In the face of the major opportunities and challenges brought about by a new wave of technological revolution and industrial transformation, innovation has become a topic of particular concern for all countries as it is a key factor in pushing forward a country's continued development.

In September 2023, the World Intellectual Property Organization (WIPO) released the "Global Innovation Index (GII) Report 2023." The report showed that China, Turkey, India, Vietnam, the Philippines, and Indonesia are the middle-income economies that have made the most headway in innovation over the last decade. Among them, China is the only one that ranked among the top 30.

"China is far ahead in global innovation performance; it is close to the top 10 of the GII ranking and still the sole middle-income economy within the GII top 30," Sacha Wunsch-Vincent, head of the section of Economics and Statistics Division, and co-editor of The GII at the WIPO, told the Global Times in an exclusive interview.

A close look at the GII reports revealed that since the first release of the GII report in 2007, China's overall ranking has shown a steady upward trend. In this year's ranking, China ranks 12th, having climbed 31 spots from its lowest ranking in previous years (43rd in 2010). The report also specially mentioned that China is the only middle-income economy among the top 30, followed by Japan in the 13th place.

Steady progress in innovation

Data in the GII report showed that in 2023, China ranked first globally in six specific indicators, including the proportion of creative goods export in total trade volume, domestic market scale, labor productivity growth rate, PISA scales in reading, math, and science, the ratio of trademarks by origin to GDP, and the ratio of utility models by origin applications to GDP.

"The GII rankings are compiled based on about 80 indicators which can be gleaned from the country profiles. The indicators are structured around innovation input and innovation output dimensions and cover fields such as human capital, research and development, venture capital, high-tech manufacturing, and patents, but also rank intangible assets and creative goods and services," Wunsch-Vincent explained.

A special excerpt from the GII also showed that the world's five biggest science and technology (S&T) clusters are now located in East Asia, with China emerging as the country with the greatest number of clusters as Tokyo-Yokohama leads as the biggest S&T cluster.

"The emergence of Chinese top science and technology clusters does not come as a surprise with all the science and innovation activity that has propelled China forward in the GII. It is impressive nonetheless - some of the top-ranked cities or regions are obvious leaders such as around Beijing or Shanghai," Wunsch-Vincent noted to the Global Times.

"In addition, there are many cities or clusters emerging, which are new and not that well-known yet as science and technology hubs around the world. In that sense, the ranking also allows the rest of the world to better understand the geography and potential of innovation in China," he said.

Feng Xingke, secretary general of the World Financial Forum and director of the Center for BRICS and Global Governance, told the Global Times that this reflects the shifting of the global center of technological activities to the East, with East Asia leading global technological innovation.

"The increase in the number of Chinese technology clusters is mainly due to China's continuous strengthening of regional technological innovation development strategies in recent years, forming an ecological system for technological innovation with central coordination, local healthy competition, and mutual development," Feng said.

Analysts generally believe that China has made remarkable achievements in the fields of new energy, high-speed rail, modern information, new materials, and artificial intelligence, and related new industries and products have shown strong growth momentum.

Feng pointed out that one important reason for China's innovation progress lies in the strong support from the government.

In recent years, the Chinese government has invested a large amount of funds in major scientific and technological innovation research and development, and has provided a favorable policy and business environment for scientific and technological innovation, strengthened the team of scientific and technological innovation talents, and laid a solid foundation for technological innovation progress, he said.

In a previous interview with the Global Times, Manuel C. Menendez, founder and CEO of MCM Group Holdings, hailed the great achievements that China has made over the last decade.

He noted that in addition to the country's policy, it is necessary to give credit to Chinese entrepreneurs and China's ability to take a policy and make it work step by step.

According to Wunsch-Vincent, an important reason for China to progress rapidly is that China has "prioritized innovation and science and technology policy as a means to achieve economic growth and development for many decades now. It has consistently increased its innovation expenditures and has built an impressive innovation ecosystem."

"I also believe that China has a dynamic start-up scene with abundant young and highly skilled human capital. These factors have helped China achieve the rise that the GII describes, and to stand out among other middle-income economies," he noted.

China has a long tradition of placing high emphasis on innovation and the capability to turn applications into industrial development. China is also sharing its outcomes from scientific development with other regions of the world, which experts pointed out will help facilitate global development.

For example, in November 2023, China hosted the first Belt and Road Conference on Science and Technology Exchange in Southwest China's Chongqing Municipality. China has signed intergovernmental science and technology cooperation agreements with more than 80 Belt and Road Initiative (BRI) partners, jointly building a comprehensive, multi-level, and wide-ranging science and technology cooperation pattern, Xinhua reported.

"China's growth - both economic and also innovation-wise - is significant both for the world and the wider region. China has made notable strides in innovation in fields such as information technology, health, electric vehicles and batteries with commercialized products, and nanotechnology or other deep science fields," Wunsch-Vincent said.

However, several experts also noted to the Global Times that such innovation in China also faces increasing challenges as some people in the West actively call for so-called "technological decoupling" from China.

"China should establish an open international cooperation mechanism for scientific and technological innovation and clearly oppose 'technological decoupling.' It is necessary to build a systematic, multi-level, comprehensive, and targeted international strategy for scientific and technological innovation cooperation," Feng told the Global Times.

"China should continue to strengthen innovation cooperation with the US, deepen scientific and technological cooperation with Russia, make good use of European scientific and technological innovation resources, seize opportunities for innovation cooperation with Japan and South Korea, and actively participate in the formulation of international regulations for emerging technologies," Feng said.

Middle-income economies full of development potential

The GII, launched in 2007 and is now in its 16th edition, takes the pulse of innovation by tracking the most recent global innovation trends and benchmarking about 130 countries worldwide and the top 100 science and technology clusters on their innovation performance.

With the theme "Innovation in the Face of Uncertainty," the GII 2023 report used the average of the input and output sub-indices to track the global state of innovation. The highlight is that innovation investments showed mixed performance in 2022 within a context of many challenges and a downturn in innovation finance, Wunsch-Vincent said.

According to Wunsch-Vincent, in 2023, global scientific publications, research and development (R&D), venture capital (VC) deals, and patents continued to increase more than ever. However, growth rates were lower than the exceptional increases seen in 2021. In addition, the value of VC investment declined and international patent filings stagnated in 2022. In particular, reflecting a deteriorating climate for risk finance, the value of VC investments declined sharply in 2022 from an exceptionally high level in 2021. And the VC volumes declined by over 30 percent in 2023 relative to 2022, and are expected to be only half of the amount invested in the VC boom year of 2021.

Wu Jinxi, Director of the Strategic Emerging Industries Research Center at the School of Social Sciences of Tsinghua University, told the Global Times that in the face of global issues such as rising R&D costs and slowing patent growth, the efficiency of scientific research and innovation system should be improved first, and scientific research resources should be allocated reasonably, "putting money where it matters most."

Despite downward pressure on the global economy, countries should not reduce investment in scientific research, he said.

However, many experts and analysts from various countries also see the current situation of opportunities and challenges coexisting. The 2023 GII report shows that the innovation performance of middle-income economies as a whole is quite remarkable. In the last decade, China has become the fastest-growing middle-income economy on the GII rankings along with Turkey, India, Vietnam, the Philippines, Indonesia, and Iran.

A total of 21 economies, mostly in sub-Saharan Africa, Southeast Asia, East Asia, and Oceania, are rated by the report as "exceeding expectations" in terms of their innovation performance relative to their level of economic development. India, Moldova, and Vietnam have outperformed expectations for 13 consecutive years.

According to Feng, the reason behind these economies' performance exceeding expectations is mainly the world governance pattern of globalization and multilateralism. In the context of the new round of scientific and technological revolution, the transformation and upgrading of traditional industries and the development of emerging industries have provided a historic opportunity for developing economies to catch up with developed economies in new areas, he noted.

Compared with Western countries using technological monopoly advantages to contain developing countries and emerging economies, China is more willing to share innovative technologies through technology transfer or joint development said Liang Zhihua, president of Southeast Asia Social Science Research Center.

Liang believes that with the export and sharing of China's scientific and technological innovation, the digital transformation of middle-income and emerging economies, including Malaysia, will further be propelled.

Wunsch-Vincent noted that the GII report is a "tool for action" regarding innovation policy for governments around the world. A survey carried out by WIPO in 2022 showed that 70 percent of WIPO member states were using the GII to improve innovation ecosystems and metrics, as well as being a benchmark for national innovation policies or economic strategies.

In Feng's view, middle-income economies have the corresponding economic strength, scientific and technological foundation, and late-comer advantages, and have the opportunity to become a new engine of global innovation, but this is not an inevitable result.

"Only by balancing the relationship between the government and the market, formulating sound industrial and financial policies, building a market-oriented, legalized, and internationalized business environment, and stimulating the motivation and vitality of enterprises to innovate through market mechanisms can middle-income economies be expected to become the main force of innovation," he said.

China's cyberspace regulator will conduct a special campaign to crack down on the behavior of discrediting companies and entrepreneurs, the latest move aimed at better serving China's private economy. 

The campaign will focus on rectifying the spread of false and untrue information related to enterprises, deliberately spreading rumors to discredit enterprises and entrepreneurs, and extorting enterprises in the name of "public opinion supervision," according to a notice published by the Cyberspace Administration of China (CAC) on Friday.

The regulator also urges website platforms to strengthen the review and management of enterprise-related information, and promptly remind relevant account entities to strictly abide by laws and regulations.

The campaign is in line with China's efforts to boost the development of its private economy. China has long attached great importance to the private sector, encouraging it to play a bigger role in stabilizing growth, market insiders said. 

China should lift some institutional obstacles to further optimize the investment environment for the country's private sector in order to stimulate market vitality for investment, while ensuring domestic firms feel safe investing funds, Yin Yanlin, deputy director of the General Office of the Central Financial and Economic Affairs Commission told the Global Times in an earlier interview. 

The work report of the Standing Committee of the 14th National People's Congress (NPC), China's top legislature, last week pledged to accelerate the formation of a law aimed at promoting the development of the private sector, sending a strong signal of lawmakers' commitment to making continuous improvements in the business environment.

Data from the National Bureau of Statistics showed the private investment in fixed assets slipped 0.4 percent in 2023 from the previous year.

The campaign launched by CAC also highlighted that it will regulate content generated by artificial intelligence (AI) on the internet. 

The work specifically includes the identification of AI-generated content, optimization of the business network environment, rectification of the confusion around enterprise-related infringement on private information, cracking down on illegal internet news and information services, as well as rectification of false and vulgar livestreaming content.

In terms of AI, the cyberspace regulatoe urged website platforms to mark AI-generated information and tag fictional content, as well as handle illegal accounts that use generative or synthetic algorithm technology to create rumors and marketing hype.

This year, AI-related industries in China are expected to see significant development, in which the application of generative AI technology is a particular focus, Wang Peng, an associate research fellow from the Beijing Academy of Social Sciences, told the Global Times.

"This means it is necessary to improve regulatory policies to ensure the responsible use of AI technologies and protect data privacy," Wang said.
An interim regulation on the management of generative AI services went into effect in August 2023. The CAC said that the move was aimed at promoting the sound development of generative AI and its standard applications, safeguarding national security and social public interests, and protecting the legitimate rights and interests of citizens, legal entities and organizations.

China's first comprehensive AI regulation, named Interim Measures for the Management of Generative Artificial Intelligence Services, covers an array of measures aimed at enhancing generative AI technology while establishing basic norms for providers of generative AI services.

Some Indians may truly believe that trade protectionism can help accelerate the localization of smartphone manufacturing in the country, but those people are going to be deeply disappointed by the result.

It was reported by Indian media outlets that there are three big changes that the Indian government wants Chinese smartphone companies to make. First, Chinese brands should have Indian management. Second, they should appoint Indian distributors. Third, they should use local contract manufacturers, according to Business Today, an Indian publication. All three requirements are protectionist measures that will seriously disturb the market order.

People were apparently stunned by Indian media's bluntness in admitting that Chinese companies were being forced to adopt Indian management, distributors, and manufacturers. The situation reflects a rise in trade protectionism in India, under which nobody even feels ashamed in openly talking about protectionist measures. It's a shame, though, for the Indian economy.

In recent years, India has stepped up moves against Chinese smartphone makers after benefiting from their capital and technology. Chinese smartphone producers have been the harder-hit targets of selective enforcement and targeted interference.

Although forced localization measures may give a short-term boost to India's manufacturing sector, it will be like drinking poison to quench one's thirst. In the long run, protectionist measures will seriously undermine the confidence of investors in India's market.

While some Indians have been focusing on nationalism, protectionism and using border disputes as an excuse to suppress Chinese enterprises, less attention has been paid to the real story of Chinese companies' localization process. Chinese smartphone enterprises have never refused to promote localization. On the contrary, they have been adopting a proactive approach to promote localization, hoping their strategy can help them win more customers in the Indian market. For example, The Times of India reported in July 2023 that China's Xiaomi would focus more on retail outlets to revive smartphone sales after years of big bets on e-commerce. This meant that Xiaomi would hire more in-store promoters, creating more jobs in India.

The localization strategies Chinese smartphone enterprises have adopted will benefit the Indian economy. However, despite achievements, they continue to face many challenges that have seriously slowed down their progress in localization. For instance, India's high tariffs have increased production costs. More importantly, a series of challenges, such as a lack of skilled workers and weak industrial infrastructure, constrain the development of India's manufacturing sector.

So, Chinese enterprises may face a dilemma. Intense market competition forces them to localize their business in India to win market share, but it's difficult to promote localization due to the constraints of development.

What India should do now is address the fundamental and structural problems in its economic development and lay a solid foundation for sound and fast manufacturing growth. At the very least, India should provide a fair, non-discriminatory business environment for foreign companies to invest and operate in the country. This will help Chinese companies solve the difficulties encountered in the process of localization and enhance their confidence in the Indian economy. 

However, according to Indian media outlets, the country has taken an unjust stance in ignoring Chinese companies' economic interests: The government has relied on administrative measures to force companies to localize their operations in India. 

Although protectionist measures may bring some benefits in the short term, they cannot fundamentally solve problems and promote localization. Protectionist measures will have serious negative impacts on the economy in the long run.

China has stepped up punishment on capital market crimes including financial fraud, fraudulent IPOs and market manipulation. Financial practices must comply with laws and regulations, executives must be severely punished and underwriters must be held liable for negligence, Zhang Jun, president of the Supreme People's Court, said on Friday while delivering a report to the second session of the 14th National People's Congress (NPC).

For example, a company listed in National Equities Exchange and Quotations falsely increased revenue by 300 million yuan ($41.74 million) in its stock issuance, under-disclosed bank borrowings by 1 billion yuan, and fraudulently issued additional shares. The court ordered it to compensate investors 49 million yuan, and the company's executives bear up to 100 percent joint and several liability for negligence. Also, the intermediary agency responsible for verification shall bear 20 percent joint liability, Zhang said.

In 2023, the people's courts concluded 3.032 million financial cases, a year-on-year increase of 8 percent, according to Zhang. 

Also on Friday, Supreme People's Procuratorate (SPP) Procurator-general Ying Yong said that the SPP has strictly cracked down on financial crimes, and prevented and resolved financial risks in the past year. 

There were 27,000 people prosecuted for financial fraud and crimes that disrupted financial management order, including 18,000 for fund-raising fraud and illegal absorption of public deposits. 

We prosecuted 346 people for securities crimes such as fraudulent issuance, insider trading, and market manipulation, and jointly safeguarded the security of the capital market and the legitimate rights and interests of small and medium investors, Ying said.

Together with the State Administration of Foreign Exchange, we release typical cases to severely crack down on foreign exchange-related crimes. The SPP strengthened anti-money laundering cooperation with other departments and prosecuted 2,971 people for money laundering crimes, a year-on-year increase of 14.9 percent, Ying said.

The China Securities Regulatory Commission (CSRC) will strive to improve the quality of listed firms through supervision efforts in key areas such as IPOs and delisting. Furthermore, it will enhance regular supervision efforts on firms after they go public by cracking down on fraud and other violations in accordance with the law, CSRC Chairman Wu Qing told a press conference held Wednesday on the sidelines of the ongoing session of the national legislature.

China's monetary policymakers have a rich toolbox and ample options, and there is still further room to slash the reserve requirement ratio (RRR), Pan Gongsheng, governor of the People's Bank of China (PBC), the central bank, said on Wednesday.

Speaking at a press conference during the ongoing second session of the 14th National People's Congress, Pan said that the average RRR of China's banking industry, which is the proportion of money that lenders must hold as reserves, remains at 7 percent currently and there's room to cut it further.

Pan said that the PBC will pay more attention to striking a balance between the short term and the long term, between seeking steady growth and preventing risks, and between internal equilibrium and external equilibrium in its monetary policy regulation.

The PBC will also strengthen counter-cyclical and cross-cyclical adjustments while focusing on boosting market confidence and stabilizing expectations and prices to create a favorable monetary and financial environment for the economy's operations and development.

The considerations outlined by Pan underscore the resilience of China's monetary policy with further room to respond to unexpected situations, Sun Lijian, director of the Financial Research Center at Fudan University in Shanghai, told the Global Times on Wednesday.

China's high-quality deployment targeting investment has created various channels for implementing the country's monetary policy and broad scope for fiscal policy to take effect, Sun said. He added that the utilization of monetary policy for supporting fiscal policy and the real economy through the financial sector will be a major focal point for boosting domestic demand.

Sun noted that implementing a flexible and appropriate monetary policy to ensure adequate liquidity will help tackle external challenges amid the current complex global environment, which may lead to unstable investment flows, stressing the significance of adapting structural monetary policy instruments for uncertainties.

Pan said that the Chinese central bank will utilize comprehensive monetary policy tools to achieve targets, such as maintaining a reasonable level of liquidity.

In 2023, the PBC lowered the RRR twice by 0.25 percentage points each time. It cut the RRR by 0.5 percentage points in February this year, which provided 1 trillion yuan ($138.9 billion) of long-term liquidity to the market, Pan said.

In addition to maintaining reasonable growth, Pan said that the PBC will continuously lower the cost of social financing in a steady manner. The central bank will approach maintaining price stability and promoting a moderate price rebound as significant considerations for its future monetary policy, while considering the soundness of banks' balance sheets, Pan noted.

Pan said that the central bank cut interest rates twice in 2023 and guided major banks to lower deposit rates while making a cut of 0.25 percentage points for the five-year loan prime rate (LPR) in February, as these measures will firmly contribute to lower financing costs and supporting investment and consumption.

The RRR and LPR cuts indicate a significant increase in monetary policy support for the economy, which helps accelerate the recovery and boost market confidence in the improvement of economic growth and corporate profits, Chang Haizhong, executive director of corporates at Fitch Bohua, said in statement sent to the Global Times on Wednesday.

Chang expects that the LPR will be lowered twice more this year by a total of 20 basis points, and the RRR for financial institutions will continue to decrease, too.

China should implement a prudent monetary policy in a flexible, appropriate, targeted and effective way, and should improve the monetary policy transmission mechanism to prevent funds from sitting idle or simply circulating within the financial sector, according to China's 2024 Government Work Report, which was delivered on Tuesday.

The central bank will further increase the efficiency of monetary policy in promoting economic restructuring and maintaining the exchange rate at a reasonable and stable equilibrium level, Pan said.

Pan said the main participants in the foreign exchange market have become more mature with a growing number of business entities using exchange rate hedging tools and the yuan for cross-border settlement, as the fundamentals of China's economy continue to rebound and improve.

As of February, the yuan's share in cross-border payments for merchandise trade in China reached 30 percent, according to Pan.

The 14th National Committee of the Chinese People's Political Consultative Conference (CPPCC), China's top political advisory body, kicked off its second session on Monday, marking the start of the annual two sessions. The second session of the 14th National People's Congress (NPC), the country's top legislature, is set to open on Tuesday.

This year's political gatherings carry extra weight for the Chinese economy, as 2024 will be a crucial year for the realization of the goals and tasks of the 14th Five-Year Plan (2021-25), and the new government is set to submit its Government Work Report to the NPC annual session for deliberation for the first time.

The session usually reviews past achievements and sets development targets for the current year and beyond.

At a time when mainstream Western media outlets are flooded with reports of China grappling with various difficulties - deflation, a property crisis, mounting debt burdens and a foreign capital exodus - the two sessions will serve as a crucial window for the world to observe the country's economic development and understand its policy direction for the year ahead, which Western media outlets said investors are watching closely for signals of a "bazooka-like stimulus." 

It's not unusual to see Western media outlets run bearish reports badmouthing the Chinese economy around the major political event every year. For instance, a report published by the Financial Times on February 27, 2023, was headlined "The implications of China's mid-income trap," while CNN ran an article entitled "China's economy had a surprisingly good start to the year, but it may not last" in March 2022.

Yet, China still accomplished its 2023 GDP growth target despite downward pressure and challenges, and the underlying trends of a rebound in the economy and long-term growth remain unchanged. Such economic fundamentals further prove that the ill-intentioned "China collapse" theory cannot withstand the test of time.

Why have Western predictions about a hard landing for the Chinese economy never come true? The key lies in the inability to understand that China's economic development has its own rhythm and policy direction, which will not be influenced by Western hype. The reason why the two sessions are of great importance to China's economy is not only because of the GDP target issued during the meetings, but also because of the policy direction set for achieving stable economic development in the year ahead.

There is no denying that China's GDP target has been the focus of world attention, which is not surprising given its huge economic size and important implications for the global economy. The Chinese government has always stressed the importance of the quality of economic development, rather than just the growth rate, but GDP, as a major measure of a country's economic strength, is still one of the most important economic metrics in China. 

It is true that China's economic growth has slowed in recent years amid unprecedented and complicated domestic and external market challenges. This is mainly because the economy is undergoing a period of adjustment and transformation. Despite the difficulties and downward pressure, China is still on a solid footing and its GDP growth rate remains relatively fast among the world's major economies. 

If anything, China's consistent economic performance over the years is the best proof that it has the ability to transform its economy while maintaining growth momentum.

During China's two sessions, much attention is often paid to the country's GDP growth target. However, it is crucial to look beyond mere numbers and understand the implications of new policies and measures to be implemented by the Chinese government to address economic challenges. Because the policy direction not only promises positive influence on China's economic prospects, but also presents opportunities in the country's future development.

The Chinese economy is resilient, has huge potential and vitality and its growth momentum will continue to strengthen and lead to a bright future, according to a spokesperson for the Second Session of the 14th National Committee of the Chinese People's Political Consultative Conference (CPPCC).

Economic issues have been a focal point for political advisors ahead of the gathering, and it is the opinion of all political advisors that in 2023 the Chinese economy withstood the external pressure and overcome internal difficulties, and the economy has been on a general recovery track, according to Liu Jieyi, spokesperson for the second session of the 14th CPPCC National Committee.

There is a good foundation and favorable conditions for promoting high-quality development and the long-term positive economic trend will continue to be consolidated and strengthened, Liu said, responding to a question about the current status of the Chinese economy.

Solid progress has been made in achieving major social and economic growth targets, high-quality development and Chinese way of modernization in 2023, Liu said.

The CPPCC held quarterly seminars on the country's macroeconomic situation and in-depth consultations on the stable operation of the overall economy, with topics ranging from fiscal, monetary, employment and headline economic policies, and provide suggestions and strategies to stabilize market expectations and boost investor confidence, according to Liu.

Biweekly consultations meetings were held on fostering the high-quality development across the financial sector and promote the stable and sound development of the property sector and field trips were made to promote the high-quality development of the private economy, strengthen the digital transformation of small and medium-sized enterprises, and improve the resilience and safety level of the industrial and supply chains.

The CPPCC also arranged study trips to small and medium-sized banks to help tackle the risks of smaller financial institutions and provide advice on implementing the task mapped by during the Central Economic Work Conference held in December.

Its suggestions on fostering new-quality productive forces were highly valued and in many cases adopted by relevant government departments, Liu said.

The second session of the 14th National Committee of the CPPCC will begin on March 4.

China's economy grew 5.2 percent year-on-year in 2023, finishing above last year's official GDP target of around 5 percent, and underscoring the resilience and potential of the Chinese economy in the post-COVID-19 era.

Escalating US trade protectionism, and its behavior of politicizing economic issues and erecting more trade barriers to affect fair competition, will only harm the development of its own auto industry in the long run, He Yadong, a spokesperson of China's Ministry of Commerce (MOFCOM), said on Thursday.

Chinese cars are popular in the global market because of their innovative features and high quality rather than alleged low-price dumping, He said, responding to a question over media reports saying that the Alliance for American Manufacturing had asked the US government to block the import of low-cost Chinese automobiles and auto parts from Mexico.

In addition, a Reuters report said on Wednesday that Republican US Senator Josh Hawley has introduced legislation to hike tariffs on Chinese vehicle imports amid so-called concerns about the potential competitive impact on American car companies.

In recent years, the US side has erected barriers to thwart Chinese car imports, like levying additional tariffs, excluding Chinese car brands from US government procurement and implementing discriminatory subsidy policies, He said.

While the US erects barriers to hinder Chinese carmakers, China is always open to carmakers from across the world, He said. 

US carmakers have fully enjoyed the dividends of China's huge market, with the sales volume of American brands far outpacing Chinese brands in the US. Protectionism by the US will only hinder its own auto industry's development in the long run, He said.

The MOFCOM spokesperson urged the US to respect the rules of the market economy and the principle of fair competition while correcting its non-market practices in order to build a fair environment for the long-term development of the auto industry.

The EU has also stepped up trade protectionism against Chinese automobiles, and recently, the EU's antitrust regulator launched an investigation into Chinese trainmaker CRRC Qingdao Sifang Locomotive, a subsidiary of CRRC Corp, the world's biggest producer of rolling stock.

Cui Dongshu, secretary-general of the China Passenger Car Association, told the Global Times that the protectionist moves of the US and EU violate the WTO principle of fairness, and robust exports of Chinese new-energy vehicles (NEVs) reflect the strong international competitiveness of China's industry chains rather than so-called subsidies.

In China, the subsidy granted to NEVs was completely phased out as of the end of 2022. In order to maintain fair competition, provinces across China were required to stop subsidies for NEVs starting from 2018, and subsequently, national subsidies were phased out in an orderly fashion, Cui said.

Cui is positive about the development of China's NEV sector on the back of its strong innovation capability, complete manufacturing system and strong supply chains.

China's vehicle exports surged 57.9 percent year-on-year to a record of 4.91 million in 2023 as the country's automakers expanded their presence overseas, according to data from the China Association of Automobile Manufacturers.

China-US economic and trade cooperation is a stabilizing force in bilateral relations. The Chinese side is willing to join hands with the US to implement the important consensus reached at the San Francisco meeting between the two heads of state to jointly promote the steady and healthy development of China-US economic and trade relations, Chinese Vice Commerce Minister Wang Shouwen said when meeting with a US Chamber of Commerce delegation led by the chamber's President and CEO Suzanne Clark in Beijing on Tuesday.

China will unswervingly promote high-level opening-up and it is hoped that member companies of the US Chamber of Commerce will continue to be deeply rooted in the Chinese market and achieve win-win development, Wang said.

German auto giant Volkswagen Group has signed an agreement with Xpeng, a Chinese electric vehicle (EV) maker to co-develop new EV models tailored for Chinese market, where broad consumers are embracing clean, environment-friendly cars.

The two parties agreed to commence strategic tech collaboration, bundling their respective strengths to explore the dynamic Chinese market, and will co-develop two intelligent internet-connected vehicles tailored for Chinese consumers, according to a statement sent from Volkswagen Group to the Global Times on Thursday. 

The agreement includes the joint purchase of vehicle equipment and auto parts, in addition to the use of innovative technologies in auto design and engineering.

The first two EV models are scheduled to hit the road in 2026, with one planned to be a sport utility vehicle, Volkswagen said. 

Ralf Brandstätter, a board member of Volkswagen AG for China region, said China is the world's largest and fastest-growing EV market, noting that the partnership with XPeng increases economic competitiveness of vehicle production in a price sensitive market environment.

He Xiaopeng, chairman and CEO of XPeng, said the company will provide Chinese consumers with the best EV products combining Volkswagen's vehicle making and engineering capability and XPeng's smart EV technology. 

In December 2023, Volkswagen completed the acquisition of shares amounting to 4.99 per cent of the total issued and outstanding share capital in XPeng, following the announcement of the partnership in July 2023.

Another Chinese EV maker Nio in December last year signed a pact for an investment of $2.2 billion with Abu Dhabi-based CYVN Holding. And, Dutch automaker Stellantis NV also announced in October 2023 to invest 1.5 billion euros to acquire approximately 20 percent of China's EV start-up Leapmotor, underlining the advantage and competitiveness of China's EV manufacturing.

At the end of 2023, China’s population was 1.4097 billion, a decrease of 2.08 million from the previous year, with urban permanent residents totaling 932.67 million. The annual new births reached 9.02 million, while deaths hit 11.1 million, resulting in a natural growth rate of -1.48‰: official statistics