07.04.2024 Author: Vladimir Terehov

China held two forums on the implementation of the “Xinomics” concept

Two weeks after the meeting of the Chinese parliament, commonly referred to as the “Two Sessions”, held in the first half of March this year, two equally noteworthy forum events were held in Beijing and immediately afterwards in the resort town of Boao (on Hainan Island), attended by Chinese and foreign experts.

The main theme of the latter was the implementation of a fundamentally innovative trend in the country’s economic policy, the main provisions of which had been outlined by the Chinese leadership some time ago, but under the brand name “Xinomics” (borrowed, incidentally, from foreign economists) were given legislative and binding status at the first event.

In its most general form, the main content of the “Xinomics” concept boils down to a shift from the long-standing image of the Chinese economy as a supplier of cheap mass consumer goods to world markets, to its transformation into a developer and consumer of the most advanced technologies. Naturally, the share of exports in national GDP is falling sharply.

The dominant slogan of this economic trend is “giving a new quality to one’s own productive forces”, while maintaining cooperation with all external partners (but also on a qualitatively new level). Including (perhaps primarily) those who are China’s main political opponents in the current phase of the “great global game”.

This fits in perfectly with one of the cornerstones of Beijing’s global claims, which also provides for its own openness to foreign presence in the Chinese market. Firstly, in the form of investments in the Chinese economy that generate income for external investors.

These investments should not be subject to significant risks in the country. Meanwhile, China’s “well-wishers” have recently been engaged in a propaganda campaign in several directions at once to create an impression of their presence among fearful potential investors.

Firstly, the problems that do exist are dramatically exaggerated, but they are mainly due to objective reasons, such as the constraints on global logistics caused by the Covid-19 pandemic and the general decline in the world economy, which began even earlier. Secondly, the issue of “human rights violations” in the country’s autonomous regions and in Hong Kong is being stoked. Third, the statements of the PRC leadership are misinterpreted, both on the nature of the solution to the Taiwan problem and on the escalating situation in the South China Sea.

This is why the main generalised message to the international political and economic space from the PRC leadership has recently sounded like this: “Guys, don’t worry. Everything is fine with the economy, it is only with our help that the Uyghurs-Tibetans are finally coming out of the Middle Ages (there is an informative one and a half minute video on the 65th anniversary of the famous events in Tibet), the people of Hong Kong do not support local separatists, and the source of the deterioration of the situation around Taiwan and in the South China Sea is somewhere near you”.

To ensure that this message gets through, the above forums (and many others) invite their authoritative representatives. For example, among the more than one hundred foreign participants at the China Development Forum (CDF) in Beijing were top officials from the World Bank and the International Monetary Fund, heads of major corporations, and representatives of expert “think tanks”.

As for the Boao Forum, often referred to as the “Asian Davos” (although the geography of the issues discussed at the Forum has long since moved beyond the Asian continent and is now global), it was held under the theme “Asia and the World: Shared Challenges, Shared Responsibilities”. The presence of Carlos Gutierrez, a Cuban-born man who served as US Secretary of Commerce from 2005 to 2009, and before and after that as head of a number of large private companies (e.g. the Kellogg Company), was noteworthy. His political preferences, directed against D. Trump, are on the side of those groups of the American establishment led by Hillary Clinton, Barack Obama and Joe Biden.

Prime Minister Li Qiang (who was also the keynote speaker at the previous two sessions) spoke on behalf of the Chinese leadership at the first of these Forum events. He made a number of key points: reaffirming the “opening-up” of the Chinese economy, which is being transformed into a “high-tech” economy; declaring its “sustainable recovery”; and expressing confidence in the continued interest of world business leaders in continuing to operate in the Chinese market.

The Boao Forum discussed a wider range of issues related to the challenges to the successful functioning of the global economic organism as a whole. These problems hinder the mutual benefits of the international division of labour, but help the crazy guardians of a “special way” to advocate a strategy of “doing everything ourselves”. This is utterly ridiculous and has never been implemented by anyone.

Particular attention was paid in Boao to the virtual paralysis of the work of the WTO, the organisation that is supposed to play the main role in the development and observance of the rules of international trade, as well as in the resolution of certain disputes between participants. This is one of the main reasons for the blockage (with the threat of complete collapse) of the global economic organism.

A particularly negative role in this alarming trend has recently been played by the mutual accusations of the world’s two largest economies regarding state subsidies for companies specialising in the production of electric cars, a very promising area of production in terms of generating expected revenues. The Chinese side’s position on the source of the problem is illustrated in a related article in the Global Times.

However, this very “electric car” issue (as well as “solar panel”, “aluminium rolling”, “chip”, …) of specific mutual accusations of unfair behaviour on international markets is nothing more than an external manifestation of the escalating struggle between the two main players in the current global political game. Equally graphic are the PRC’s attempts to portray Beijing as the source of a host of problems that have plagued the US in recent years.

Be that as it may, the speech in Boao by Zhao Leji, Chairman of the Chinese Parliament, who represented the country at the forum held here, was couched in the same optimistic tones as Li Qiang’s speech at the China Development Forum. He repeated much the same basic theses.

The work of the Boao Forum in Beijing was accompanied by no less remarkable events, such as the meeting between Chinese leader Xi Jinping and a group of American businessmen. After his meeting with President Biden in San Francisco last November, this was Xi’s first contact with representatives of the US business community, who were keen to hear what the term “Xinomics” actually means.

As far as we can understand, they heard about the same things that the Chinese leader’s direct aides said at the two forums. In particular, they were told that China was “actively exploring” ways of coexisting with the United States. According to the same Global Times, this “met with broad understanding from the representatives of business, strategic and academic circles” represented by Xi Jinping’s American interlocutors at this meeting.

No less noteworthy is the report of a trip to China “planned for April” by the US Secretary of the Treasury, Janet Yellen. It should be remembered that she was already here on a working visit in July last year. That visit led to the creation of a number of joint expert groups to hold “frank and substantive discussions” on the issues that divide the parties. It seems that the time has come to raise the level of participants in such “discussions”.

Finally, we note once again that the very process of holding them on different platforms and on different occasions testifies to the fact that the situation in the world in general, and in relations between the leading powers in particular, is not hopeless.


Vladimir TEREKHOV, expert on the problems of the Asia-Pacific region, especially for the online magazine “New Eastern Outlook

Related articles: