the global exchange of information. -- Long Yongtu ( 龍永圖 ), China's chief WTO negotiator WTO free trade regime vs GOW preferential treatment 2

3 Attempts to internationalize RMB reduce reliance on USD in international transactions and clearance 3

4 Role of trade in most West China PLJs (Central China as well) is limited Xinjiang is most dependent on trade in West China 4

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7 Slight drop in the share of export from West China during GOW (Source: Deutsche Bank Research, 2013) 7

8 Limited share of West China trade in national market 8

9 China's trade surplus PRC International trade balance (2011): +USD183b PRC trade balance with US: +USD273b Net balance without US: - USD90b China s share of light manufacturing imports in developed countries declining 9

10 Absolute amount of FDI on the rise but still lagging behind coastal region (Source: Deutsche Bank Research, 2013) 10

11 Main proportion of FDI still went to coastal region (Source: Deutsche Bank Research, 2013) 11

12 Once Ambitious FDI Plan of Chongqing under Bo Xilai RMB5b infrastructure upgrades to lure firms Yuzhong District ( 渝中區 ) Huge boulevards Enormous gardens (beautification project) A batch of six-star hotels Goals (according to Chongqing Business News) Become the prime choice of Fortune 500 companies looking to establish their Chinese headquarters Attract of the world s biggest companies in 3 years 12

13 Yunnan: China s Strategic Outpost in South Asia 13

14 Strategic positioning of leadership (Li Jiheng ( 李紀恆 ), Governor of Yunnan) Yunnan Province aims to grow into a trade hub in Southeast and South Asia and a major manufacturing base for China s export-oriented industries Two dimensions Cross-border trade Sub-regional economic cooperation Yunnan and International Trade 14

15 Yunnan in China s Cross-Border Trade 3 neighbouring countries as principal trading partners Myanmar (1 st trading partner): Over USD2b (2011, +18%) Vietnam: USD1b Laos: USD270m Mainly through 3 border open cities / ports of entry ( 口岸 ) Ruili 瑞麗 and Wanding 畹町 (with Myanmar) Hekou 河口 (with Vietnam) Sub-regional economic cooperation Bangladesh-China-India-Myanmar (BCIM) construct To be discussed again in China and Southwestern Neighbours 15

16 Guangxi and Regional Economic Cooperation 16

17 China-ASEAN Free Trade Area (CAFTA) Launched 2010 China and all 10 ASEAN member states 3 rd biggest FTA in the world 1.8b population (30% of world s total) GDP: USD2t Trade: Over USD1.2t Bilateral trade volume: USD105.9b (2010) 5 ASEAN countries are China s top 20 trading partners Dispute settlement mechanism Lifting most commodity tariffs 17

18 Guangxi and China-ASEAN Regional Trade Guangxi as both coastal and border PLJ Compare: Liaoning Multi-dimensional opening in Guangxi Beihai ( 北海 ) as one of the 14 coastal open cities (1984) Other open cities: Nanning ( 南寧 ), Pingxiang ( 憑祥 ) and Dongxing ( 東興 ) Beihai Export Processing Zone ( 北海出口加工區 ) Qinzhou Bonded Port Zone ( 欽州保稅港區 ) China and ASEAN Free Trade Area, 2010 China-ASEAN Expo (CAEXPO) Nanning-ASEAN Economic and Technology Development Zone, 2005 (promoted to state-level, 2013) Nanning (China-ASEAN) Commodity Exchange, 2008 Nanning (China-ASEAN) International Business District, 2011 Beibu Bay Economic Area ( 北部灣經濟區 ) 18

19 Beibu Bay Economic Area Yunnan Guizhou Pingxiang ( 憑祥 ) Vietnam Dongxing ( 東興 ) Beibu Bay (Gulf of Tonkin) Guangdong 19

20 China s Open Zones 20

21 Xinjiang at the Crossroads of Ancient Silk Road Historically, Xinjiang s prosperity depended much on trade with its western neighbours Modern days: Russia, central Asian countries Gradual revival of trade since economic reform 21

22 Xinjiang in China-Central Asia Regional Trade Relatively more dependent on trade (nearly 20% of GDP) 1 st in terms of trade volume among west PLJs More than 60% of national trade with Central Asia Northern Hong Kong -- entrepot/intermediary trade Geographical proximity Eurasian Land Bridge and highway/railway cooperation Potential for complementing industrial structure and consumption Similarities in ethnicity, religion, culture and custom Energy cooperation -- China s main energy land import channel 22

23 Xinjiang s Lion Share of China-Central Asia Trade 23

24 Xinjiang s Ports of Entry (the only rail port) 24

25 New special economic zones in the Xinjiang border area: Dzungarian Gate 阿拉山口 Korgas 霍爾果斯 Kashgar 喀什 25

26 Urumqi Expo (September 2010) 26

27 Towards Economic Integration of Central Asia 27

28 Shanghai Cooperation Organization Free Trade Area (SCOFTA) Shanghai Six plus 4 SCO observers (Mongolia, Pakistan, India, Iran) Population: 2.8b (EU: 380m; US: 400m) More than half land size of Eurasia 1/3 of EU s GDP (almost same level after PPP) 2015: FTA negotiations commence 2020: Target FTA launch Obstacles (the Stan countries) Communist legacy in economy: Trade and non-trade barriers Weak industrial base and tertiary sector in Central Asia countries Lack of incentive to develop economy Heavy reliance on import from CIS in particular Russia 28

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30 New York State Education Department, Global History & Geography Online Resources Guide 30

31 New measures promulgated by the 3 rd Plenary Session of the CPC 18 th Central Committee (15 November 2013) Point 17: Increase fiscal transfer to revolutionary old areas, ethnic minority areas, border areas and poverty areas Point 24: Relax restrictions on FDI, gradually open finance, education, culture, healthcare, etc for investment 31

32 New Measures Promulgated by the 3 rd Plenary Session of the CPC 18 th Central Committee (15 November 2013) Point 26: Expand opening of inland and border areas Promote coordinated development of trade, investment and technological advancement in inland areas Bring forth advancement in mode of export processing to facilitate promotion of industrial sectors in inland areas Support inland cities to open new international passenger & freight lines Consolidate inter-customs clearance in inland/border and coastal areas Allow special arrangements and policies in respect of people s exchange, processing and logistics, tourism, etc in key border ports of entry, border cities and economic cooperation areas Set up developmental financial institutions Speed up connections of infrastructure with neighbouring countries Foster development (jianshe 建設 ) of the Silk Road Economic Belt ( 絲綢之路經濟帶 ) and the Maritime Silk Route ( 海上絲綢之路 ) 32