(Yicai) March 5 -- China will expand the cross-border use of the yuan and guide enterprises to optimize their global market layout as part of efforts to stabilize foreign trade and investment amid rising geopolitical tensions and trade protectionism, according to this year’s government work report.

The report also places greater emphasis on expanding high-level opening-up, particularly in the service sector, and introduces new policy directions, including promoting the integration of trade and investment and expanding and upgrading the “cross-border e-commerce plus overseas warehouse” model.

China will actively expand autonomous opening-up this year by widening market access, with a focus on services, the report said. The country will expand pilot opening programs in areas such as value-added telecommunications services, biotechnology, and wholly foreign-owned hospitals, advance opening in the digital sector in an orderly manner, and shorten the negative list for cross-border services trade.

In the next stage of opening-up, China will prioritize opening the service sector, Bai Ming, a member of the academic committee of the Chinese Academy of International Trade and Economic Cooperation under the commerce ministry, told Yicai. During decades of reform and opening-up, sectors such as manufacturing have already achieved a high level of openness, while services still have significant growth potential, he said.

“We not only need to make up for the shortcomings, but also need to make the service sector target the world and gradually grow to be among the world’s top; we not only need to expand the scope of opening up, but also need to emphasize the quality of opening up,” Bai said.

Stabilizing Foreign Investment

To stabilize foreign investment, the report proposes expanding two-way investment cooperation and deepening reforms to the foreign investment promotion system. It also calls for ensuring national treatment for foreign-funded enterprises, implementing a new version of the Catalogue for the Guidance of Foreign Investment Industries, encouraging foreign investors to reinvest and expand localized production in China, and improving services and guarantees for foreign-funded firms.

Authorities will also guide the rational and orderly cross-border layout of industrial and supply chains, improve overseas comprehensive service systems, and strengthen risk prevention in overseas investment while protecting Chinese firms’ interests abroad.

China established more than 70,000 new foreign-funded enterprises last year, up 19.1 percent from a year earlier, and attracted CNY747.7 billion (USD108.5 billion) in foreign investment, according to official data.

Measures to Support Foreign Trade

The report also sets new priorities for stabilizing foreign trade, calling for efforts to maintain trade scale while improving its structure. These include increasing support through credit loans and export credit insurance, expanding the cross-border use of the yuan, guiding companies to optimize their global market layout, and promoting the integration of trade and investment, as well as domestic and foreign trade.

It also proposes expanding and upgrading the cross-border e-commerce plus overseas warehouse model in a regulated manner, strengthening international express delivery and logistics networks, expanding trade in intermediate goods, developing digital and green trade, and enhancing border trade.

The government will also encourage service exports, expand imports to promote balanced trade development, and further improve cross-border trade facilitation, the report said.

Compared with last year, the external environment has become more complex and volatile, Bai noted. “We cannot expect that foreign trade will continue to be smooth, but should focus on protecting key areas first, rely on ourselves, and enhance our ability to withstand shocks we are facing,” he said.

For Chinese enterprises expanding overseas, risk control and compliance in business operations are now critical, said Quan Heng, a deputy to the National People’s Congress from the Shanghai Academy of Social Sciences. The top priority is to accelerate building overseas service capabilities to support enterprises in their global expansion, Quan told Yicai.

Many small and medium-sized foreign trade businesses are also facing pressure from rising raw material prices linked to tensions in the Middle East and the continued appreciation of the yuan.

The government work report sets a goal of maintaining “the basic stability of the yuan exchange rate at a reasonable and balanced level,” and stresses that expanding the currency’s cross-border use is timely. As geopolitical conflicts intensify globally, the yuan has increasingly shown safe-haven characteristics, the report noted.

Editor: Emmi Laine