An art installation titled “Golden Bridge on Silk Road” Photo: Yang Chonghai/CSST

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The world today is confronting profound changes unseen in a century. International economic and trade rules are undergoing rapid transformation. The Belt and Road Initiative (BRI), which serves as practices to build a human community with a shared future, has presented China with significant opportunities to engage in global economic governance.

 

‘Fairness’ & development

During the period before and after the establishment of the World Trade Organization (WTO), developed and developing countries had relatively compatible international trade policy goals. Developed countries guided the process of global trade liberalization by taking the initiative to assume obligations such as tax reduction, while developing countries gained opportunities through “special and differential treatments.” Trade liberalization was the mainstream of global trade policy at that time. 

With the acceleration of economic growth in emerging economies, trade friction between developed and emerging economies is on the rise, and the interest demands of the two groups in international economic and trade rules are increasingly incompatible. Developed economies are more concerned with so-called “fairness issues,” such as industrial policies and competitive neutrality, while developing countries are more focused on traditional development issues. Developed and developing countries pursue their own interests and have different demands, leading to a fault line in current negotiations on international economic and trade rules.

Integration into the world market  

After 10 years of construction, the BRI has achieved leapfrog progress, transitioning from an initiative to a series of implemented projects. As of January 2023, China had signed more than 200 cooperation agreements with 151 countries and 32 international organizations to jointly build the BRI. 

Adhering to the principle of “extensive consultation, joint contribution and shared benefits,” the BRI not only provides new growth points for world economic development, but also addresses the epochal need for the reform of international economic and trade rules. The BRI has emerged as a new voice and contributed new strength to the process of restructuring economic and trade rules.

In general, the fundamental demands of Belt and Road countries lie not in whether to embrace trade liberalization and join the global market, but rather in determining the speed and extent of their integration into global markets, both in terms of traditional and emerging issues.

 

Promoting collaboration

This critical phase of formulating and restructuring international economic and trade rules also represents a transition period for emerging economies such as China from followers to forerunners in shaping the rules. 

On one hand, it is recommended to actively connect and integrate into high-standard internationally recognized economic and trade rules. In recent years, these regulations have demonstrated new characteristics such as encompassing a wide range of areas and imposing high constraints. 

Actively participating in high-standard economic and trade rules is conducive not only to China’s taking the initiative in formulating rules, but to promoting China’s institutional opening up as well. Therefore, while promoting the construction of the BRI, China should make good use of the existing high-standard free trade agreements such as the Group of Twenty (G20), the Asia Pacific Economic Cooperation (APEC), the Shanghai Cooperation Organization (SCO), and the BRICS cooperation mechanism to provide the basis of formulating economic and trade rules for the BRI. Meanwhile, it is also necessary to fully leverage the advantages of free trade zones and free trade ports such as Shanghai and Hainan as “experimental fields.”

On the other hand, it is crucial for China to further establish and improve trade rules based on development issues with Belt and Road countries. 

As for specific economic and trade rules, we should adhere to high-standard and comprehensive opening up with developing countries in traditional economic and trade fields such as goods, services, and investment, strengthen existing dispute resolution mechanisms and binding rules, and upgrade some general, principled, and broader declarative provisions to more detailed and binding provisions. 

Meanwhile, for emerging issues, we should guide Belt and Road countries to reflect “development” measures in behind-the-border rules, and gradually form a high-quality and high-standard rule system.

 

Liu Bin (professor) is from the Academy of China Open Economy Studies at the University of International Business and Economics (UIBE), and Zhang Yani is from the China Institute for WTO Studies at the UIBE.

Edited by ZHAO YUAN