China Center for International Economic Exchanges

Chen Wenling: Reform and Opening up Reshape China and the World
Date:Dec 05,2018    Source:CCIEE

China’s 40 years of reform and opening up have not only reshaped itself, but also the world.

As far as China is concerned, the 40 years of reform and opening up have brought historical and fundamental changes to its national development. First of all, the reform and opening up have reshaped China’s economic system, enabling China to adopt the market economy system and help China to integrate itself with the world economy and market by following international rules and participating in international competition on an equal footing. The reshaping of China’s economic system has revived the enthusiasm of the Chinese people and enterprises, and social productivity has also been greatly improved. From 1978 to 2017, China’s GDP (Gross Domestic Product) increased from 216.5 billion to 12.24 trillion US dollars. In other words, China’s average annual GDP growth has reached 9.6% in the past 40 years, three times higher than the world average. In 1979, China’s total import and export volume was merely US$10.9 billion, but reached US$4.1 trillion in 2017, making it the world’s biggest trader.

With a total of 1.9 trillion US dollars in foreign investment, China has now become the second largest investor in the world. In 2016, China’s manufacturing output accounted for 25.5% of the global total. At the beginning of the reform and opening up, 75% of the products produced in China were agricultural products, but now more than 90% of them are industrial products. China has a complete industrial system and a rich commodity market. The Yiwu Small Commodity Market in Zhejiang alone has 1.8 million types of products, while in the early days of China’s reform and opening up, there were less than 150,000 types of products.

Reshaping China’s economic system

China’s innovation has made continuous improvement in the past. At present, it has mastered all the core technologies of high-speed railway and is capable of exporting the entire train to other countries. China’s nuclear power, smart grid, aerospace, marine technology, photovoltaic technology and infrastructure construction have become one of the leaders in the world. New business models such as mobile payment and cross-border e-commerce represented by Alibaba, Jingdong and Suning have emerged in China. China’s urbanization rate increased from less than 20% at the beginning of reform and opening up to the current 56%, with 800 million people living in the cities.

Second, reform and opening up have reshaped the way China connects itself with the rest of the world, and China has changed itself from a closed country to a semi-closed and now a fully-opened country. Shortly after the People’s Republic of China was founded, it was blocked by the Western world and chose the path of independence and self-reliance. Before the reform and opening up, all imports and exports of mainland China must be re-exported through Hong Kong, which was the only window and passage for China to connect itself with the international market. After the commencement of the reform and opening up, starting with the four special zones such as Shenzhen, Zhuhai and other coastal cities, China has gradually established 259 state-level economic development zones, 196 high-tech development zones, 19 state-level new districts, and 11 national-level free trade zone pilot areas.

On December 11, 2001, China joined the World Trade Organization (WTO) and hence began its institutional and all-around opening-up. From 2001 to 2006, Chinese governments at all levels abolished more than 200,000 local laws and regulations, reviewed more than 2,000 ministerial laws and regulations, and lowered the total tariff rate from 15.6% to 9.8%. In 2013, President Xi Jinping proposed the “Belt and Road Initiative”, which can be seen as a higher level of openness amid the new international situation. At the Boao Forum for Asia and the first International Import Expo this year, President Xi proposed an initiative for further opening up. The reform and opening up have brought advanced technologies, concepts and business models to China gradually, which have been made better by the hardworking and diligent Chinese people.

Third, the reform and opening up have improved the living standard of the Chinese people quickly and enhanced the government’s governance. The 40 years of reform and opening up has lifted more than 700 million people in China out of poverty, accounting for 76% of the global total. The average life expectancy of Chinese people has grown from 43 years in the early days to 76.7 years in 2017. China’s per capita GDP is now close to 10,000 US dollars, the per capita income level is 200 times more than 40 year ago, and the middle-income group has more than 300 million people. Furthermore, China’s governance has made constant improvement. After transforming itself from a planned economy to a market-based economic system, China has learned a great deal from developed countries such as the United States in various fields, such as how to govern the country under market economy conditions, how to play the role of market mechanisms and how to build a modern economic system. In just a few years, the global ranking of China’s business environment has risen from more than 90 places to 46th in 2012. In 2018, China has become the largest recipient of foreign direct investment.

China’s peaceful rise has become the anchor of world stability

China’s reform and opening up has far-reaching influence on the world. First, the reform and opening up have enabled China to rise peacefully and become the world’s largest stabilizing force, or the anchor of stability. As the largest developing country, China has made great changes in the North-South relation, which has adjusted the relations between the poor and rich countries rapidly, especially in improving the international status of developing countries and poor countries. In this sense, China has shaped the world.

Second, China’s steady and continuous economic growth has become a force driving the world economy. After the US triggered the international financial crisis in 2008, China has become the locomotive driving the world’s economic growth, contributing more than 30% of the world’s economic growth annually. China adheres to economic globalization, trade and investment facilitation and liberalization. The Belt and Road project connects different countries and regions and made a complete economic development map through interconnection, and injecting new momentum into the world economy.

Third, the reform and opening up have enriched global cultural values. In the 1950s, former Chinese Premier Zhou Enlai proposed five principles for the peaceful coexistence of international relations, which were recognized by the international community. Nowadays, we need more global cooperation than ever and China proposed the idea of ??building a community with a shared future for mankind, and the principles of cooperation, joint construction, and sharing. China’s concepts of development, justice, security, values have had a positive impact on many countries and can be seen as a useful exploration of human development. More and more countries and regions are paying attention to China’s theory, programs and actions.

China chooses openness, development, cooperation, and peace

Where will China go in the future? China’s future development concerns not only itself, but will also affect the rest of the world. First, opening up is the general direction of China. The establishment of the Hainan Free Trade Zone, the Guangdong-Hong Kong-Macau Greater Bay Area, the China-Singapore Free Trade Agreement (FTA), the organization of import Expo, the relaxation of market access and the creation of a modern business environment indicate that China is committed to be more open in the future.

Second, development is the direction of China’s future. China has entered a new stage of development and the main contradiction in society is the gap between people’s demand for a better life and unbalanced development. Letting 1.4 billion Chinese people live a better life is the goal of the Chinese government and the force driving China’s development.

Third, cooperation is the direction of China’s future. China is exploring ways to cooperate with all countries. For example, China has proposed to build a new type of relationship between China and the United States, put forward foreign policies based on the principle of “pro-honesty and grace”, the principle of companionship and non-alignment, and the Belt and Road initiative. China hopes to cooperate with developed countries, emerging economies and developing countries. This is also why China adheres to multilateralism, joint consultation and sharing in the new era.

Fourth, peace is the direction of China’s future. In the course of its rapid development in the past few decades, China did not provoke any country to launch a “color revolution”, did not support any country to carry out local wars, did not engage in any local or regional wars. As an ancient civilization with thousands of years of history, China’s always pursue great harmony and hopes that developed countries will be more developed, developing countries will develop faster and poor countries will get rid of poverty.

China’s main contradiction is not the one with the US

Of course, China itself faces many challenges and problems and its rapid development comes at a huge price. For example, the gap between the rich and the poor in China has widened. Nearly 300 million migrant workers working in cities and we need to help them with housing, medical care and their children’s education. Furthermore, it is very difficult for China to solve such problems as water pollution, soil pollution and air pollution. Many cities need to improve their underground projects in spite of fast urbanization process. The government’s ruling style needs to be improved and the market should play a better role in resource allocation.

The Chinese leaders are well aware of the challenges China faces and have always made it clear that China’s main contradiction is not because of the United States or other countries, but to find solutions for its own problems and improve its development.



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