“The nation is right now quickening the steps it has taken in making outbound investments,” Premier Wen said at the 2011 session of the NPC. “The government will guide companies in making expedient investments, largely through mergers and acquisitions, in energy, raw materials, agriculture, service and infrastructure industries.”

This year marked the first occasion on which the Premier elaborated on industries that are to be targets for Chinese outbound direct investment. Global investments by Chinese businesses not only create new growth opportunities for their shareholders and China but also create jobs and revenues in host countries.

“Expanding domestic demand and opening-up are closely connected and part of an integral whole,” said Zhang Xiaoji, director of the Foreign Economy Research Department of the Development Research Center of the State Council. “The strategy of expanding domestic consumption and tapping the domestic market doesn’t negate China’s opening-up. On the contrary, the new policy heralds a new era in opening-up. In the last 30 years, China has cultivated a massive domestic market with huge potential. This market appeals to foreign capital, which can help alleviate China’s dependence on exports for growth. Expansion of domestic demand is also an effective way to move domestic production away from low value-added industries and enable China to begin exporting higher quality goods to the world,” Zhang said.

He stressed that expanding domestic demand is not a denial of expansion into overseas markets. On the contrary, China still needs to expand further into overseas markets, the key enabler of which is to cultivate a high quality global sales network. In recent years, more people have become aware of the fact that certain multinational corporations purchase Chinese products at low prices and sell them in overseas market at incredible mark-ups. Chinese manufacturers receive a comparative pittance. The reason behind this skewed distribution of profits actually lies in China’s lack of a global marketing network. Contemporary global production and business operations rely on such a sales network to enhance countries’ global presence. The key to expanding and upgrading China’s “opening-up” imperative lies in the establishment of an international production and operation network, which will ensure China’s advantages in manufacturing are transformed into China’s profits on exports,” Zhang said.

No country can prosper by shutting itself off from the world, but nor can a country make good by ignoring its own people. In short, expanding domestic demand will be crucial to ensuring prosperous economic lives for the Chinese people. In the years to come, “opening up while looking in” is set to be a new paradigm.