The secret behind China's foreign investment appeal is its large market that has expanded steadily. The Chinese government needs to further boost domestic demand and improve high-quality supplies through innovation.

In order to build a global trade hub in China and make it a global market with vitality and favorable business environment, efforts in the following fields are needed.

Domestic demand needs to be expanded to drive economic growth. Improved living conditions of the Chinese people have driven consumption upgrading. Besides the traditional consumption for basic necessities, new and advanced consumption can become new driving forces for expanding consumption. Public consumption also sees room for growth along with China's economic development. Efforts are needed to improve the quality of supplies for green, healthy and safe consumption, and encourage the development of new consumption models.

China's total retail sales of consumer goods reached nearly 40 trillion yuan ($6.18 trillion) in 2020. Its total social logistics exceeded 300 trillion yuan, and its global trade totaled 32.16 trillion yuan. Sales of the property market stood at 17.36 trillion yuan. While the total market capitalization of China's stock market has reached 80 trillion yuan. The emerging trade of data will also generate a greater market.

The government also needs to integrate resources to develop a global trade hub. China has become the world's largest trading nation in goods and is the largest trading partner of more than 120 countries. It has hosted the China Import and Export Fair (Canton Fair), the China International Import Expo and the China International Fair for Trade in Services.

With nearly 5,000 professional wholesale markets of commodities such as those in Yiwu, Zhejiang province, China has the potential to become a global purchase trade hub. Efforts are needed to make China a trade power by 2035 and turn it into a global trade hub of imports, exports and re-exports with strong modern logistics by 2050. China will see the growth of its imports exceed $10 trillion in the next five years, and it should aim to become a global trade hub in the next 15 years.

Efforts are also needed to build China into one of the world's major financial hubs. With the internationalization and improving credibility of the renminbi, its share in global reserve currency holdings and international trade and settlement has increased greatly, which will make it one of the world's major currencies. The share of the renminbi in international trade and settlement will exceed 20 percent by 2035 and reach 30 percent by 2050. The number of offshore renminbi trade centers will increase from 13 at present to 50. The proportion of energy futures of the Shanghai International Energy Exchange will increase from 12 percent currently to about 20 percent in 2025, reaching about 30 percent in 2035 and 40 to 50 percent in 2050.

According to international organizations, Hong Kong has the most favorable business environment in China. It ranks among the world's top five for its business environment. As the plan of building the Guangdong-Hong Kong-Macao Greater Bay Area has been initiated, Hong Kong will be able to play its role in the region with the introduction of the national security law that can ensure stability. The Greater Bay Area can provide references for other regions on improving business environment.

The number of market entities in China has reached 140 million. Data from the China Academy of Information and Communications Technology showed that the scale of China's digital economy totaled 39.2 trillion yuan in 2020, accounting for 38.6 percent of its GDP. The growth rate of the digital economy reached more than three times of the GDP growth rate, making the sector a key driving force for economic growth. According to the China Internet Network Information Center, the number of China's online medical service users reached 215 million in 2020, with a penetration rate of 21.7 percent. Last year, the penetration rate of mobile payment reached 94.7 percent. The transaction value of mobile payment totaled 266.2 trillion yuan, up 27 times from five years ago.

The government also needs to take the domestic market as the mainstay while driving domestic and foreign markets to complement each other. Domestically, efforts are needed to integrate production, distribution, circulation and consumption, and curb monopoly and local protectionism. To boost the two-way circulation, the authorities are supposed to build a smooth, efficient and low-cost modern logistics system, and build more Chinese cities into international consumption and tourism and leisure centers.

The author is chief economist of the China Center for International Economic Exchanges. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn