At the beginning of the reform and opening-up policy in 1978, China was a relatively closed economy with a per capita gross domestic product (GDP) of only $156. By 2024, China has become an open economy with a per capita GDP of 13400 US dollars. Currently, China is the world's largest exporter, second largest importer, and third largest outward investor. The trend of changes in the global proportion of China's manufacturing GDP is remarkable. According to data from the World Bank, the global share of manufacturing GDP in middle-income economies remained relatively stable from 1997 to 2002, but has experienced rapid growth since 2002. This phenomenon is mainly due to the China effect. The global proportion of China's manufacturing GDP was about 8% in 2004, and has reached around 30% by 2021. The role of the Chinese economy in the world has changed, which can be analyzed from multiple perspectives. Perspective 1: Important Changes in China's Foreign Trade In 1978, China's total exports and imports were both around 10 billion US dollars, accounting for about 1% of global trade. By 2023, China's exports have reached $3.56 trillion and imports have reached $2.71 trillion, accounting for 15% and 11% of the global total, respectively. In 2024, China achieved a trade surplus of 800 billion US dollars. In economic research, there are many methods for classifying trade products, and one commonly used classification method divides goods trade products into four categories: raw materials, intermediate goods, consumer goods, and capital goods. In these categories of goods, the production of raw materials is highly dependent on the country's resource endowment; Consumer goods are usually labor-intensive products; Intermediate goods and capital goods belong to capital intensive products, with capital goods being more capital intensive than intermediate goods. Observing the evolution of China's import and export patterns, in 1992, the highest proportion of imports was intermediate goods and capital goods, while the highest proportion of exports was consumer goods. In 1992, China's role in the global economic landscape was to import a large amount of capital goods and intermediate goods from high-income economies, and export consumer goods to high-income economies, belonging to the "two ends out" processing trade model, and the import and export were highly dependent on high-income economies. With the continuous development of the Chinese economy, the proportion of capital goods in imported goods maintained a period of growth, but began to significantly decline in 2004, reaching a peak of 40% and currently dropping to 30%. At the same time, the proportion of imported intermediate goods is also showing a downward trend, while the proportion of imported consumer goods is slowly increasing. The proportion of imported raw materials has rapidly increased and has become the product category with the highest proportion of imports, including energy commodities such as oil and natural gas. In recent years, due to the rapid development of China's electric vehicle industry, the demand for imported raw materials such as lithium and nickel has also increased. In terms of exports, China was mainly dominated by labor-intensive consumer goods in the early days, and there was a saying that '400 million shirts for a Boeing plane'. In the past 30 years, the proportion of exports of consumer goods has rapidly declined, while the proportion of exports of capital intensive products has significantly increased. To sum up, in the early 1990s, China's per capita income level was low, so it had comparative advantages in labor-intensive products, forming a "two ends out" model dominated by processing trade. In the following 30 years, with the growth of the economy and the increase of per capita income, China underwent economic structural transformation, and the proportion of capital goods exports continued to rise. By 2004, it had accounted for 41% of the total exports, and has since become the largest product export category in China, covering various products such as machinery and equipment. At the same time, the proportion of exports of raw materials, intermediate goods, and consumer goods continues to decline. In terms of imports, the main changes are manifested as a sustained and significant increase in the proportion of raw material imports, an initial increase followed by a decrease in capital goods imports, a sustained decrease in the proportion of intermediate goods imports, and an overall slight upward trend in consumer goods imports. The changes in import and export data reflect the changes in China's comparative advantage in the global trading system. Over the past 20 years, China's trade relations with developing countries around the world have continued to deepen. Between 2000 and 2023, the proportion of low - and middle-income economies in China's total capital goods exports surged from 16.5% to 41.5%, and continues to rise. This change indicates that developing countries around the world have gradually entered the process of industrialization, and China has provided them with a large amount of intermediate and capital goods. At the same time, countries in the global South are gradually replacing high-income economies as the main suppliers of raw materials to China. China and developing countries around the world have formed complementary relationships in trade. Perspective 2: The Transformation of China's Outward Investment Since 2000, China's direct outward investment has experienced significant growth. In the early 21st century, the scale of China's direct outward investment was relatively small, only a few billion US dollars. By 2024, it will reach 170 billion US dollars, which is higher than the total amount of foreign investment in China. As of the end of 2023, China's cumulative outward investment is 2.96 trillion US dollars, second only to the United States and the Netherlands. China's outward foreign direct investment is mainly divided into two categories: outward investment and mergers and acquisitions, and greenfield investment (referring to enterprises established by multinational corporations and other investment entities in accordance with the laws of the host country where the ownership of assets belongs to foreign investors, which is the traditional way of international direct investment). In the early stages, outward investment and mergers and acquisitions accounted for a significant proportion. From 2004 to 2011, outbound investment and mergers and acquisitions accounted for 42% of the total outbound investment. Since 2004, China has begun to demonstrate comparative advantages in the production of capital intensive products, and its global market share has gradually increased. Due to the high technological complexity, strong knowledge and skill requirements, and high market access barriers of capital intensive products, Chinese companies can quickly acquire relatively advanced manufacturing technology, brand influence, and mature international market channels through mergers and acquisitions of overseas enterprises, achieving transformation, upgrading, and international expansion. This is one of the optimal strategies for Chinese enterprises to achieve technological breakthroughs and market expansion. Subsequently, the proportion of mergers and acquisitions investment continued to decline, while the proportion of greenfield investment gradually increased. Since the joint construction of the "the Belt and Road" initiative was proposed in 2013, the proportion of Chinese manufacturing outbound investment has increased significantly. Based on data statistics of investments in the first destination country, the proportion of manufacturing investment in China's outward foreign direct investment has jumped from 7.8% in 2014 to 13.7% in 2015, and remained at an average level of 15.5% from 2015 to 2023, ranking among the top three in China's outward investment industry for a long time. This change is mainly influenced by rising domestic labor costs, international trade conflicts, and geopolitical conflicts. Perspective 3: General Laws of Global Industrial Transfer Global industrial transfer follows certain universal laws. Due to the significant economies of scale in manufacturing production, enterprises tend to concentrate their production activities in central areas or cities to reduce agglomeration costs. This phenomenon is particularly evident in China, where many talents choose to go to first tier cities such as Beijing, Shanghai, and Guangzhou due to the economies of scale that these big cities possess. With the continuous growth of the economy and further concentration of industries, the costs of labor, land, transportation, etc. are gradually rising, leading to the spillover of industries to surrounding areas. For example, Shenzhen's development first benefited from the spillover effects of Hong Kong. In history, the achievements of the British Industrial Revolution first spread to the European continent, then to the United States, and finally to Japan, the "Four Little Dragons" of East Asia, and China. Currently, China is in the spillover stage of industrial transfer. Unlike before, China's industrial transfer has shown a trend of multi-directional development, with investment activities of Chinese enterprises visible in Southeast Asia, Central and South America, and North America. Outlook: The significance and challenges of China's economic cooperation with the global South. The impact of China's economic growth on the global economic landscape covers the fields of international trade and outward investment. This impact is closely related to the "the Belt and Road" initiative, which is of great significance to low - and middle-income economies in the world, especially Africa and Southeast Asia. In these regions, many economies have a per capita GDP of only around $1000, but low labor costs have not been effectively converted into industrial production capacity. The key factors lie in the extremely backward infrastructure and severe lack of industrial production capacity. In the process of pursuing industrialization, developing countries around the world, like China, infrastructure construction is an indispensable part. From this perspective, the initiative of the Chinese government to jointly build the "the Belt and Road" and its advocacy for infrastructure cooperation are of vital significance to the economic growth and industrialization process of developing countries and countries in the South. The World Bank made an in-depth analysis of the "the Belt and Road" in its report released in 2019. The results show that the transportation infrastructure investment alone has shortened the transportation time by 8.5%, increased the foreign direct investment of relevant economies by 7.6%, and helped 7.6 million people around the world get rid of extreme poverty and 32 million people get rid of moderate poverty. These data fully illustrate the role and influence of the "the Belt and Road" in the global economy. (Xinhua News Agency) Author: Wang Min (Associate Professor of Economics, National Development Institute, Peking University)