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Hello and welcome to World Today.
I'm Zhao Ying.
Coming up.
China and the US have reached a framework consensus on TikTok after two days of talks in Madrid.
How significant is this breakthrough?
Chinese President Xi Jinping has called for efforts to build a unified national market.
What does this mean and why does it matter?
China says it has reached a framework consensus with the US on resolving issues concerning TikTok through cooperation.
The two sides met in Madrid on Monday for their second day of consultation on trade and economic issues.
They also agreed on reducing investment barriers and promoting economic and trade cooperation.
China has described the discussions as candid, in-depth and constructive.
International Trade Representative Li Chenggang stressed China's determination in protecting the legitimate interests of Chinese companies.
China has always been against the politicization, instrumentalization and weaponization of technology, trade and economic issues and will never seek any agreement at the expense of principles, the interests of the companies and international fairness and justice.
Deputy Director Wang Jintao of the China Cyberspace Administration reviewed more details on the TikTok issue.
Both sides reached basic consensus regarding our full respect for the will of the business as well as the law of the market, as well as resolving the TikTok issue through such methods as entrusted operation of TikTok's US user data and content security business, as well as the license for use of algorithm and other intellectual property rights.
For more.
We are joined by Dr Zhang Gong, professor with University of International Business and Economics, and Andy Mock, tech analyst and senior research fellow at the Center for China and Globalization.
Thank you both for joining us.
And Professor Gong.
Let me start with you because officials described the discussion as candid, in-depth and constructive.
What does that say about the tone and also the progress made in this round of talks?
These are the words of Treasury Secretary Scott Benson.
As a matter of fact, there's actually another adjective added by USTR Jameson Greer.
He also added the word productive.
So you know, given these four words kind of in-depth, constructive and productive, I think This bodes very well for the things to come.
I think at least this round of dialogue or negotiation has gone fairly well.
It seems to be overwhelmingly restricted to the matter of TikTok.
I think it's pretty clear that both sides have reached some kind of agreement already.
Okay, so Andy, what do you see as the most significant achievement from this round?
Well, I think that, first of all, it's important to point out that these trade talks are not happening in isolation.
And this really has become part of a larger national security as well as a domestic politics issue for the United States.
And the US is entering this round of trade talks deeply compromised, deeply weakened.
And here's why.
So, first of all, it's well known that the US faces these structural Prices of an unsustainable budget deficits, government debt, a sporadic bureaucracy and deindustrialization which, of course, Donald Trump was elected or reelected to address.
In terms of domestic politics, I think the US is at a very fragile time with the assassination of Charlie Kirk.
And, of course, I think this weakens the ability of the US negotiators, led by Secretary of Treasury Scott Dessent, to really take a very hard stand against China.
And then finally, I think, as we've seen and it's been widely reported, China has some of the best cards to play here, whether we're looking at rare earth metals, whether we're looking at access to the civilian aircraft market, whether we're looking at soybeans.
So this is the context in which this is happening.
I think the words that John Gong used are very accurate.
But I would add to that that this is really just diplomat speak.
And the real situation here is the US is entering these talks severely compromised and i think this is driving a lot of this, and one thing i think the us can uh, have some sovereignty over is tick tock, and what is very unclear and i'm sure we will talk about is what exactly the deal looks like.
My guess is it will hinge more on the technology meaning when we talk about transferring the algorithm.
It likely will be some deprecated form of the algorithm, but I'm sure we can talk more about the details later.
Yes, yes.
And Professor Gong, let's look at this framework consensus on TikTok.
We heard that a basic framework consensus was reached there.
What is your understanding of what that consensus involves and how concrete it is at this stage?
Well, it is called a framework consensus, but I think it's pretty much a real deal here, with probably many of the details already ironed out.
As a matter of fact, again, I want to refer to USTO Ambassador Greer's words.
I think his statement right after Scott Benson's is more revealing and straightforward.
He basically said, it's a deal, it's an agreement.
And he said that you know, It's something that waits to be approved by the two presidents during that upcoming Friday conversation phone conversation, I guess, or video conversation.
So it's pretty much a very detailed plan.
It's a deal, I think.
We can talk about probably, aspects of the deal.
We can speculate about aspects of the deal later on, but it looks like right now they have something with concrete details already worked out.
Okay.
So Andy, as you mentioned earlier, the two sides reportedly agreed on measures such as entrusted operations of TikTok's US user data and licensing of its algorithm and IP rights.
What do you make of this type of arrangement and will it be able to address the concerns on both sides?
Yeah, I think that's the key question, right?
Because again, China has been very clear that the rights of companies like TikTok must be respected.
And the algorithm, the transfer of this, which is considered, I think, extremely valuable intellectual property, may not pass muster on the Chinese side.
At the same time, of course, Donald Trump.
President Trump has said this is a non-negotiable from the US side.
So as far as I know, the one path to reconcile this contradiction is a technological solution.
So, where a version, a deprecated or a weaker version of the algorithm may be licensed, transferred to a US entity, and this is one possible solution.
And again I would say that, given the dynamics of this situation you know it's not as the Americans might say, it's not over till the fat lady sings meaning that the deal is not done until the deal is actually signed, sealed and delivered.
And I think it's still talk at this point.
Okay.
And also Andy.
On Chinese side, officials noted that China will approve technology exports and IP licensing in line with Chinese law, while respecting companies' autonomy.
Could this signal a broader shift in China's approach to tech firms operating abroad?
Well, it might, right?
And again, I think the devil is all in the details.
But looked at from a systemic perspective, I think some sort of resolution, a template or a standard will certainly benefit both sides the US and China and offer greater predictability at the corporate level and for investors as well.
So I think, certainly in the abstract, you know, this is something that both sides want, but again um, what the details look like, I think remain to be seen, and you know, I think there are of course, uh personalities involved here, as we've seen on the US side.
Um, you know, President Trump makes decisions partly from uh broader national security policy concerns, but I think also from a very personal perspective, as what his own views about a particular situation are.
And this introduces, I think, a certain amount of uncertainty.
Okay, so Professor Gong, what do you make of China's statement?
Does that suggest that Beijing is becoming perhaps more flexible in regulating its tech firms abroad?
And also we hear that China stressed that it will not reach any deal at the expense of principles or company interests.
So how do you think China is going to make sure the core interests of fight dance will be protected?
Well, my understanding is that, from Chinese government's perspective, the stumbling block is respect to setting the company together, the setting of the algorithm itself.
The government's position is that the algorithm is subject to technology export control.
So it has to be somehow addressed this issue.
It appears to be the case that they've come up with sort of a smart solution to this.
The sale of the company does not imply the sale of the algorithm itself, but appears to be.
This is actually from what I've been reading so far is a licensing problem.
And this licensing mechanism, reportedly for 10 years, is subject to inspection and regulation by both sides.
And reportedly, you know, there's like a third party company, you know, look into this.
That's a, you know, interesting and also a very clever solution here.
But, you know, my comment also goes towards another issue here.
You know, my view is that this TikTok thing shouldn't have even been an issue in the United States in the first place.
You know, I think Andy talked about the broader context here.
The thing is that, you know, this is supposed to be um coming from the angle of national security from the united states perspective but i actually i think you know the the ways i mean the company has actually proposed in the past ways of addressing that in my view is this is not so much about national securities it's really about a political matter that you know you have a company that is indeed that's admitted and indeed has you know huge China has huge political influence in the U.S. domestic political landscape.
And the company is owned by a foreign company.
And I think, you know, I can understand what Washington is coming from.
And this is all very understandable.
Nevertheless, you know, I still want to point out there's a strong distinction between national security and the concern about political inference from a company that is mostly a foreign company, foreign companies um, but does it run against the United States?
Um, you know, First Amendment, right well, that's subject to debate, I guess.
Right um, you know, TikTok has tried to resort to uh, judicial venues to address this um, but it looks like there's political consensus from both the left and right on this very important issue.
You know, the political influence is really what really counts in this whole thing.
Okay so, Andy.
Professor Ghosn said that the TikTok issue has somehow been politicized by the US side.
Would you agree?
And in your view, does the current consensus truly depoliticize the TikTok issue or does it simply postpone some deeper conflicts?
Well, there's a lot of different ways to look at this TikTok question.
I think, while it's certainly true, there is bipartisan support for the optics of TikTok being a national security risk to the United States, meaning that both the Republicans, the leadership of the Republicans and the Democrats agree about this.
But I think there's another very potent domestic political issue that is often overlooked that Nancy Pelosi, who is at the time Speaker of the House, pointed out that if the government banned TikTok and this was under the Biden administration the Democratic Party would lose a generation of Americans right.
We see how pervasive and how much support there is for TikTok amongst young Americans.
And this is not just on the left.
Charlie Kirk.
You know, a big part of why he was so successful in mobilizing and uniting young Americans for a conservative cause and to support Donald Trump largely was through populists exactly like TikTok, actually precisely because of TikTok, which is why again, why President Trump has said he loves TikTok because it helped him win the youth vote.
So I think this is another very dangerous political issue that I think I'm sure that the Trump administration is well aware of.
And again I go back to this earlier point, that the US is entering this round of the whole series of trade talks deeply compromised, because again I think they see the domestic problem, fragility that only has been exacerbated by the tragic assassination of Charlie Burke but I think also shows that they really are.
It's a very brittle uh system right now because of the polarization um, and i think this really constrains uh, what they can do on the global stage.
So uh, you know, we have to see, but there are very, very powerful, potentially dangerous domestic political forces at play here that i think the trump administration is very, very aware of Okay.
So, Professor Gong, would you see this consensus as a temporary truce, or could it mark a real step towards separating business issue from?
You know the geopolitical tensions between the two countries?
Well, I think the TikTok case is a very special case here.
I totally agree with Andy's assessment of the the current political landscape in the United States.
But when it comes to TikTok, my belief is that President Trump is as much interested, as much anxious about making this deal happen as all the stakeholders.
I think he has mustered a team of investors who are mostly his good friends.
And clearly, this team of investors will stand to benefit a lot from this deal.
President Trump loves TikTok, as Andy said.
He has just opened his own account.
Immediately, he has got, I think it's 15 million followers.
So he would like to see this deal happen.
So he is also a stakeholder in my view.
So I think that shows why this negotiation has been going so smoothly.
So I think TikTok is a little bit of a different case.
I think we should separate this from the broader context of trade talk between the two countries.
Okay, so also Professor Gong.
I mean this could be a separate issue, but also the talks reaffirmed that stable China-US economic ties are critical for global growth.
So how do you think this consensus on TikTok might influence other flashpoints such as supply chain security or tariffs on semiconductors, EVs, or other strategic sectors?
Very, very minimal, very minimal.
I have to be very honest here.
I think, you know, this talk, this round of talk is, is predominantly about this TikTok matter.
Um, even though uh secretary, uh vincent, and the ustr ambassador, jameson korean, said that they also talk about other things, but i think talk is just talk and i didn't get into my speculations, that didn't get into sort of detail negotiation, negotiation about these other issues.
Um, i think these uh, the other flashpoints, as you pointed out, uh are still still there and wait to be um haggled out.
I think the good thing about this TikTok matter is that it probably produces a very good environment, a friendly environment, for both sides to go on to the next round of negotiation about other more important issues here.
But in terms of the real impact on these flashpoints, My assessment is that it's very minimum.
I mean, it doesn't change the broader picture too much.
And these are hard bargains that have to be stricken out by both parties.
Okay.
So, Andy, would you agree?
Do you think this might create momentum for discussions in other areas?
Well, you know.
So I've got a slightly different take than John in that.
You know, I think that all of this publicity about TikTok is, in a way, camouflage and kind of a fig leaf.
Because let's not forget, these are closed door discussions.
And when we look at the US, it really is in a tough spot.
So, first of all, with the rare earth metals.
Without these magnets, US fighter jets will be grounded.
I believe even Israel's Iron Dome is dependent on these magnets and other components provided from China's rare earth metals.
Um, we look at the soybean crop in the united states.
Um, you know, soybeans are piling up.
The american farmer that grows soybeans uh, is a very, very powerful political constituency that president trump feels uh, enormous loyalty towards, and i think one positive sign is, while there haven't been any soybean orders from china uh, since last may, i believe um, but this week or last week, you know, i think, at least one order has been placed showing that perhaps uh, the the saw is breaking.
And then finally again, i think it hasn't been widely reported, but you know, china can exact enormous pains on Boeing.
And Boeing is not just a civilian aircraft provider but it is a cornerstone of the US military industrial establishment.
So I think there is a lot of hidden motivations that are really driving the US to reach some sort of accommodation with China.
And of course, It's great to talk about TikTok because it's the shiny object.
Everyone look here.
Don't pay attention to what's really important.
So I think there's some of that going on as well.
Okay.
So Professor Guo Beijing also urged Washington to lift restrictions and create a non-discriminatory environment for Chinese firms.
But given the continuing expansion of the US entity list, how do you think that's going to impact the trade talks?
And what leverage does Beijing actually have to push back?
And might it consider reciprocal measures?
Well, I think one thing I do really agree with Andy is that I think things have really changed since Trump's first administration.
I think two things are happening here.
One is that the Trump administration is starting to realize the kind of being tough on China strategy is really producing here.
You know, you look at, you know period of time in April, when both sides imposed astronomical tariffs and when basically trade stopped between the two countries.
And immediately you see, you know, what's the impact on American companies and American consumers.
And then of course there's the rare earth problem and the soybean issue, the Boeing issue, and all these things are very much the leverage that Chinese side can wield over America.
So I think probably there's some soul searching going on in Washington right now with respect to China.
Another thing I want to mention is that, as part of being tough on China, is the strategy of restricting access to certain high tech technologies and products.
Keep adding Chinese companies and entities, essentially creating those choke points.
And I think over the years Washington is starting to discover that gradually, a lot of these choke points are being addressed.
If anything, it's indeed achieving the exact opposite policy objective of the original plan.
That is, it's actually driving Chinese companies to more and more investing in RD and developing indigenous to their own products, is imposing a toll on American companies that has been previously selling these products to China.
So there's also, you know, some social action about the strategy.
So I think these things combined is creating a sort of drive to rethink about the previous being tough on China policy.
Thank you, Dr Zhang Gong, professor with University of International Business and Economics, and Andy Mock, tech analyst and senior research fellow at the Center for China and Globalization.
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We'll be back after a short break.
You're listening to World Today.
I'm Zhao Ying.
Chinese President Xi Jinping has called for more efforts to develop a unified national market.
He made the remarks in an article published in Qiushi Journal.
President Xi stressed that building a unified national market is essential for creating a new development pattern and promoting high-quality development.
He also said it's crucial for China to secure an edge in international competition.
President Xi listed several key tasks, including dealing with price wars, standardizing government procurement and tenery procedures, and promoting the integrated development of domestic and foreign trade.
For more, we are joined by Li Lun, Assistant Professor of Economics at Peking University.
Professor Li, thanks for joining us.
Thanks for having me.
So, before we go into the policy details, can you explain what a unified national market means and why it matters?
Yeah, so a unified national market is a market where the market institutions and rules are basically harmonized nationwide.
So basically, we're not looking at different regulations at different places.
The regulation is fair and uniform and basically the infrastructure is interconnected between different locations.
So in President Xi's article, he mentioned some definitions for the unified national market as well.
So basically there's five unifications and one openness.
And basically the five unifications are a unified basic market institution.
Basically for, you know, the system for property rights protection for fair competition and quality standards are unified a unified markets infrastructure basically there shouldn't be any, you know, blocks of logistic of capital to flow between different locations.
There's a unified standards for government conduct.
So basically local governments need to know what they could and they could not do in terms of promoting their own development.
And the fourth item is the unified market regulation and law enforcement.
So the law enforcement and administrative policies are applied consistently.
And finally, unified factor and resource markets.
So basically, Factors like capital, like labor, like data can flow freely from different locations to reduce misallocation and to reduce waste.
And finally, there's also one openness included in the definition of a unified market, which means that we should, by setting up the unified market, we should continuously expand and open up, basically to pursue a more open market, both domestically and internationally, and to avoid the closed off operations.
And Xi stressed that the unified national market is crucial to secure an edge in international competition.
How might these domestic reforms influence China's position in global trade?
Yeah.
So in China right now there's a lot of new technologies and new innovations and in many areas, having a unified national standard is going to improve the predictability and avoid and avoid friction or surprises when dealing with international trade.
For example, in terms of the EU manufacturing, China is already producing over 70 of the world's EV in 2024.
So if we have a unified whole market, basically meaning the same standard, the same set of rules, then no matter which province are you importing your car from, it's going to be the same standard.
It's going to be the same policies.
It's going to be much easier for the foreign buyers to import the cars and also to adapt the new technology.
Basically, the more unified we have for the whole market, then the more credible or easy China will be dealing with international buyers and also to serve as a standard center for these industries in the next generation.
Yeah, and she singled out disorderly price competition and the phenomenon of involution.
How serious are these challenges in China's current economy and what measures might be taken to address them?
Yeah, we're seeing some price deflation, especially in PPI.
For example, in August 2025 the PPI fell 29, which is a kind of a signal that's showing you know this price competition in several sectors.
So there's definitely signs of price wars or over the competition in a lot of sectors.
But I mean, this is a very crucial problem and what measures can be taken to address them?
I think first is to basically to correct or rectify these low price competition among firms.
So basically, when people are setting the prices, they're always trying to undercut each other without taking more consideration into the product quality.
So I think this is not a very healthy direction for the companies to develop.
So I think there needs to be market regulations, for example, to guide firms to improve their product quality.
Basically set a premium price for premium quality.
Basically oppose the low price, low quality pricing strategy.
But this, of course, needs to be implemented in terms of local policies, in terms of integrated governance across online or offline channels.
So it requires a lot of effort.
Yeah, but how do you think regulators are going to strike a balance between curbing the harmful practices, those disorderly price competition, while preserving a healthy market competition?
Yeah, so I think a lot of cases.
You know there's some barriers in terms of, you know, market entry and exit.
So the reason that sometimes the price is too low is because you know with regular measures or standards they can't get a market share that's large enough for them to support the business.
So the only way for them to penetrate or enter a market is to cut their prices, sometimes even below cost.
So I think, with a more transparent set of rules, with a more unified market, So the companies can know which market it can safely enter and which market, for example, it doesn't belong.
So it wouldn't hurt its own interest by trying to set a low price, only to find out later that it's not a good market to enter.
So I think, reducing all the barriers, reducing all the, all the information asymmetry between different buyers in different locations, I think that's the first step towards reducing the over competition and also reducing the price competition.
Yeah, and Xi also stresses continuous expansion of opening up, while also pushing for stronger domestic unification.
So how does China plan to balance you know, welcoming foreign investments while harmonizing its domestic market?
Yeah, so I think it's all part of the same rulebook or same playbook, because expansion or opening up basically allows foreign investors and foreign competition to enter China and to participate in the construction of the local unified market.
So basically, we're trying to avoid the cases where in some cases, the bids are pre-settled.
So by banning such government procurements and and bidding, we're basically allowing foreign investment and foreign players to enter the competition and basically to construct a healthier and more predictable market domestically.
Yeah.
And very briefly if China succeeds in creating such a unified national market, what does it mean for global supply chains, for the foreign investors and China's trade partners?
Yeah.
So if China succeeds in constructing this, I think definitely it's going to lower the trade friction.
It's definitely going to meet a more transparent compliance standards for multinational companies.
It's going to have some ripple effects in terms of standardization.
Basically, there's not going to be any uncertainties about what standards from which province are we following?
So, with a unified market, basically whoever you deal with or trade with is going to have the same set of standards.
Okay, thank you, Li Lun, assistant professor of economics at Peking University.
Chinese Foreign Minister, Wang Yi, has called for China and Europe to stand together to oppose the arbitrary tariffs that violate international trade rules and harm the legitimate interests of all countries.
He made a comment in Poland, the final stop of his European tour.
The trip also took him to Austria and Slovenia.
For more.
On his European tour, we are joined by Dr Cui Hongjian, with the Academy of Regional and Global Governance at Beijing Foreign Studies University.
Dr. Cui, thanks for joining us.
Hi.
So what do you see as the primary objectives of Foreign Minister Wang Yi's trip to Austria, Slovenia and Poland?
Yes, I think now it's visited by Minister Wang to three European countries and all, of course, the member states of the European Union.
It's just a part of the effort for China to try to promote relations with the European Union and with European countries.
As we know, this year it's still the 50th anniversary for china eu diplomatic links, so i think now it's time for china to promote mutual trust and also strengthen the cooperation especially, as we know austria, slovenia and poland these three countries are very important partner for china economic and some other cooperative areas.
So I think not only just for these bilateral relations, and especially yes, China will try to promote its relations with the European Union as a whole.
Well, Wang Yi called for China and Europe to oppose arbitrary tariffs.
How might European countries, Well individually or collectively, interpret this message like?
To what extent does China's stance on tariffs align with EU trade policy?
Regarding to this tariff issue, as we know, even now, the European Union Commission reached a so-called agreement with the American side, and by a unilateral compromise way.
But certainly, I think, now for most of the European countries, they do have a lot of different views about this so-called agreement with the United States.
And, as we know yes, for some European countries, especially this time Austria, Slovenia and Poland, They are a very, very important trading partner with China on the European side.
So I think once there are some more divergences between China and the European countries on these tariff issues, certainly it will give some more space for this unilateral or protectionist approach by some countries.
So I think yes.
Now it's time for China and the European countries.
It's time for both of them to promote this mutual understanding and common stance on the tariff issue.
And, of course, I think that China should pay some more attention and also take some more efforts to keep this communication with European countries.
Well, Wang Yi highlighted China's global governance initiative during this trip.
Can you tell us more about this initiative, like what it is about?
And also in your view, how aligned are China and Europe's interests in global governance?
Also, you know, this global governance initiative has been presented by President Xi recently during the SAO summit in China.
I think it gives a very, very clear message from China's side that China tried to Find us some more cooperation with its partners and, to you know, insisted they insisted this multilateral cooperation and also, to you know, insist this international law or some other.
As we know especially, I think, for some European countries they are small or middle-sized countries.
They do have a lot of concern about the issue of global governance.
Once there are some more reasonable solutions and also sustainable global governance, I think most of the European countries they could get some more benefits from this global governance.
Well, Wang Yi stresses that with the global governance initiative, China does not intend to reinvent the wheel or replace anyone.
What do you make of his message there?
Also in recent years, not only in the United States and also some European countries, there are some views to look at China as a so-called challenger to the current international order, especially the order dominated by Western countries.
And even some views regarding China as a.
So you know, take some efforts to up down this current order.
So I think, this time not only for Mr Wang and some other Chinese officials they try to convince that China will not do something more to, you know, so-called challenges of international order.
It's not only one of the beneficiary of this current order, and even China is one of the you know founder for this current order, if we look at what happened, you know, 80 years ago.
So I think now for China and Europe, they should have some more, you know, common ground on how could we to reform this current order by keeping its stability.
Yeah, but I mean, even if China doesn't intend to replace anyone, could its push for reforms still shift the balance of influence globally?
And what might that mean for Europe?
Yes, I can understand some concerns from the European side about the especially counter situation and especially China's role in this.
You know, change of international order.
I think now it's time for European countries to have a real I mean new world view.
Especially how could European countries to accept this?
You know, reform and also the change of international order.
Especially we take a stand about the global south.
I think now for European countries, it's important for them to understand this.
You know, so-called central centralism of Western or European countries has been So.
I think now it's time for both China, Europe and some other UN global science countries to have some more agreement on how could we develop a more stable and also sustainable multipolar world.
Well, Wang Yi stated that the current problems facing Europe do not come from China.
And he also said China supports Europe in seeking true strategic autonomy, but opposes the mistaken idea of harming China's interests in exchange for deals.
How do you understand this?
Undoubtedly recently.
As we know, there are some, you know, misunderstandings between China and Europe, some European countries.
And if we look at it now some, you know, complaints from European Union institutions or some politicians from European side on China's role in this so-called Ukrainian crisis or some other issues.
But now I think it's time for both China and Europe to understand that.
Firstly, there will be some you know a huge change for the international order.
And then certainly there will be some spare over effect of this international order change to relations between China and Europe.
But of course I think that from China's side it's an attitude or stance on Europe, you know, keeps up very very, you know consistent, especially on this strategic autonomy issue.
So yes, I think that for European side it's time to understand that what's the real strategic autonomy?
So I think to get a more balanced relations between China and the United States, between China and Russia, will be a very, very important issue and also important policy for the European side once it tries to get a more comfortable situation and even try to protect its own interests in the future.
Yes.
Thank you, Dr Cui Hongjian, with the Academy of Regional and Global Governance at Beijing Foreign Studies University.
According to the National Bureau of Statistics, China's private sector investment remains well-supported this year, despite facing some challenges.
MBS spokesperson Fu Linghui said the country's economic development remains resilient, with August data pointing to steady growth momentum.
Private enterprises are not only holding their ground, they are pushing forward into some of the most important industries of the future.
Fu pointed to rapid advances in green sectors like new energy vehicles, solar products and lithium batteries, alongside new bets on artificial intelligence and embodied robotics.
Statistics show that private firms accounted for 92 of China's high-tech enterprises by the end of last year.
For more.
My colleague Zhao Yang spoke with Dr Zhou Mi, Senior Research Fellow at the Chinese Academy of International Trade and Economic Cooperation.
So Dr Zhou Mi, the National Bureau of Statistics, said the private sector investment in China remains well supported, despite facing some challenges.
So how should we understand it and what is the private enterprise's role in China's economy?
Well, if you're looking at the data, I think that China's private sectors are playing a very important role in the whole picture of the Chinese economy, like for the employment, like for the taxes payers and also for the export.
The private sectors are one of the most important reasons why China's economies are so resilient.
And they also are able to provide so many new ideas and trying to touch different areas.
So in this such kind of uncertain world, I think that if you're looking at the trade data, the private sector's I mean, the anticipations or their involvement in the foreign trade has continuously increased in the previous month.
So it shows that when we are facing some uncertainties, many of the private sector's companies, they still believe that it is the opportunity for them to grasp.
So they want to try to discover a lot of different directions to find some better opportunities.
Well, on the other hand, I will also see that private sectors are one of the main forces for creating new employment.
As the world is changing so rapidly, technology is trying to give us more you know approach for the development and the reform.
So the private sectors they will use their energy, their ideas, their skills to employ more people, more diversified people.
And these are really important for us to have a stability of the society.
And major cities like Shanghai, Beijing and Shenzhen have all rolled out measures to support the private enterprises.
So how significant are these initiatives in practice?
Well, these cities are the most important cities in China when we're talking about the economy, about the people's intention to stay there.
So all of these cities have gathered more than 10 or 20 million people.
So for the private sector, I think that is a really important kind of supporting pillars for the development.
So the government of these cities are really curious and also serious about how can they support these private sectors.
So I think that all the cities have different ideas.
Like for Beijing, they pay more attention on the high-tech areas, like for the AI, for the robots, for something to do with e-commerce.
Well for Shanghai.
Many enterprises are good at the finance, while finance is a little bit more concentrated sector.
So the SMEs or private sectors.
They are supporting the main financial institution, including the banks, no matter from China or from other countries.
Well, in Guangzhou, it is a city of more commerce related areas.
So it is trying to diversify the abilities to connecting or extending their arena to the manufacturing in the Guangdong province, in those areas.
So all of these initiatives are trying to focus on their characteristics and trying to boost the development of private sectors in a better way.
And the new private economy promotion law aims to improve the conditions for private firms.
So why do you think the Chinese government is introducing the law at this moment?
Well, you know, there was some kind of discussion about the role of the private sectors in China, because everybody knows that China is very very, you know, unique about the economic structure and we have a very strong forces of the state-owned enterprises, SOEs.
So some people worry that maybe Chinese government will only pay attention to the SOE instead of just take care of the private sector.
So I think this law has provided us with a very sound and very stable legal basis for us to know what's the functions of the private sectors and what should we put when we are discussing about the equality of development.
So the private sectors are really need more confidence and i think the chinese government is also trying to give them more.
But it's not only about the policies, about the regulations, about you know what kind of things are done by the governments.
We should have the legal basis and the laws are really important for us to have a very clear and certain direction to support the enterprises of the private sector.
So the companies they will have more confidence when they know that their rights are protected by the law and their competition with other kind of enterprises are equal.
It's a really important signal and also a basis for us to deal with policies.
And by the end of last year, private enterprises here in China accounts for over 92 of the country's high-tech firms.
So what does this say about the role of the private sector in driving innovation?
Well, the private sectors are very sensitive.
I think that many of these companies really want to gain more returns.
As we all know that in China's market the competition is very hard and a lot of companies are trying to have a better position.
So the private sectors, they really are active in doing these kind of things, as we can find that there are a lot of companies who are doing pretty good compared with traditional companies or other companies.
So I think that is the reason why they can have a higher return because they are more active in trying to attach different directions.
And new energy vehicles, AI, robotics and green industries are highlighted as areas of growth.
So do you see private firms truly playing important or leading role in these areas?
Definitely.
I would say that we can find many examples like for the new energy vehicles.
You can find that almost all the new energy vehicles in China are made by the private sectors and they are famous and they really are having different characteristics to addressing the problems or requirement of the customers.
And also, if you are looking at the wind turbines and other solar panels, you know producers.
All of them are coming from the.
You know the private sectors.
And we have to, you know, discuss also the deep sea kind of some other areas.
So for all these companies, I think that idea is very simple because they really get the messages from the government that if they are doing more on the research and development, if they are addressing the people's demands, they can have more return.
So, based on this kind of idea, I think these private sectors are able to, you know, to use the maximum use of their technology, also the technology from the cooperation with the university, with the research center, and trying to improve their efficiency and give the people more surprises of the products and the services.
And despite policy support, we know that private firms are still facing some challenges.
So what challenges remain and what does the future look like for entrepreneurs at the heart of China's growth story?
Well, I would say that the world is full of so many uncertainties.
I think the biggest challenge is coming from this uncertainty.
We know that global supply chains are reconstructuring and the US is putting more protectionism measurements on the way of doing businesses.
For the small and medium-sized enterprises or other private sectors, I think that the core is whether their technology can be applied in a big enough market and whether they can have a stable policies environment.
In China, I think there's no problem about that.
But if they are going to invest in other countries, they have to deal with these issues.
And they have to deal with also some of the issues about the technical issues, intellectual property rights protections and also a lot of other you know a kind of uh non-tariff barriers.
So for them i i would say that is a really are a big worry for them, but i don't think that they are hesitant to do that because they are still trying to be very flexible and also trying to be suitable for the local markets respectively.
Definitely, i will believe that the cooperation between the governments of china and other training partners will also enhance their abilities of the private sectors in those kinds of areas.
And we will help them to do more to expand their arenas and also serve the demands of the local countries of other markets.
That's all the time we have for this edition of World Today.
I'm Zhao Ying.
Thank you so much for listening.
See you next time.
