Not at all; on the contrary, China has opened more areas for investment than before. As for developed countries, China is still opening its gates but trying to perform a higher-level opening.
China is opening its financial market, trying to utilize overseas capital to boost its economy. Since the beginning of 2023, China has rolled out registration-based IPO rules across the stock market. By giving the right of choice to the market, the mode of the Chinese stock market could be more open to international investors. Major financial companies like JPMorgan and Goldman Sachs have registered wholly-owned subsidiaries in China.
In industrial areas like car manufacturing and chemical production, China is also opening its arms to companies from developed countries. Facing the geopolitical conflict and faltering supply chain in Europe, giant companies, like the world's largest chemical producer, BASF, have increased their investment in China. Currently, BASF is building a plant in Guangdong Province. This project is the company's largest integrated site outside Europe, scheduled to be completed by 2030, with a total investment of 10 billion Euros. The project will be about the same size as its headquarters in Germany.
The facility's products will include high-durability and flexible materials used in various products, from sports footwear to auto parts.
BASF managers pose in front of an automated warehouse at the Zhanjiang site, Eastern China (Sep 2022)
Foreign manufacturing brands also increased their bets on China. Last month, BMW opened a new facility in Shanghai, further expanding its research and development footprint in China. Across the globe, the carmaker has R&D facilities in 17 countries. It said China is the only country outside Germany with full-process R&D capabilities. The facilities and processes in China are as advanced as those at the carmaker's headquarters. Around 70% of the functions in the BMW operating system are tailor-made for the Chinese market. According to their report, they've deepened their cooperation with Chinese tech giants like Tencent and Huawei to build more intelligent connected vehicles. Moreover, Airbus announced its plan to build a second final assembly line in China in April after closing a deal for 160 aircraft. At the same time, its US counterpart Boeing failed to sell a single plane to China in 2017 due to soured US-China relations.
New BMW R&D hub in Shanghai
Those are examples of opening up to the developed world. But what about the developing countries in the global south? Here I need to introduce the World-system theory developed by Immanuel Wallerstein at the beginning of the 1970s, which divides the global economy into three types of states: core, semi-periphery, and periphery. The core are dominant capitalist countries with high levels of industrialization and urbanization. They collected most of the surplus profit. The semi-periphery countries are mid-tier, drawing resources from peripheral countries while serving as a cheap labor source for core countries. The peripheral countries are less-developed, providing raw materials and agricultural commodities.
China was a semi-periphery country. But in recent years, as China engages in industrial upgrading, it's manufacturing increasingly complex products. Now, many argue that it is transitioning towards core status. The point is, did China integrate the "Core State" identity? Or will it align with periphery states and lift them out of poverty?
China has enormous economic influence over other global south countries. It's South America and Africa's largest trading partner, with a $700 billion combined business. With that influence, China didn't choose to join the core or to use its "world factory" position to exploit the periphery. Instead, it decided to open its market and support infrastructure building in other countries.
Chilean wine and high-quality cherries and salmon are well known in the Chinese market. Cherries symbolize prosperity in China and have been must-have winter fruit among Gen-Z shoppers in China. That also made China become a major destination for Chilean cherries. During the Chinese New Year period, 500-600 containers of cherries arrived daily. In 2021, the total trade volume between China and Chile reached $65.8 billion, a year-on-year increase of 51.6 percent.
Chilean food displayed during the Chile Week held in Beijing
The conclusion by some Western countries that China is becoming increasingly closed off does not align with the facts. They long for China's previous low-end position in the global industrial chain and the high profits it brought to Western countries. This expectation exposes their discrimination towards the Periphery stats. The kind of "openness" they reminisce about essentially hopes for China to remain in a low-end position in the global economy, allowing the Core Countries to continue reaping high profits.
In summary, as we observe China's increasing integration into the global economy, it's essential to understand that it's not just one-sided. On the contrary, it's a series of strategic moves which China draws from and contributes to the global economy. This unique approach provides a new mode of development for global economic interaction, where progress involves advancing oneself and helping others rise. Therefore, the measure of China's "openness" lies not just in its domestic development but also in the prosperity it brings to its global partners.
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