Between the two Olympics
THE opening ceremony of the Winter Olympics was held on 4th February 2022 with Chinese glory and fanfare.
It makes Beijing the first city to have hosted both the Summer and Winter Games; an achievement that the people and leadership of the People’s Republic of China can be justly proud of as all this was achieved amid the ongoing global pandemic and heightened geopolitical tensions.
While the Chinese celebrate the beginning of the Tiger’s year and the Olympic glory to receiving the perceived benefits from the opportunity, what is more important for the rest of us is to learn from this Chinese feat and understand China’s rapid ongoing transformation and factors on which China’s development focuses for its rapid expansion.
In between these two Olympics (2008-2022), China has consolidated its rightful place as the most powerful engine of world economic growth.
During the same period, China has increasingly made foreign direct investments through various initiatives.
In 2009, Chinese FDI accounted for 4% of global FDI, however, now the flow of investment has increased and has been predominately directed to emerging economies. While global FDI slumped dramatically in 2020, Chinese FDI outflows increased.
In 2020, the outward foreign direct investment (FDI) from China as a share of global FDI outflows reached 20.2 percent the highest Chinese share despite the slowing global economy due to COVID-19 pandemic, making China the largest global direct investor for the first time in history.
In recent years, China’s overseas investments have diversified with both state and private enterprises investing in nearly all industries and economic sectors with the focus of FDI into the service industry and high-tech sectors.
Similarly, Chinese enterprises are expanding globally through significant green field FDI projects, for example along the automotive supply chain.
As China’s strength for long-term investment in the region grows, it is expected that China will invest heavily in telecommunications, energy, natural resources and infrastructure.
This focus supported China’s industrial policy and also encouraged investments under China’s Belt and Road Initiative (BRI), which seeks to create cooperation with other countries via energy, infrastructure investments, etc.
In all this to materialize China’s National Development and Reform Commission (NDRC) played a significant role which developed policies and frameworks that support outbound investments ensuring national agenda, crafting competition and antitrust laws, handling Dispute Settlement and avoid conflict of interests. In the same period, China gradually scaled up its SEZ, FTZs and Free Trade Port development plans.
It also started a large-scale anti-corruption campaign and also improved its plans on Strengthening IP Protection and implementing China’s IP-related commitments on its path, all set to make a global impact through innovations and economic initiatives leveraging its demographic and economic diversity. On the political front, it has assumed the role of great power.
The long-adhered policy of noninterference has been transformed positively to ensure China’s elevated role in global politics. Its utmost commitment to exercise sovereignty and territorial integrity never faltered but the vision of President Xi is focused on shared prosperity and development, the culminated manifestation of which is BRI and the Asian Infrastructure Investment Bank (AIIB).
This economic growth in the said period happened mostly under the leadership of President Xi, who through his pragmatic leadership ensured China maintains the growth momentum and stressed that “a country can only find its way to a bright future by following the development path that is suited
to its prevailing national conditions”. China in the same period explored new relationship models and established a favorable environment for peaceful development and as China further rises as an economic power, its participation in the regional and global economy, through outward FDI as well as trade will grow further.
Learning from China’s development and FDI trends, it is imperative that Pakistan also formulates policies that attract Chinese companies and offer incentives like tax holidays, import/export duties reduction, improve remittance policies and research and development subsidies.
The signing of the CPEC industrial development framework on in the sidelines of PM Imran Khan’s visit to China can be a stepping stone towards a sustainable industrial transformation in Pakistan which can be supported through the SEZs development, trade promotion, Industrial linkages with China, development of Gwadar and enhancing regional trade.
A deep study needs to be done to improve the capability of the economy to innovate and also leverage the FTA with China and synchronizing it with the CPEC Industrial development Framework. As CPEC phase I infrastructure projects are now completed or nearing completion, the next stage will see increasing investments into Belt and Road Tech and Agri sectors.
Thus, our economic plans need to devote more to science and technology and also towards a strategy of using local resources, attracting investments in tourism, agriculture, transport and logistics sectors, increasing efficiency of services by preparing a well-educated labour force and importantly, providing a stable macro-economic and security environment for projects to resolve development bottlenecks and promote economic development.
—The writer is a Projects’ Management specialist and a faculty member of the Projects Management Dept. at various institutes/universities. He has also served as a diplomat in China and Vietnam.
