As COVID-19 retreats, China opens up more

While most of the Chinese industry remained closed during the outbreak of COVID-19, the import and export volume of e-commerce continued to grow. The reason, apparently, has been the service and manufacturing environment's quick reorientation with global exigencies as the unprecedented challenge emerged.

In the absence of any vaccine, the contagion is here to stay for a while. Though China has impressively been able to overcome it, the rest of the world, especially Europe and the US, is far from reaching the peak. This would, therefore, be an inappropriate time to close doors.

China is now opening up its economy even further to offset the setbacks. Zhong Shan, the commerce minister, revealed a roadmap in this regard last week in an article published in Qiushi Journal, the flagship magazine of the Communist Party of China Central Committee.

This might seem like an impasse in the face of lockdowns and travel restrictions around the world but the fact remains that movement of goods and trade routes are, in effect, open. China has some exceptional B2B and B2C gateways that accept orders online and ship across continents. They have lived up to their reputation at this critical moment by ensuring the availability of essential and medical supplies.

At the government level, China is opening up foreign trade to meet global demands as factories in many countries remain shut. Being unable to fulfill the requirement of specialized medical equipment that earlier existed relatively low, they are looking up to China.

China is well suited to deliver on their expectations. It has an export-oriented economy where overseas trade makes a large portion of the GDP. While the service industry is also catching up fast, it is the country's manufacturing sector that drives the overall growth.

The protectionist wave that emanated from Western circles during the last two years is counterproductive in addressing contingencies like the current epidemic. Although a partial deal has been signed between the US and China, the episode serves as a reminder that the use of tariffs to gain undue advantages only impedes growth.

As COVID-19 takes hold in an increasing number of countries, many of them are putting limits on exports of medical equipment, causing a new surge in protectionism. Apart from affecting developed nations, these measures are severely impacting the capacity of developing ones to tackle the disease. Such restrictions can increase the death toll in places where access to drugs, ventilators, and protective gear is only through imports.

On the other hand, China's decision to keep its trade borders open and to support others during this crisis will continue to be remembered after all this is over. When traditional allies of some European states turned away, China reached out with aid as well as with an open market. As a World Bank official rightly put it, international cooperation is the most effective vaccine against the ongoing virulent threat.

Being one of the leaders in artificial intelligence and 5G, China plans to use these cutting-edge technologies to improve supply chains as part of the opening up. A renewed focus on innovation will ensure that the national economy comes out of the calamity unscathed and continues to provide a nurturing ground for new business models.

The other area where the government is directing the opening up effort is investment. Currently bearing the brunt of the pandemic, investment otherwise plays a major role in sustaining and improving output levels. In China's case, it increases the ability to satisfy the requirements of foreign and domestic consumption.

Consumption has started to pick pace in China even though it lingers low elsewhere. This presents an excellent capitalization opportunity for multinational companies as they can use the rebounding Chinese market to keep their profits up. Local firms are fully cognizant of the scope and those in agriculture, daily necessities and manufacturing businesses are expanding their investments.

As an incentive, China is moving ahead with the shortening of the negative list on foreign investment. If investors enter at this time, they will get a chance to ride the impending bullish turnaround. The resumption in production and the activity in the service sector is a clear sign that China is taking a lead in emerging from the pandemic.

The Chinese economy is inextricably integrated with that of the world. Any negative development there sends shockwaves in international markets and any positivity is a boon for global commerce. Recovery from the short-lived pressure and the government's latest push for opening up will prove to be a stimulus for industries and trade around the world.

The author is a Pakistan-based commentator on international and commercial affairs.

The opinions expressed here are those of the writer and do not represent the views of China Daily and China Daily website.