Wang Xiaohong: High-level Openness is an Inevitable Requirement for High-quality Development

By—Wang Xiaohong 

The 20th Party Congress report proposed that "the next five years are a crucial period for the initial stage of comprehensively building a modern socialist country." It includes the goal of "taking new steps in reform and opening up, comprehensively advancing the modernization of the national governance system and governance capacity, further perfecting the socialist market economy system, and forming a new system of a more open economy at a higher level" as a major objective for the coming period. The Central Economic Work Conference emphasized the importance of "persisting in advancing high-level opening up, steadily expanding institutional opening up in terms of rules, regulations, management, standards, etc." In this context, understanding the significance of further advancing high-level opening up for economic work is crucial.

In recent years, the world has undergone unprecedented changes in a century, the profound impact of the century pandemic is felt, anti-globalization sentiments are rising, unilateralism and protectionism are evident, global economic recovery is weak, and global issues are intensifying. The global landscape in economics, technology, culture, security, politics, and other aspects is undergoing profound and complex changes. The foundation of China's economic recovery is not yet solid, facing challenges such as demand contraction, supply shocks, and weakening expectations. The external environment's instability poses risks and impacts on China's economy. These challenges require a better balance between the domestic and international situations, the construction of a new system for a more open economy at a higher level, and the implementation of a broader, more extensive, and deeper opening up to promote qualitative and effective improvement as well as reasonable growth in quantity. This is not only a practical necessity to cope with the profound and complex changes in the international environment but also an inherent requirement to drive high-quality development in China's economy.

High-level opening up provides institutional supply for building a high-standard market system. Constructing a high-standard market system is an important aspect of accelerating the improvement of the socialist market economy system. It holds significant implications for promoting a new development pattern where the domestic circulation is the mainstay, and the domestic and international circulations mutually reinforce each other. Advancing high-level opening up, benchmarking high-standard international economic and trade rules, promoting deep-level reforms, steadily expanding institutional opening up in terms of rules, regulations, management, and standards, contributes to building a more mature and well-established high-level socialist market economy system. It further stimulates the vitality of various market entities.

High-level opening up provides assistance in continuously optimizing the allocation of domestic and international resource factors. High-level opening up effectively enhances the quality and level of trade and investment cooperation, attracting and utilizing foreign investment more vigorously. It is conducive to actively promoting participation in high-standard economic and trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA). This involves voluntarily aligning with relevant rules, regulations, management, and standards, and deepening reforms in related domestic areas.

High-level opening up provides stable and secure supply chain guarantees for constructing a new development pattern. China's economy is deeply integrated into the global industrial chain, supply chain, and innovation chain. Constructing a new development pattern and focusing on enhancing the resilience and security levels of industrial chains and supply chains require progress under open conditions. On the one hand, it is essential to fully leverage the advantages of the domestic market and industry chains, forming a large-scale economic development model with internal circulation as the main focus, enhancing the internal dynamics and reliability of the domestic circulation. On the other hand, achieving high-level opening up creates a smooth external circulation system, enhancing the quality and level of international circulation. Only by removing barriers to both internal and external circulation can the various links of production, distribution, circulation, and consumption be smooth, extending the global industrial chain, stabilizing the supply chain, and strengthening the innovation chain, thereby elevating China's role in the global value chain. (The author is the Deputy Head of the Department of Research Management and Information Services, China Center for International Economic Exchanges)

(The original article was published on Economic Daily on 11^th January, 2023)