China vows all-out efforts on trade and FDI in fresh bid to kick-start economy
South China Morning Post
5 min read
China has pledged all-out efforts this year to stabilise foreign trade and draw overseas investment, as it tries to defuse external risks and support its ailing economy.
The Ministry of Commerce outlined its key goals for 2025 on Sunday, including opening up the China market wider, deepening international collaboration on supply chain building, and stabilising foreign trade and capital flows.
In a statement on its website following a two-day annual meeting, the ministry also pledged to boost domestic consumption, "actively" integrate with international trade standards and practice, deepen bilateral, multilateral and regional economic and trade cooperation, "prevent and defuse key risks" and "firmly safeguard national security".
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The commerce ministry's meeting coincided with a two-day visit to China by British finance minister Rachel Reeves.
Reeves, who arrived in Beijing on Saturday, joined Chinese Vice-Premier He Lifeng in co-hosting the China-UK Economic and Financial Dialogue - an event revived after nearly six years marked by friction over issues from security to Beijing's human rights record and the national security law in Hong Kong, a former British colony.
Chinese Vice-Premier He Lifeng and British Chancellor of the Exchequer Rachel Reeves address a press conference after the 11th China-UK Economic and Financial Dialogue, in Beijing on Saturday. Photo: AFP alt=Chinese Vice-Premier He Lifeng and British Chancellor of the Exchequer Rachel Reeves address a press conference after the 11th China-UK Economic and Financial Dialogue, in Beijing on Saturday. Photo: AFP>
China's post-Covid economy has been struggling to take off in earnest amid a property market downturn and weak investor confidence. It is also bracing for more uncertainties with Donald Trump set to return to the White House next week.
Trump said on the campaign trail that he would impose tariff increases of 60 per cent or more on goods imported from China, and as president-elect vowed to declare an extra 10 per cent duty on Chinese products.
Reeves, whose formal title is chancellor of the exchequer, also met Vice-President Han Zheng separately in Beijing on Saturday before travelling to Shanghai.
In Beijing, both sides agreed to deepen cooperation in financial services, trade, investment, and the climate to support economic growth, "while being frank and open on areas of disagreement", according to a press release by the British government.
"Overall, this government's re-engagement with China sets us on course to deliver up to £1 billion (US$1.22 billion) of value for the UK economy," the statement said.
It added that Reeves had also raised Britain's concerns around "the respect of protected rights and freedoms in Hong Kong".
At Saturday's dialogue, Vice-Premier He called for closer cooperation with Britain in areas including financial services, biomedicine and artificial intelligence (AI).
Meeting the press after the event, He said Hong Kong could also be a "bridge" for closer cooperation with Britain as long as both sides "respected each other" and maintained a healthy relationship.
Professor Lau Siu-kai, a consultant at semi-official think tank the Chinese Association of Hong Kong and Macau Studies, said: "If the UK genuinely wants to repair and improve relations with China, Hong Kong is poised to play a useful role, primarily in the economic, trade, and financial areas."
Stronger ties between Britain and Hong Kong ties would benefit both sides in the new Trump era, Lau said.
"Both the UK and Hong Kong will inevitably be adversely affected by the 'America first' policy of Trump and both want to seek more opportunities for international cooperation," he said.
In Shanghai on Sunday, Reeves held talks with mayor Gong Zheng. According to local media reports, Gong said he welcomed British investments in clean energy, advanced manufacturing, healthcare, financial markets, universities and research institutions, as well as the digital economy and AI.
China is Britain's fourth biggest trading partner, with official Chinese data showing bilateral trade rose to US$89.3 billion in the 11 months to November 2024. London is also one of the major markets for offshore yuan trading.
Pan Gongsheng, governor of the People's Bank of China (PBOC) met his Bank of England counterpart, Andrew Bailey, on the sidelines of the economic dialogue in Beijing on Saturday. They discussed topics "including their respective domestic economic situations, financial stability, and financial cooperation", the Chinese central bank said in a statement.
On Friday, Pan met top executives from HSBC, Standard Chartered Bank and the London Stock Exchange.
Foreign direct investment (FDI) in China has fallen sharply since 2023 as investors remain wary of China's slowing growth and strained ties with the United States.
FDI between January and November fell by nearly 28 per cent year on year to 749.7 billion yuan (US$102.2 billion), according to the commerce ministry.
For the first 11 months of 2024, China's exports rose 5.4 per cent from a year earlier to US$3.24 trillion and imports grew 1.2 per cent to US$2.36 trillion.
Observers have said that China would need to pivot to consumption-based policies this year amid likely trade headwinds, mainly stemming from Trump's tariff policies.
Retail sales in China edged up 3.5 per cent year on year to 44 trillion yuan in the January-to-November period, after Beijing rolled out a nationwide consumer trade-in programme. Funded by sovereign bonds, the programme covers a wide variety of items including household appliances, electric scooters and cars.
