CHINA: TRENDS OF INTERNATIONAL INTERACTION AMID CONTEMPORARY CHALLENGES

This study aims to identify the main contemporary challenges ahead of the Chinese economy, as well as to assess to what extent China's policy of interaction with foreign partners contributes to overcoming the existing threats. The author concludes that the strategy of multilateral economic alliances and large-scale investment expansion is formed under the influence of three main internal challenges. Firstly, amid lowering foreign demand and shrinking pace of global trade growth there is a need to move towards a consumption-led growth model. Secondly, the threat of growing social tension within the country is growing because of gradual transformation of labor-intensive industries into capital-intensive one. Thirdly, the problems of ensuring food security become more acute. The opportunities to achieve strategic reorientation of the Chinese economy, to raise incomes, to stimulate domestic demand and to overcome the threat of potential growth of social tension solely from internal resources are very limited. Consequently, the importance of the "external" component of the realization of long-term national interests is growing rapidly. Under the influence of new challenges, the accents are gradually shifting from trade expansion to expanding the investment presence abroad. At the same time, the directions of Chinese foreign investments and investors' motivation transform. They are gradually moving from investing as minority shareholders in the real sector to increasing their investments, shares in service enterprises, large strategic infrastructure facilities, high-tech companies, and projects. When making investment decisions, Chinese companies are driven by the motive to get access to new technologies and strategic facilities, to expand the network of business contacts and to improve their business reputation. The approach to economic integration is also changing. On the one hand, China initiates and promotes the concept of a broader framework for integration and cooperation. On the other hand, it aims to enhance the "quality" of integration agreements (both bilateral and multilateral), i.e. negotiate relatively more intensive abolition of non-tariff restrictions in trade in goods, active liberalization of trade in services, and the main, intensive elimination of restrictions on investment flows.