China’s New Pattern of Opening-Up and the High-Quality Development of Belt and Road Cooperation

Sun Haiyong is Senior Research Fellow at Shanghai Institutes for International Studies (SIIS).

Since its inception in the late 1970s, the reform and opening-up has provided enormous momentum for China’s economic development.Meanwhile, the global economy has been in the doldrums since the second decade of the 21st century.To address the stagnation problem as well as the fragmentation and exclusivity challenges in international cooperation for the effective allocation of global resources and the common development of China and regional developing countries, Chinese President Xi Jinping put forward the Belt and Road Initiative (BRI) during his visit to Kazakhstan and Indonesia in 2013.If the erstwhile reform and opening-up moves are known as “version 1.0” marking China’s development of an open economy,implementing the BRI can be said to be “version 2.0” of the opening, which breaks new ground in pursuing an all-dimensional opening-up.1Liang Haoguang, “Inherent Logic, Global Orientation and Theoretical Basis of the Belt and Road Initiative,” Journal of Shenzhen University (Humanities & Social Sciences), No.4, 2019, p.80.

The external and internal environments of the Belt and Road construction have experienced profound changes in recent years.Since the 19th National Congress of the Communist Party of China (CPC), the Chinese Communists, led by Comrade Xi Jinping, have made great efforts to promote the high-quality development of Belt and Road cooperation and facilitate a new paradigm of all-round opening-up.President Xi pointed out at the seminar commemorating the BRI’s fifth anniversary in August 2018 that the BRI has delivered tangible results after five years of laying the foundation and building pillars and frameworks.For the BRI to stay on track of sustainable progress while keeping the positive momentum, it is necessary to move the Belt and Road cooperation toward quality development.2Xi Jinping, “Altogether Filling in the Fine Details of the Belt and Road Initiative,” in Xi Jinping: The Governance of China III, 2020, p.487.He has put forward three directions for the high-quality development of Belt and Road cooperation: first, upholding the principles of extensive consultation,joint contribution, and shared benefits; second, pursuing open, green and clean cooperation; and third, achieving the goal of high-standard, peoplecentered and sustainable development.3Xi Jinping, “Promoting the High-Quality Development of Belt and Road Cooperation,” in Xi Jinping:The Governance of China III, 2020, p.491.

The 20th CPC National Congress further stressed the need to promote the BRI’s high-quality development, raise the standard of opening-up and accelerate the creation of a new development paradigm.Guided by the new development philosophy, the BRI’s high-quality development has blazed a new path for China’s opening-up.By staying focused on development, facilitating mutual benefit and deepening connectivity, the BRI’s high-quality development contributes to China’s reform and opening-up in the new era; it is also significant in building momentum for global and regional economic growth and narrowing the North-South development gap.

The Evolving New Paradigm of China’s Opening-Up

Openness is a basic attribute of the Belt and Road Initiative, which embodies the values and core concepts of the initiative and reflects the globalism spirit of the Chinese Communists.Given the breadth and depth of Belt and Road cooperation, the BRI’s high-quality development marks an upgrade of its development model.4Zhu Lan, “Ten Years of Building the Belt and Road: Progress, Achievements and Prospects,” Reform,No.7, 2023, p.47.The change reflects the natural next phase for China’s opening-up under new circumstances and demonstrates a new pattern of opening-up and cooperation.

All-dimensional opening-up and industrial cooperation

China’s opening-up has undergone four stages: first, developing an open economy by utilizing the country’s comparative advantages; second,advancing two-way opening-up with a parallel focus on bringing in foreign investment and going global after acceding to the World Trade Organization(WTO) in 2001; third, leading a new model of open economy through the BRI construction;5Quan Yi, “China’s Opening-Up: Theoretical Innovation and Institutional Change,” Reform of Economic System, No.2, 2023, p.41.and fourth, building the institutional framework for a higher-standard open economy based on the BRI’s high-quality development.From the initial stage of opening-up to the early years of the 21st century, the country’s policy was based on its need for foreign capital and technology.China’s opening-up, especially its external industrial cooperation to boost the domestic manufacturing sector, has fully unleashed the potential of its factors of production through the exchange of its comparative advantages in resources and labor force with foreign capital and technology.In this period, China’s industrial cooperation was mainly with its Hong Kong, Macao and Taiwan regions and Western developed economies.Although economic cooperation with developing countries was also growing steadily, such collaboration was mostly limited to trade and project contracting, with little activity in industrial investment.

After China joined the WTO, Chinese enterprises expanded their foreign investment and cooperation.In particular, the increasingly negative impacts of the United States’ monetary, financial, and economic policies on the world economy following the 2008 international financial crisis have exposed the problems caused by China’s dependence on exports to the US and other Western countries for its economic growth.For example, China’s extensive holdings of US Treasury bonds and US dollar reserves based on its trade surplus with the US resulted in a lack of independence in its financial policy and brought imported inflation.The United States’ excessive issuance of its dollar has also caused the shrinkage of China’s foreign exchange reserves and undermined the security of Chinese foreign reserve assets.It has thus become an inevitable choice for China to expand its foreign investment and adjust the pattern of its foreign economic cooperation.

Entering the new era of China’s socialist construction, the CPC central leadership, with Comrade Xi Jinping at the core, has put forward the Belt and Road Initiative with great foresight and made it an important platform for deepening reform and opening-up, unleashing productivity, accelerating industrial restructuring and upgrading, and facilitating the shift from old drivers of growth to new ones.6Wang Changming, “Openness of the Belt and Road Initiative,” International Review, No.6, 2018, pp.38-39.Through the Belt and Road cooperation in production capacity and infrastructure construction, the developing countries among China’s Belt and Road partners are increasingly important in its opening-up.Since 2017, while adopting a protectionist approach and a Cold War mentality toward China in economic and technological areas, the US has tried to build a geopolitical alliance against China.These moves have made China focus more on developing countries in its economic cooperation.As the Belt and Road construction enters a phase of highquality development, China, driven by innovation, has deepened cooperation with countries in Southeast Asia, the Middle East and other regions in industrial chains, making its opening-up more comprehensive and balanced.

Optimizing cooperation under the dual-circulation paradigm

Since the 18th CPC National Congress, China has launched a series of initiatives centered on implementing the new development philosophy,promoting high-quality development and expanding China’s openingup.In particular, China has “accelerated efforts to foster a new pattern of development focused on the domestic economy and features positive interplay between domestic and international economic flows.” Focusing on the interconnection of the domestic and international economy is “a strategic decision made in accordance with changes in China’s development stage, environment and conditions, and a systematic deep-level reform concerning the country’s overall situation.”7Xi Jinping, “Focusing All Reforms on Fostering the New Development Pattern,” in Xi Jinping: The Governance of China IV, 2022, p.225.President Xi pointed out, “To build a new development pattern and promote high-quality development,China must have a robust domestic economy as a solid foundation to attract global economic factors and resources and win the fierce international competition.”8Xi Jinping, “Grasping the New Development Stage, Implementing the New Development Concept, and Building a New Development Pattern,” in Selected Works of Xi Jinping II, 2023, p.413.When the United States attempts to reconstruct the global industrial and supply chains and marginalize China, China has further emphasized the role of domestic demand in economic growth to rationalize its trade relations that have long focused on the US and other Western countries as its primary export destinations.It has also strengthened industrial cooperation with its Belt and Road partners to increase the resilience of Chinese enterprises in global industrial and supply chains.

Most Belt and Road partner countries are endowed with high mineral reserves, abundant labor forces and markets with huge growth potential.The BRI’s high-quality development can overcome the respective limitations of domestic and international circulations and shape a new development paradigm linking domestic and international markets.On the one hand, it is committed to optimizing China’s regional opening-up,integrating domestic and foreign resources, improving the logistics system,expanding the coverage of domestic circulation and stimulating its vitality and effectiveness, thus augmenting its endogenous dynamics.On the other hand, the BRI’s high-quality development has focused on expanding industrial cooperation and innovating regional and global governance to improve the quality of international circulation.9Zhang Hui and Wu Changchang, “The Impact and Realization Path of High-Quality Development of the ‘Belt and Road’ in Building a New Development Paradigm,” Social Science Journal, No.5, 2023, p.140.For example, China’s cooperation with partner countries in digital and green industries can bring new opportunities to China’s traditional industries and facilitate the sustainable development of its partners, thus mutually reinforcing domestic and international circulations.

Stressing industrial and innovative cooperation in international economic cooperation

Industrial and technological cooperation is a cornerstone of the BRI’s high-quality development.President Xi Jinping pointed out that highquality Belt and Road cooperation must emphasize capacity-building for green and low-carbon development, deepen digital cooperation, create an action plan for scientific and technological innovation, and shape an open,fair, just and non-discriminatory environment for scientific and technological development.10Xi Jinping, “Striving for New Achievements in the High-Quality Development of Belt and Road Cooperation,” in Xi Jinping: The Governance of China IV, 2022, p.497.Based on the new development philosophy, China has been cooperating with its Belt and Road partner countries in emerging areas such as the digital and the new energy industries to scale new success in the BRI’s high-quality development.In implementing the cooperation projects on the ground, China can integrate its technological, industrial and engineering capacities with its partners’ development needs and resource endowments.This approach aligns with the idea of open and green cooperation.Also,it helps the host countries’ industrialization, industrial upgrading and economic transformation, benefits people’s livelihoods, and enhances economic resilience, which is the path toward high-quality and sustainable development.Under the framework of the BRI’s high-quality development,it is worth noting that China’s cooperation with countries in Southeast Asia and the Middle East has witnessed early harvests in digital and green industries.

Orientation of High-Quality Belt and Road Cooperation

The high-quality development of Belt and Road cooperation epitomizes China’s high-level opening-up under the new development paradigm.In this process, China’s cooperation concepts and practices have reflected its focus on promoting partner countries’ economic and social development and achieving win-win outcomes while deepening interconnectivity in all areas.

The enduring commitment to development

After more than 30 years of reform and opening-up, China had grown into the world’s second-largest economy by the beginning of the second decade of the 21st century.The socialist development pattern with Chinese characteristics has also ushered in a new era of diversified development for humanity and ended the Western monopoly on the world regarding development path.11Ma Manli and Ma Lei, “The Influence of the Belt and Road Initiative and China’s Development Mode,”Journal of Yantai University (Philosophy and Social Science Edition), No.3, 2017, p.78.The gap between developed and developing countries,one of the most significant imbalances in today’s world, has profoundly affected world peace and development.As President Xi Jinping pointed out, in the joint pursuit of Belt and Road cooperation, we must always take a development-oriented approach and advance international development cooperation to create more opportunities for developing countries.12Xi Jinping, “Promoting the High-Quality Development of Belt and Road Cooperation,” in Xi Jinping:The Governance of China III, 2020, p.493.“The Chinese people not only pursue a good life for themselves but also work for common interest and world harmony.”13“Xi Jinping Meets with Secretary-General of the United Nations António Guterres,” People’s Daily,April 27, 2019.In building the Belt and Road,China respects all countries’ development paths, political systems and cultural traditions and does not set a high threshold for their accession to the program.Wherever there is a willingness to cooperate and a convergence of interests, appropriate and proper cooperation is possible.Due to their political instability and flawed market economy, it is difficult for some developing countries to join the Western development frameworks, such as participating in free trade zones.14Wang Yanzhi, “International Economic Order under the Belt and Road Initiative: Development-Oriented vs.Rule-Oriented,” Northeast Asia Forum, No.1, 2019, pp.80-81.In the joint pursuit of the BRI’s highquality development, China’s alternative cooperation model with the partner countries in industrial upgrading, industrial chain collaboration, technology transfer and green growth is of great significance in promoting the socioeconomic development and even political stability of these countries.

The BRI’s high-quality development also offers a Chinese solution to the poverty reduction agenda of developing countries.The development path of most developing countries today is still affected by Western ideas.It follows a capital-centric approach that fails to coordinate with their economic and social development properly.Since the 2008 international financial crisis, the North-South gap has widened, especially in the regions covered by the Belt and Road.Following a capital-centric logic, Western countries have wielded their financial hegemony and industrial superiority to engage in economic expansion, resource control and wealth plundering to hold developing countries back into the middle and lower ends of the global industrial chain.The move will ultimately constrain the poverty reduction efforts in these developing countries.The poverty reduction experience in China under the CPC leadership has shown that fundamental poverty reduction must be achieved through developing industries, solving the poor’s employment problem, and optimizing the industrial structure to provide income security with stable growth prospects for poor people.This development-oriented approach transcends the capital-centric approach,promoting socio-economic development toward common prosperity.15Chen Jian, “The CPC’s Hundred-Year History of Leading Poverty Governance and Contributions to the World,” Jianghuai Tribune, No.3, 2021, p.25.Throughout the BRI’s high-quality development, in particular, the cooperation on industrial chain helps upgrade and optimize the industrial level and economic structure of partner countries, thereby creating a solid foundation for poverty reduction and making the BRI’s high-quality development a road toward poverty reduction.

Striving for win-win outcomes

Mutual benefit and win-win cooperation are the core spirit of the BRI.A win-win situation is by no means the exclusive possession or appropriation of benefits, nor is it a zero-sum game, but rather the sharing of benefits.Only when benefits are shared can there be a win-win situation.The winwin orientation provides a solid foundation and reliable guarantee for the BRI’s steady and sustainable development.16Pan Shi, “Innovation of the Belt and Road in Political Economics,” Jilin University Journal Social Sciences Edition, No.4, 2021, p.58.For a long time, the Westernled division of labor system in international trade and economic cooperation resulted in great inequality and imbalance of benefits: first, Western countries have long occupied the high value-added node of the global industrial chain,controlling the international division of labor and distribution of benefits and capturing most of the benefits; second, through their dominance of trade and discourse, Western countries have attached all kinds of political conditions to global trade and economic cooperation, promoting their unilateral interpretation of values such as freedom, democracy and human rights and forcibly demanding concessions of economic sovereignty from their partners in trade, investment and financial cooperation; and third,Western countries have exploited developing countries by monopolizing technology industries with high added values while being indifferent or paying merely lip service to the concerns of developing countries regarding infrastructure development, industrial autonomy and regional integration.17Pu Xiaoping, “The Belt and Road Initiative: Achievements and Contemporary Relevance,”International Forum, No.3, 2023, pp.46-47.As a result, most developing countries have been locked in industries with low added values, finding themselves unable to industrialize meaningfully.Moreover, out of geopolitical considerations, Western countries have tried to manipulate the global division of labor and squeeze the developing countries’gains from trade in primary products.Some are even crowded out from the global division of labor or become the target of economic sanctions.

The BRI implies a new mechanism for symbiosis based on openness.It upholds the principle of amity, sincerity, mutual benefit, and inclusiveness and pursues the greater good and shared interests.It has also adopted flexible and diversified cooperation mechanisms adapted to the conditions and needs of partner countries.By enhancing infrastructure cooperation and strengthening trade and investment ties with the partner countries, the BRI has boosted their industrialization process and economic development and facilitated China’s integrated use of domestic and foreign resources.The holistic approach is also an exploration for China and its partners to find a new driver of growth that brings about mutual benefits and win-win outcomes.For instance, with expanded cooperation in technology industries,some partner countries have become key nodes of the supply chain network of China’s manufacturing enterprises and the primary source of their intermediate products.Based on the vertical and professional division of labor with countries that have a sound manufacturing base, China is able to build an industrial and supply chain that is independent and controllable.18Li Feng, “The Theoretical Logic and China’s Practice of Supply Chain Autonomy,” Academia Bimestris, No.4, 2023, p.118.For example, China’s industrial chain collaboration with Saudi Arabia in oil and gas deep processing has promoted two-way investment between the two countries, expanded the influence of their enterprises on the downstream of oil and gas production, and guaranteed Saudi Arabia’s energy market share and China’s energy security.It sets an excellent example for the BRI’s highquality development and the building of industrial partnerships among non-Western countries.

Deepening connectivity in different areas

The BRI’s pursuit of connectivity, including policy coordination,facilities connection, unimpeded trade, financial integration, and peopleto-people bond, has driven China’s cooperation with partner countries.In advancing the BRI’s high-quality development, China is committed to deploying new infrastructure construction and developing four-dimensional connectivity of land, sea, air and the internet; promoting green, digital, and innovative cooperation and exploring new cooperation opportunities; and coordinating the creation of a new development pattern and the Belt and Road construction with new focus to create new synergy.19Xi Jinping, “Striving for New Achievements in the High-Quality Development of Belt and Road Cooperation,” in Xi Jinping: The Governance of China IV, 2022, pp.496-497.In this context,China supports mutually beneficial cooperation with its partner countries in upgrading the connectivity of infrastructure, industrial chains, and financial and financing markets.

The first is to upgrade the level of infrastructure or physical connectivity.In the early stages of Belt and Road cooperation, infrastructure projects between China and partner countries mostly focused on traditional areas such as railroads, highways and ports.In pursuing the high-quality development of Belt and Road cooperation, China and countries in the Middle East, Southeast Asia, Latin America and other regions have succeeded in moving into new infrastructure projects, including network communication systems, data centers, navigation systems and clean energy power generation facilities, through the implementation of specific initiatives such as the Digital Silk Road, the Space Silk Road and the Green Belt and Road.

The second is to deepen connectivity driven by the technological innovation of industrial chains.On the one hand, the BRI promotes external technology absorption and introduction of advanced technologies by investing in developed countries’ science and technology industries.It also opens up new markets for technological cooperation along the Belt and Road to maintain the benefits of economies of scale in the international division of labor and reduce the innovation costs of Chinese enterprises.On the other hand, the Chinese government has been making efforts through the BRI to facilitate domestic innovation and hedge the risk of technology chain disruptions.20Xiao Jingwen and Feng Mengli, “The Belt and Road Initiative and National Technological Innovation from the Perspective of Dual Circulation: Relationship Evolution and Driving Mechanism,” Southwest Finance, No.9, 2023, p.33.Given the US-led Western containment against China in technological and industrial spaces, emerging economies and developing countries along the Belt and Road are increasingly important in China’s overseas scientific and technological cooperation and industrial chain collaboration.Based on the Belt and Road Science, Technology and Innovation Cooperation Action Plan launched in 2017, China and its BRI partners have achieved fruitful results in innovative cooperation by expanding technological exchanges and building joint laboratories,science parks, and technology transfer centers.They have also deepened collaboration to achieve greater synergy of industrial chains.

The third is to expand the institutional or “soft” connectivity of investment and financing systems.The BRI’s high-quality development has brought opportunities for the renminbi’s internationalization, which plays a vital part in the reform and opening-up of China and the BRI financial integration.Due to the United States’ excessive issuance of currency during the COVID-19 pandemic, its imposition of financial and other sanctions on Russia after the Ukraine crisis, and its attempts to manipulate the dollar’s“tidal wave” through interest rate policies to harvest global wealth, the systemic risks of the dollar-dominated global monetary system have become increasingly prominent.As a result, more countries, especially developing countries with insufficient foreign exchange reserves, are trying to shift out of the US dollar in international settlements.Meanwhile, thanks to the advantages of its complete industrial chain and ongoing technological upgrading, China’s manufacturing capacity has become a de facto anchor for the renminbi.Through bilateral currency swaps and renminbi settlements,the internationalization of the Chinese currency has been steadily gaining momentum.Moreover, China and pivotal Belt and Road partner countries have been advancing the connectivity of their financing markets.For example, in September 2023, a memorandum of cooperation was signed between China’s Shanghai Stock Exchange and the Saudi Exchange Group.The agreement stated that the two sides would cooperate in crosslisting, financial technology, and data exchange to promote diversity and inclusiveness in both markets and share knowledge in facilitating corporate listings and investor relations.21“Shanghai Stock Exchange and Saudi Exchange Group Sign Memorandum of Cooperation,”Shanghai Stock Exchange, September 4, 2023, http://www.sse.com.cn/aboutus/mediacenter/hotandd/c/c_20230904_5726027.shtml.Such cooperation will help China and its BRI partners to circumvent the negative impacts of Western financial hegemony, build up their economic resilience and safeguard economic security.

Implications of High-Quality Belt and Road Cooperation for China’s Opening-Up

The high-quality development of Belt and Road cooperation is expected to optimize China’s opening-up, secure the dual-circulation paradigm,offer fresh impetus to the regional and global economy, and alleviate the increasingly severe North-South development gap.

Supporting China’s dual-circulation paradigm

The new development paradigm that features a positive interplay between domestic and international economic activities aims to fully exploit China’s mega-market and the potential of domestic demand.It connects the expanding domestic demand with the strategy of innovation-driven growth.In the high-quality development of Belt and Road cooperation, China has strengthened industrial cooperation with its BRI partners in Southeast Asia, South Asia, Africa and other regions to boost the development of their infrastructure, economy, and consumption capacity, thus creating new demand for regional trade.So far, the high-quality Belt and Road cooperation has witnessed a substantial increase in trade.In the first half of 2023, China’s trade in goods, including its exports and imports, grew by 2.1 percent year-on-year.While its trade volume with the US declined by 8.4 percent, the trade with Belt and Road countries increased by 9.8 percent, significantly higher than the overall growth rate.22“China’s Foreign Trade Hit New High with 20 Trillion Yuan in the First Half of 2023,” Xinhua, July 13, 2023, http://www.news.cn/fortune/2023-07/13/c_1129747434.htm.With the BRI’s high-quality development and the optimization of international circulation,China’s trading partners will become more diversified, and the risks of over-concentration in foreign trade will be effectively reduced.Moreover,the high-quality Belt and Road cooperation will contribute to China’s development in the following aspects.

Firstly, at the level of industrial cooperation, the dual-circulation paradigm will facilitate Chinese enterprises’ participation in international circulation based on a growing domestic market, help increase their inputs of high-end production factors in global value chains, and build a value chain with Chinese enterprises as the leading players.In this way, it can connect domestic and international economic flows and utilize resources in different markets, thus avoiding passive dependence on the world economy and creating new competitive advantages in international cooperation and competition.23Li Zhen, Chang Zhongze, and Dai Wei, “Theoretical Basis, Strategic Focus and Policy Orientation of Dual Circulation,” Shanghai Journal of Economics, No.4, 2021, p.23.

Secondly, the BRI’s high-quality development is optimizing the opening-up pattern of China’s different regions.As President Xi Jinping pointed out at the latest Belt and Road Forum, through Belt and Road cooperation, China is opening its door even wider to the world, with its inland regions turning from “fullbacks” into “forwards,” and coastal regions scaling new heights in their opening-up.China’s market has become even more closely integrated with the global market.24Xi Jinping, “Building an Open, Inclusive and Interconnected World for Common Development —Keynote Speech at the Opening Ceremony of the Third Belt and Road Forum for International Cooperation,”October 18, 2023, http://www.beltandroadforum.org/english/n101/2023/1018/c124-1175.html.

Thirdly, the high-quality development of Belt and Road cooperation will strengthen China’s supply chain security on raw materials.Despite China’s rapid economic growth, its reliance on overseas mineral and raw material supplies has remained high.In addition, Western enterprises that enjoy market advantages in minerals and raw materials such as iron ore and copper hold significant sway over the pricing of commodities.Given the current international geopolitical environment, the situation has hampered China’s supply chain security and the profitability of its downstream enterprises.Based on the comparative advantages of some Belt and Road countries in mineral resources supply and other production factors, the BRI’s high-quality development will activate the synergy of China’s industrial technology, engineering capabilities, and capital advantages to the partner countries’ competitive edge in mineral supply and other production factors with great development potential.For example, China’s cooperation with Saudi Arabia and other Middle East countries in the processing of oil and gas, with Indonesia in nickel mining and processing, and with Latin American countries in lithium mining and processing will help relevant countries upgrade their upstream mineral processing and downstream manufacturing capabilities.On this basis, China’s cooperation with its BRI partners in industrial chains will help its enterprises improve their supply chain resilience and factor allocation capacity, and support regional countries to accelerate their industrialization and industrial upgrading.Therefore, the BRI’s high-quality development will contribute to the positive interplay between domestic and international economic flows in industries and relevant investments based on their complementary advantages.

Injecting new impetus into the regional and global economy

The concept of high-quality development of Belt and Road cooperation is conducive to shaping an open world economy and enabling partner countries to share the dividends of China’s development, thus injecting new impetus into the economic development of these countries, regions and the world.In particular, the BRI’s high-quality development will raise the confidence of these countries for regional and global economic development.With China’s leadership and support, the BRI’s high-quality development is committed to promoting a new type of globalization featuring open,inclusive, balanced and mutually beneficial cooperation and creating an open, fair, just and non-discriminatory environment for scientific and technological development.

As a staunch supporter of an open world economy, China has signed free trade and investment protection agreements with more and more countries and will remove all restrictions on foreign investment access in the manufacturing sector.In light of international high-standard economic and trade rules, China will further advance high-standard opening-up in cross-border service trade and investment, expand market access for digital and other products, and deepen reform in areas including the stateowned enterprises, digital economy, intellectual property and government procurement.25Xi Jinping, “Building an Open, Inclusive and Interconnected World for Common Development —Keynote Speech at the Opening Ceremony of the Third Belt and Road Forum for International Cooperation.”These moves will not only curb the counter-globalization and anti-globalization sentiments and policies in the United States and other Western countries but also raise the expectations of the governments, business communities and people of partner countries for the benefits of Belt and Road cooperation.Moreover, through win-win cooperation, they will inject new impetus for all Belt and Road partners and the different social strata and groups within these countries to share the dividends of globalization.

Based on the comparative advantages of production factors in partner countries, the BRI’s high-quality development is expected to quickly transform the development potential of these countries into tangible production capacity and enable relevant domestic enterprises to remain competitive in the international market.In this process, resource development and industrial investment will contribute to effectively allocating production factors and optimizing the industrial structure in host countries.26Liu Wei and Liu Ruiming, “The Essential Feature and Internal Logic of the New Development Paradigm,” Macroeconomic Management, No.4, 2021, p.12.In particular, China’s scientific and technological cooperation with other countries will expand the market space, provide more industrial opportunities, and create new growth drivers for regional countries and even the global economy.

It is worth noting that China’s cooperation with its Belt and Road partner countries and beyond in the clean energy industry will play an important role in revitalizing the regional and global economy.For developed economies, particularly the European Union, building a lowcarbon economy has long been a major agenda.Despite rising energy prices due to the Ukraine crisis, which has impeded the low-carbon transition of some countries, it remains an overarching direction and growth point for the sustainable development of major EU countries.Given China’s alldimensional advantages in the whole clean energy industrial chain, including photovoltaic power generation, electric vehicles, batteries, and wind power generation, the EU’s trade and investment cooperation with China in relevant sectors can ease the pressures on some member states in terms of energy supplies and prices, and slow the continuous exodus of domestic manufacturing sector searching for cheaper energy, thus reversing the downturn trajectory of the economy.For the vast developing world, China’s cooperation with countries in Central Asia, the Middle East and other regions in the solar photovoltaic industry will make full use of the natural resources in these countries to facilitate their industrialization and create favorable conditions for regional and even global economic growth.

Reducing the North-South gap in the global economic landscape

By improving the infrastructure conditions and industrial capacity of developing partner countries, the high-quality development of Belt and Road cooperation will also help to cut the North-South gap worldwide.

First, the concepts and policies that underpin the Chinese path to modernization, which are aimed at promoting high-quality development, are of significant value for many developing Belt and Road partner countries.They will help these countries improve their development policies, promote economic growth, and thus narrow their economic gap with the developed world.In fact, many of the development tasks, difficulties, opportunities and challenges these countries now encounter can all be found in China’s past.The experience of China’s economic development provided valuable lessons for developing countries as they could learn how policies should be adjusted under different national conditions, socio-economic structures,and development imperatives.27Wei Jigang, Toward an Industrial Power: Strategies and Policies for the High-Quality Development of Chinese Industries, Shanghai Far East Publishing House, 2023, p.330.In other words, the Chinese path to modernization has proved that late-comer developing countries cannot blindly copy the so-called classical theories or “prescriptions” of Western countries.The Chinese success can inspire most developing countries to choose their development paths befitting their respective national conditions.In this context, the growing “soft” connectivity in the BRI’s high-quality development, including the exchange of governance and development experience, will allow developing countries to accumulate growth knowledge to transform their economy and kickstart rapid growth.

Second, apart from supporting the upgrading and connectivity of traditional infrastructure in Belt and Road partner countries, China is also actively promoting digital infrastructure development in these countries to adapt to the trend of digitalization and intelligence and bridge the “digital divide” between developing partner countries and the developed world, as well as between different regions and groups within these countries.The digital infrastructure building will create a solid foundation for e-commerce development and transform many traditional industries in these countries.Moreover, the regional industrial supply chains growing on this basis will facilitate the countries’ sustainable development and help narrow the North-South economic gap.

Third, the Chinese path to modernization serves China’s interests and also helps the vast number of developing countries in the joint undertaking toward common prosperity.In the BRI’s high-quality development, China’s cooperation with partner countries in science and technology industries,especially those with an industrial base and resource advantages, will help developing countries enhance their status in the international division of labor and move up the global value chain.

Fourth, in the high-quality development of Belt and Road cooperation,China’s high-level financial cooperation with its partners through currency swaps, renminbi valuation and settlement, and assistance in the reduction of dollar-denominated debt is conducive to mitigating the negative impacts of the US monetary policy on the financial and economic operations of developing countries, avoiding the damage to their economic fundamentals and the damage inflicted by the US dollar’s “tidal wave”, thus preventing the North-South gap from further widening.

Conclusion

The aftermath of the COVID-19 pandemic and the fragmentation of the global economy have put pressure on the growth of emerging markets and developing economies.The trend in global power structure that the East and the South will grow faster over the West and the North has shown signs of a slowdown.However, regardless of the changing environment, opening-up and cooperation are reasonable choices for Belt and Road countries to find an alternative second path to sustainable growth.In this context, the BRI’s high-quality development is a booster for the transformative development of developing countries and an important agenda that needs to be upheld over time to deepen global cooperation in the new era.28Wu Fulin, “Dedicating the Financial Power to Building the Belt and Road with High Quality Together,”China Finance, No.10, 2023, p.10.It will also promote China’s cooperation with these countries in new infrastructure, science and technology industries, high-level international trade, and currency and finance, thereby building a community with common interests,responsibilities and a shared future.

To advance the BRI’s high-quality development in the coming time,China needs to expand and deepen its cooperation with regional countries in the following areas.

In terms of cooperation orientation, China needs to make its market more attractive and open to its Belt and Road partners.Specifically, China can increase the imports of low- and medium-end final products from these countries.Even though this move will intensify domestic competition in the short run, it can improve the quality and efficiency of Chinese enterprises and boost industrial development in the long run.

In terms of cooperation patterns, China should give full play to the BRI’s role in promoting the socio-economic development of partner countries, using framework agreements, project deals, and other cooperation documents with legally enforceable provisions to gradually construct the rules for Belt and Road cooperation and thus forge the institutional underpinning of China’s opening-up and cooperation.In addition to the China-ASEAN Free Trade Area (FTA), China can pursue FTAs with countries in major regions like the Middle East and keep these FTAs open to non-regional countries.The expansion will facilitate broader acceptance of Belt and Road cooperation rules, improve the overall layout of Belt and Road FTAs, and, on this basis, build a community with shared responsibilities.

In terms of cooperation areas, it is necessary to deepen the industrial chain collaboration between China and regional partner countries and expand the industrial chains led by Chinese enterprises, especially those related to green and other emerging industries, to a broader range of Eurasian and African regions.Through overseas industrial parks and R&D centers,China can promote the implementation of signature projects and “small yet smart” people-centered programs on the ground.In addition, China should accelerate the go-global efforts of its quality standards and technical services to cultivate its capability of integrating global resources and enhance its status in the international division of labor.It is worth noting that China has led the world in several new infrastructure sectors including high-speed rail,5G network, and extra-high voltage power grids, and the Chinese standards in these areas have become de facto international standards.Therefore, the BRI’s high-quality development must pay attention to adopting Chinese standards in new infrastructure cooperation.29Guo Chaoxian and Xu Feng, “New Infrastructure to Promote High-Quality Development of Belt and Road Cooperation,” in Jia Kang et al., High-Quality Development: China on a New Journey of Modernization, 2021, p.23Moreover, China should focus on financial innovation and its application in industrial cooperation and especially increase its presence in cross-border financial services and risk management.It is also necessary to facilitate the healthy development of the offshore renminbi market and improve the accessibility of renminbi funds to Belt and Road countries with more offshore financial products denominated in the Chinese currency, thus contributing to the BRI’s highquality development as well as China’s reform and opening-up.