[Editor's note]

On November 8, the Shanghai Institute of International Studies held the "Economic Security or Economic Pan-Security? -- The "Global Challenges of Pan-Economic Security and China's Response" Report Conference "was released at the meeting, at which the research report" Global Challenges of Pan-Economic Security and China's Response "was released. The report focuses on economic security and pan-economic security, explores the differences between the two, analyzes global governance challenges under the new historical background and circumstances, and finally proposes countermeasures on how China can balance maintaining economic security and responding to pan-economic security.

As the report points out, the combination of shocks such as strategic competition among major countries, COVID-19, and geopolitical conflicts has made all countries pay attention to economic security to a high point. At the same time, some countries use censorship, sanctions and other means under the banner of "national security" in an attempt to curb the development of other countries. How to understand our own and other countries 'real concerns about economic security and properly respond to the abuse of "national security" by some countries is also an important part of balancing the relationship between development and security and realizing China's modernization. The Paper News (www.thepaper.cn) has successively published the contents of this report. This article is the last and sixth chapters of the report. The full report was compiled by Wang Zhongmei, director of the Institute of World Economics at the Shanghai Institute of International Studies.

Chapter 6: China's response to pan-economic security

National security is the foundation and prerequisite for the steady and long-term development of China's modernization. We must fully implement the overall national security concept, improve the system and mechanism for maintaining national security, achieve high-quality development and high-level security and positive interaction, and effectively ensure the long-term stability of the country. It is necessary to improve the national security system, improve the public security governance mechanism, improve the social governance system, and improve the foreign-related national security mechanism. [1]Under the new situation, economic security is the cornerstone of national security. Faced with the impact of pan-security, China needs to strengthen the construction of a strategic economic security architecture, restructure the foreign economic cooperation architecture, optimize geo-spatial cooperation, and strengthen the construction of endogenous forces for economic development.

1. Build my country's strategic economic security architecture

The development stage determines the highly confrontational nature of economic competition, the size of the market determines the high risk of economic security, and the competition of basic economic systems determines the long-term nature of economic security issues. General Secretary Xi Jinping emphasized,"We must resolutely safeguard our country's development interests, actively prevent various risks, and ensure national economic security." [2]The report of the 20th National Congress of the Communist Party of China clearly stated that we should adhere to economic security as the basis and use a new security pattern to ensure the new development pattern. Strategic economic security issues are related to the continued stability of my country's socialist economic system in the medium and long term, and involve the reconstruction and optimization of systemic policy frameworks related to national security.

The first is to ensure the security of the socialist market economic system. Against the background of competition between major powers between China and the United States, Western countries 'accusations against China's competition fairness are related to the security of China's socialist market economic system. Maintaining the security of the market economic system with China characteristics is the fundamental goal of maintaining the country's strategic economic security. The high-level socialist market economic system first emphasizes the security of the socialist market economic system. We must unswervingly consolidate and develop the public economy, unswervingly encourage, support and guide the development of the non-public economy, ensure that all types of ownership economies use production factors equally in accordance with the law, participate in market competition fairly, and receive equal legal protection, and promote the advantages of all types of ownership economies. Complementing and developing together. It is necessary to build a unified national market and improve the basic system of the market economy. [3]Economic security under the overall security concept, while considering short-term security factors such as food and energy supply guarantees, systemic financial risk prevention, and external economic risk shocks, it also needs to combine the current changes in the international political and economic situation, and analyze strategic economic security issues from a forward-looking, dynamic and long-term perspective.

The second is to maintain the foundation for the security of my country's industrial development. As my country and the world's major powers realize the development and transformation from a "catch-up" stage to a "parallel" stage in major industrial fields, in the new development stage, effective industrial ladder leapfrogging is an important basic prerequisite for my country's economic security. [4]my country's current growth problem is largely caused by the competitiveness of industrial structure. Constrained by the growth of total factor productivity, the decline in marginal output of factor inputs continues to drag down growth. At present, China is facing a new round of production capacity structure adjustment period and facing regional and urban and rural structural adjustment problems. Faced with many development problems in the primary stage of socialism, in the future, my country can optimize the industrial layout based on local resource endowments, industrial base and market demand, avoid homogeneous competition and promote the coordinated development of industries and regions. Deepen supply-side structural reforms, accelerate the elimination of backward production capacity, develop emerging industries and green industries, and promote continuous industrial transformation and upgrading to maintain medium and above growth rates.

The third is to enhance the construction of social and economic resilience. The core task of maintaining national economic security is to improve the system's resilience to major risk shocks and the self-repair ability of the economic system. Our country needs to find a way for ultra-large economies to remain independent and long-term coexistence with the world, enhance the self-survival ability of the national economic system under the impact of extreme risks, improve the corresponding soft and hard facilities, enhance the resilience of the economic system, and enhance the self-stability of the national economic system. Self-repair capabilities. In response to external market shocks, we will actively strengthen economic and trade cooperation with other countries, reshape the new industrial chain division of labor system with a unified domestic market as the core, and reconstruct the international cooperation market space. Jointly create a new pattern of economic globalization that is open, inclusive, universally beneficial, balanced and win-win. [5]

2. Reconstruct the foreign economic cooperation structure through cooperation with new production capacity

China's "three new things" represented by new energy vehicles, lithium batteries and photovoltaics have triggered widespread controversy in the United States and Europe. Developed countries in the United States and Europe concocted the "three new things" theory of overcapacity and threatened to adopt countervailing and punitive tariff measures. In response to the current growing theory of new overcapacity, I should prepare for a rainy day, start from structural and root causes, proceed from the high-quality joint construction of the "Belt and Road", optimize the layout of foreign investment, and strive to build a medium-and long-term trade balance between China and developed countries. The industrial foundation. Although the added value of China's manufacturing industry far exceeds the combined value of the United States, Japan and Germany, accounting for nearly one-third of the global market. However, most of them are concentrated in medium and low value-added industries, and are located in the middle and lower reaches of the value chain in the field of high-tech industries. Moreover, the external fragmented market is still difficult to achieve centralized and unified replacement of the China market in the short term. International production capacity cooperation will promote domestic advantageous enterprises to go abroad, realize the transfer of industries and production capacity, enhance the internal strength and resilience of Chinese enterprises, and obtain richer economic benefits.

Under the global industrial chain division of labor system, due to market size, industry and technology limitations, it is difficult for developing countries and some smaller developed countries to establish a complete industrialization foundation in the short term. In particular, intermediate products for technological integration need to be imported from external markets and supplemented by manufacturing power. New production capacity cooperation centered on China will incorporate more countries into regional industrial value chains and into emerging economic cooperation systems. Change the pattern of global industrial and supply chains, promote trade liberalization and investment facilitation, break down trade barriers, promote the optimal allocation of global resource factors, and promote the interconnection, stable growth and sustainable development of the global economy. China is a world leader in new energy industries such as wind power, solar energy, hydropower, nuclear power, thermal power energy-saving units and ultra-high voltage power transmission and transformation. [6]It is possible to establish a transportation and logistics system for bulk commodity export with traditional fuel producing countries such as Saudi Arabia, Iran, United Arab Emirates and other countries. Improve logistics infrastructure such as ports and railways, transport mineral products and crude oil and other resources to major transportation hubs and freight ports, and improve the efficiency of cargo circulation and transactions. It also repays loans through mineral and energy exports to achieve deep binding of internal and external interests and form a virtuous cycle of energy cooperation and financial cooperation to promote economic and trade exchanges. At the same time, we will strengthen cooperation with Brazil in the field of digital economy and form a deep integration with Russia in basic science fields such as aerospace, nuclear energy, and basic mathematics in the high-tech industry.

3. Strengthen the endogenous power of economic development with major structural reforms

The Third Plenary Session of the 20th Central Committee of the Communist Party of China made systematic arrangements for further comprehensively deepening reforms, emphasizing the construction of a high-level socialist market economic system, improving the system and mechanism for promoting high-quality economic development, building a system and mechanism to support comprehensive innovation, improving the macroeconomic governance system, and improving the system and mechanism for integrated urban and rural development. The high-level socialist market economic system is an important guarantee for China-style modernization. We must give better play to the role of market mechanisms, create a fairer and more dynamic market environment, optimize resource allocation efficiency and maximize benefits, both "live" and "manage", and better maintain market order and make up for market failure, smooth the circulation of the national economy, and stimulate the endogenous motivation and innovative vitality of the whole society. [7]

The first is to reconstruct the domestic demand power foundation of my country's economy with the construction of a welfare economic system with China characteristics and achieve a well-ordered cycle of domestic consumption and production relations. my country's development dividends and growth space in the fields of investment and net exports have been exhausted, and future growth depends on the effective stimulation of consumption potential.

General Secretary Xi Jinping pointed out that consumption is an important engine of my country's economic growth, and domestic demand is the basic driving force for China's economic development. [8]Medium-and long-term reforms need to take into account "common prosperity" as the essential requirement of socialism with China characteristics, and activate the potential of the consumption economy by increasing residents 'income levels. Stimulate potential consumption, expand profitable investment, and form a virtuous cycle in which consumption and investment promote each other. [9]Effective income mobility is the way to solve the problem of consumption growth in China. Since the second half of 2021, the growth rate of my country's consumer economy has continued to decline, and low-income groups have increased their willingness to save preventively due to unclear economic prospects. The People's Bank of China has injected a large amount of liquidity into the market, and a large amount of funds have been transferred from corporate "legal person" accounts to "rich people" savings accounts. This has neither been effectively used for physical relief and expansion of reproduction, nor has it formed an effective stimulus for the consumer economy. The widening gap between rich and poor continues to restrict and drag down economic growth.

The second is to re-plan major reforms and innovations in areas such as the currency issuance mechanism. Money creation caused by the rapid expansion of China's real estate market has long driven double-digit growth in M2 issuance. In response to the accumulated financial risks caused by the real estate of currency issuance, it is recommended to strengthen coordination and cooperation with other countries in monetary policies based on the internationalization of RMB. By evacuating the domestic RMB stock, reconstructing the outflow channels of domestic money stock, and rebuilding the domestic and international RMB market circulation system, we will completely solve the problem of accumulation of financial risks caused by excessive real estate currency issuance. In addition, we consider the issue of reform of currency issuance methods from the perspective of currency issuance and residents 'welfare. At present, China is facing a fundamental contradiction that the rate of return on capital is greater than the rate of economic growth as described in "Capital in the 21st Century". [10]Capital gains squeeze entity profits and raise industry and government sector debt. Against the background of the "stalling" of the real estate economy, the formation of new currency issuance methods and sustainable financial order need to consider major strategic layout issues for the circular reconstruction of the economic system.

4. Building a safe space system with new global governance

Build a stable production and trade space with new regional investment and trade agreements, coordinate development and security, and promote new global governance. Strengthen the bottom-line thinking of economic space security, promote the joint commitment of the parties to ensure the security of the industrial chain and supply chain, and alleviate security anxieties caused by geopolitics through increased trust, cleared doubts and joint commitments. At present, the intensification of competition among major powers is gradually eroding the dynamic foundation for the expansion of market space needed to maintain world economic growth, and has undoubtedly brought obstacles to the expansion of effective market space for future world economic growth. [11]The "decoupling and disconnection" situation faced by the security of my country's industrial and supply chains is even more risky under the discriminatory clauses of Western countries and the import restrictions of key technologies and parts.

General Secretary Xi Jinping also pointed out that "small courtyards and high walls" and "decoupling and breaking links" go against the trend of history and will only harm the common interests of the international community. [12]Facing the golden decade of high-quality joint construction of the "Belt and Road", we will strengthen the construction of consensus and soft constraints on economic security. Make good use of international cooperation mechanisms such as BRICS countries, strengthen political and economic ties with countries in the world's "fringe", and make use of the development stages of some developed countries in Europe and China in the high-tech field and the geographical and spatial dislocation of the market to reduce political sensitivity and potential conflict risks.

Open up new paths and new channels for international economic and trade cooperation, and seek external breakthroughs and key rear guarantees. For example, under the framework of the "Belt and Road" construction, we will further expand the construction of oil and gas pipelines on the road and reduce the current situation of my country's high dependence on the "two gorges and one sea" for the import of strategic key mineral resources. In particular, we use international market resources to promote the optimization and upgrading of the domestic energy structure, accelerate the development of clean energy, enhance the linkage effect of internal and external market resources, improve key shortcomings, enhance the resilience of the industrial chain, alleviate oil shipping safety issues, and attach great importance to energy Infrastructure security. To deal with external risks and ensure internal economic and social stability. Build a financial safety net, use international cooperation mechanisms such as BRICS countries, accelerate the construction of local currency settlement and payment systems, establish emergency foreign exchange reserve banks and other measures to safeguard the financial security and financial sovereignty of developing countries, and help developing countries 'currency stability, thereby strengthening International financial market and capital market circulation, improve the quality and upgrade international financial cooperation, reduce financial security risks, and inject more certainty into the world economy.

(The author of this chapter is Wang Yuzhu, a researcher at the Institute of World Economics at the Shanghai Institute of International Studies. The title of this article was prepared by the editor.)

Notes:

[1]"Communique of the Third Plenary Session of the 20th Central Committee of the Communist Party of China," Ministry of Foreign Affairs of the People's Republic of China, July 18, 2024, https://www.mfa.gov.cn/zyxw/202407/t20240718_11456231.shtml, August 20, 2024.

[2]"Speech at the 28th Collective Study Session of the Political Bureau of the 18th CPC Central Committee", China Communist Party News Network, November 23, 2015, http://cpc.people.com.cn/xuexi/n1/2017/0704/c385474-29381645.html, August 15, 2024.

[3]"Communique of the Third Plenary Session of the 20th Central Committee of the Communist Party of China," Ministry of Foreign Affairs of the People's Republic of China, July 18, 2024, https://www.mfa.gov.cn/zyxw/202407/t20240718_11456231.shtml, August 20, 2024.

[4]"Communique of the Third Plenary Session of the 20th Central Committee of the Communist Party of China," Ministry of Foreign Affairs of the People's Republic of China, July 18, 2024, https://www.mfa.gov.cn/zyxw/202407/t20240718_11456231.shtml, August 20, 2024.

[5]"Joining the Belt and Road Initiative": Major Practices in Building a Community with a Shared Future for Humanity,"Ministry of Foreign Affairs of the People's Republic of China, October 10, 2023, https://www.mfa.gov.cn/chngxh/tyb/gdxw/202310/t20231010_11158751.html, August 19, 2024.

[6]See the Research Group of the Institute of Industrial Economics, China Academy of Social Sciences: "2023 Evaluation Report on the High-Quality Development of Energy in China", edited by Shi Dan,"Energy Blue Book: Frontier Report on China's Energy Development (2023)", Social Science Literature Press, 2023.

[7]"Communique of the Third Plenary Session of the 20th Central Committee of the Communist Party of China," Ministry of Foreign Affairs of the People's Republic of China, July 18, 2024, https://www.mfa.gov.cn/zyxw/202407/t20240718_11456231.shtml, August 20, 2024.

[8]"Forming a virtuous cycle in which consumption and investment promote each other", Xinhuanet, December 19, 2023, http://www.xinhuanet.com/politics/20231219/a0a206daa2804564b93217b1f02c5524/c.html, August 11, 2024.

[9]"Strive to Expand Domestic Demand and Continue to Stimulate Potential Consumption," National Development Commission of the People's Republic of China, June 13, 2024, https://www.ndrc.gov.cn/wsdwhfz/202406/t20240613_1386869.html, August 13, 2024.

[10]See [France] Thomas Piketty: "Capital in the 21st Century", translated by Ba Shusong and others, CITIC Press, 2014, pp. 589-590.

[11]Wang Yuzhu: "World Market Expansion Dilemma and Governance from the Perspective of Economic Circulations", Asia-Pacific Economy, No. 5, 2023, pp. 1-10.

[12]"Promoting the Five Principles of Peaceful Coexistence and Working Together to Build a Community with a Shared Future for Mankind-Speech at the Conference Commemorating the 70th Anniversary of the Publication of the Five Principles of Peaceful Coexistence", Ministry of Foreign Affairs of the People's Republic of China, June 28, 2024, https://www.mfa.gov.cn/zyxw/202406/t20240628_11443295.shtml, August 7, 2024.