Promoting high-standard opening up is integral to China’s high-quality development. The Resolution on Further Deepening Reform Comprehensively to Advance Chinese Modernization, adopted at the Third Plenary Session of the 20th CPC Central Committee in July 2024, made special arrangements for refining institutions and mechanisms for high-standard opening up. As it stresses, “leveraging the strengths of China’s enormous market, we will enhance our capacity for opening up while expanding international cooperation and develop new institutions for a higher-standard open economy.”

Since its accession to the World Trade Organization, China has rapidly integrated into global labor division and trade networks. Capitalizing on its institutional, cost, and demographic advantages, it has transitioned from a peripheral player to a core participant in the global network, building the world’s most comprehensive industrial system. The product space network, a natural outcome of production and trade globalization, is a key driver of China’s sustained foreign trade growth.

In the context of rapidly advancing information and communication technology, the globalization of production and trade has facilitated cross-border flows of factors, capital, goods, and services. Deepening trade and cooperation among various actors has interconnected countries into a multi-subject, multi-level, and complex international labor division and trade network. This intricate yet orderly network, shaped by the convergence of production and trade globalization with technological advancements, is a defining feature of global labor division and trade. The global product space network encompasses both the product trade network, formed by trade links among countries and regions, and the product production network, driven by the division of production labor behind trade.

The combination of trade and production information in the product space network will enhance the degree to which China is embedded in the global value chain. Therefore, optimizing the product space network holds the key to refining institutions and mechanisms for high-standard opening up.

At present, the rapid growth of the digital economy has accelerated information generation and transmission, and the product space network serves as a vital source of information on production technologies, factor supplies, and market demands, particularly for small and medium-sized enterprises. Strengthening market information exchange mechanisms and ensuring smooth information exchange channels are essential for the product space network to function as a market information pool.

The product space network can also provide inspiration for addressing technological containment by other countries. First, the product production network facilitates the identification of information flows—including directions and contexts—related to technological bottlenecks, uncovering alternative routes of information exchange within this network. By precisely targeting and supporting these routes, China can mitigate the immediate impact of technological containment, overcome obstacles, or overtake via backup routes. Second, the product trade network helps identify supply disruptions and shifts in global demand caused by technological containment, enabling enterprises to adjust their global market strategies promptly and minimize economic impacts.

Yu Zhuangxiong is a professor from the Institute of Industrial Economics at Ji’nan University in Guangdong Province. Cheng Jiajia is a research fellow from the Institute of International Trade and Economics at Guangdong University of Foreign Studies.