Writing a New Chapter in Opening Up
The year 2018 marks the 40th anniversary of the launch of China’s reform and opening up drive. Our experience over the past 40 years has clearly proved that opening up provides an important impetus for economic and social development.
I. Historic achievements of 40 years of opening up
In 1978, the Third Plenary Session of the 11th CPC Central Committee made the historic decision to initiate a policy of reform and opening up, sparking a process of tremendous momentum toward opening up. Over the past 40 years, we have pursued development with doors wide open, and made an impressive transition from being a largely closed society to one that is open to the world in all respects. Since the 18th National Congress of the CPC in 2012, China has established a new development philosophy based on the principle of openness, launched the Belt and Road Initiative, and worked to build an open world economy and a community of shared future for humanity. As a result, the national cause of opening up has achieved extraordinary new successes.
1. Opening up has greatly unleashed productive forces.
Over the past 40 years, we have consistently promoted development through opening up, facilitated the free flow and efficient allocation of domestic and foreign production factors, and actively integrated into the global value chain, with the intent to achieve sustained and rapid economic development. From 1978 to 2017, China’s GDP grew at an average rate of 9.5% per year according to constant prices. In US dollars, foreign trade increased by 14.5% per year, utilized foreign investment totaled over 2 trillion dollars, and outward direct investment increased more than 40-fold. China has become the world’s largest trading nation, its levels of utilized foreign investment, outward investment, and foreign exchange reserves rank among the highest in the world, and its level of economic openness is continuously rising.
2. Opening up has helped improve the socialist market economy.
Over the past 40 years, we have consistently promoted reform through opening up, dismantled barriers created by vested interests, and overcome institutional shortcomings that hinder development. From reforming foreign trade management in terms of mandatory planning, to entering the WTO and aligning with international economic and trade rules, and further still to developing a unified and open market, we have continuously liberated the forces of various market entities. In recent years, China has expedited the establishment of new systems for an open economy, constructed pilot free trade zones, and implemented a management system based on pre-establishment national treatment and a negative list. The substantial number of institutional innovations has allowed us to better exert the decisive role of the market in resource allocation.
3. Opening up has raised living standards by a remarkable degree.
Through the opening up of the past 40 years, we have consistently improved people’s wellbeing, created more jobs, and enriched the choices for personal consumption, benefiting all Chinese people. By fully utilizing domestic and international markets and resources, we have lifted our people from lives of shortage and poverty to lives of abundance and modest prosperity. In recent years, China has increased efforts to open up to the outside world, lowered import tariffs on everyday consumer goods, developed cross-border e-commerce, promoted coordinated opening up on a regional level, worked to boost development and improve living standards in border regions, and created more opportunities for employment and income growth, all of which has helped better meet the people’s needs for a better life. Currently, foreign trade directly or indirectly creates jobs for around 180 million people, accounting for 23% of total employment in China.
4. Opening up has facilitated shared development of all countries.
Over the past 40 years, we have continuously pursued mutual benefit through opening up, deepened multilateral and bilateral economic and trade cooperation, and shared development opportunities with other countries. Opening up wider to the outside world has not only been advantageous for China’s own development, but has also contributed to world economic development. At present, China’s contribution rate to global economic growth surpasses 30%; we have become a major stabilizer and engine of the world economy. Between 2013 and 2017, the accumulated value of imported goods to China was approximately US$9 trillion. At the time of this article’s publication, China has signed 16 free trade agreements with 24 countries and regions. In 2017, the trade between China and its free trade partners (excluding Hong Kong, Macao, and Taiwan) accounted for 25.9% of its total trade volume. There have been notable achievements in economic and trade cooperation stemming from the Belt and Road Initiative, and the overall effects of China’s foreign aid provisions are on a consistently upward trajectory. In addition, China has offered further proposals and solutions on international platforms such as the WTO, the G20, APEC, and BRICS, contributing Chinese wisdom to global economic governance.