Time for some recalibration

In the era of geo-economics, China is committed to balanced opening-up and supporting other countries in building more diversified solutions

With the world accelerating its pace to enter the age of geo-economics, economic efficiency that once underpinned globalization is giving way to security-centered policy considerations. Against this backdrop, China has not retreated from its commitment to opening-up. Instead, it is proactively adapting and upgrading its approach in an increasingly complex environment.

In recent years, the restructuring of the global economic and trading system has given rise to competition in critical sectors such as semiconductor manufacturing, critical minerals and energy supply, as well as the frequent use of policy tools such as export controls and investment screening.

According to the Global Trade Alert, a trade policy monitoring initiative, the number of new trade restrictions hit record highs between 2023 and 2025, reversing decades of gradual liberalization. In the first 10 months of 2025 alone, more than 2,500 trade-restrictive measures were imposed worldwide. Since the beginning of this year, rising security risks along key routes, including the Arctic shipping routes, the Panama Canal and the Strait of Hormuz, have disrupted global supply chains.

These developments point to a clear trend: countries are increasingly using economic tools as instruments of competition. Economic security now carries greater weight in policymaking, often at the expense of efficiency. Some nations have even sought to strengthen their competitive edge by restricting access to critical inputs or transport routes. This marks a defining feature of the geo-economic era, a sharp departure from the earlier model of globalization built on cost optimization and the international division of labor.

In this context, China is more cautious about the changes in the external environment. The outline of the 15th Five-Year Plan (2026-30) highlights the current challenges to peace and development, and notes that "China's development has entered a period of coexistence of strategic opportunities, risks and challenges, with increasing uncertainties and unpredictable factors".

Meanwhile, China's support for economic globalization remains unchanged. The outline of the 15th Five-Year Plan places greater emphasis on high-level opening-up, with refined strategies in response to current geo-economic dynamics.

At the strategic level, China continues to anchor its approach in multilateralism. It is working to build closer ties with neighboring countries, foster stable interactions among major powers and deepen cooperation with other developing nations. China has signed cooperation agreements with over 150 countries and regions along with more than 30 international organizations under the framework of the Belt and Road Initiative. Trade with the Belt and Road partner countries now accounts for more than half of China's total foreign trade. China is also promoting regional and bilateral trade and investment agreements, while continuing to develop the Hainan Free Trade Port and more than 20 pilot free trade zones. Institutional opening-up is beginning to show tangible results.

In practical terms, China is advancing opening-up along three coordinated tracks: investment, trade and rules.

In terms of investment, priority is given to building a modern industrial system, with the focus on advanced manufacturing, modern services, high-tech industries and green development. Market access to the service sector, including telecommunications, the internet, education, culture and healthcare, is being further expanded. Meanwhile, Chinese companies are shifting the emphasis of their outbound investment from securing natural resources to developing global value chains, fostering two-way flows of capital, technology and production capacity.

Foreign trade is increasingly oriented toward quality rather than scale. A key part of this shift is diversifying export markets to reduce reliance on any single destination. According to China's General Administration of Customs, trade with Africa, Southeast Asia‌, Latin America and the European Union all grew in 2025. At the same time, China is increasing its exports of intermediate goods and higher value-added products. This has enabled China to move up the value chain and deepen industrial integration with other economies.

Import tariff policies have also been adjusted. Since Dec 1, 2024, China has granted zero-tariff treatment across all tariff lines to the least developed countries with which it holds diplomatic ties. Starting May 1, the zero-tariff treatment covered 53 African countries that have diplomatic ties with China.

China is also placing greater emphasis on institutional opening-up, aligning its economic and trade frameworks more closely with advanced international standards. It is seeking to join the Digital Economy Partnership Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, while working to build regulatory and governance systems compatible with high-standard global trade rules.

Advancing institutional opening-up centers on four key areas: intellectual property protection, which is essential for both aligning with global rules and safeguarding domestic interests; green standards, with a focus on international cooperation on carbon footprints and climate-related product labeling; labor protection, aimed at raising standards in line with a people-centered development approach; and government procurement and fair competition, including regulating government subsidies as part of efforts to develop a unified national market.

The era of geo-economics does not mark the end of globalization, but a fundamental transition in how it functions. China is committed to fostering both economic growth and security in the world, continuing to advance opening-up with a balanced approach and supporting other countries in building more diversified solutions across key areas of goods, services, production, transport and energy.

The author is an associate professor at the Department of Applied Economics at Guanghua School of Management at Peking University.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.