ACCORDING to the report delivered at the 19th National Congress of the Communist Party of China (CPC), to make new ground in pursuing opening-up on all fronts, China will not close its door to the world, and will only become more and more open. The report proudly unveils new aspects and areas to better promote openness and development in the new era. How to understand the significance of comprehensive opening-up? What does it mean for the world? Zhang Yuyan, director of the Institute of Global Economics and Politics at the Chinese Academy of Social Sciences, said a new, all-round opening-up in China would influence the world.
Breadth and Depth
About China’s openness, there are discussions in the world pertaining to doubts, worries, and expectations. The report gave a very clear explanation of China’s future openness, “covering new ground in pursuing opening-up on all fronts.” According to Zhang Yuyan, it is necessary to understand the meaning of “all-round opening-up” by breadth and depth.
“All-round opening-up” means widening both the scope and the expanse. First of all, it is meant to be total coverage at the geographical level, of global openness, which is not confined to developed countries or neighboring countries.
Delegates attend the opening ceremony of the Tbilisi Belt & Road Forum 2017 in Tbilist, Georgia, on November 28, 2017.
Secondly, we stick to the principle of simultaneously advancing multi-sector openness. In the past, China’s openness to the outside world mainly focused on the manufacturing industry. Along with the deepening of economic globalization, it shifted from physical trading based on manufacturing to trade in services, such as finance, insurance, education, and consultation. In November 2017, the total amount of commercial contracts and bilateral investment agreements signed between China and the United States amounted to over US $250 billion, including energy, manufacturing, agriculture, aviation, electricity, and automobiles.
Moreover, the scope of “all-round opening-up” is also reflected in spatial terms. China’s opening areas have progressively evolved from coastal and riparian areas to the hinterland and border regions. Currently, the construction of the Belt and Road Initiative is accelerating the opening-up of the central and western regions.
From the point of view of depth, “all-round opening-up” means innovation of models and deepening of the level of openness. As the country is opening wider, it is important to strengthen supervision to standardize behavior, create incentive mechanisms, reduce transaction costs, and diminish uncertainties.
What’s more, Zhang added, China’s active participating in global governance illustrates another important value of all-round opening-up. For a long time, developed countries, by virtue of their economic advantages, have guided and even dominated global governance and rule making. While profound changes have altered the overall strength of major players, China and other emerging countries now have the opportunity to give a fairer and more reasonable orientation to global governance. “Active participation in global governance means not only that we become supporters and advocators of the existing multilateral trading system, but also that we must make our own contribution to the improvement of international rules and global institutional system,” said Zhang Yuyan.
Deepening Reform and All-round Opening-up Are Inseparable
This year marks the 40th anniversary of the implementation of reform and opening-up policy in China. Reform and opening-up is the inevitable course to maintain and develop socialism with Chinese characteristics. Zhang Yuyan believes that pursuing openness on all fronts is closely linked to deepening of reform and construction of a modern economic system.
“To raise the level of an open economy, it is necessary to implement a more active opening-up strategy. Domestically, we should improve the related mechanism to promote both opening-up and reform, so as to achieve a synergistic progress. From a global perspective, we should participate in and lead international economic cooperation and competition, so facilitating the construction of a more just and reasonable international new order.
To deepen and broaden openness, the first task is to encourage domestically, the emergence of new forms and models of trade to make China a trader of quality; and externally, remove trade barriers, expand the scope and raise the level of trade. From Zhang’s point of view, international cooperation under the framework of the Belt and Road Initiative, a top-level strategy, is a salient example for China’s wider opening-up. In this regard, he suggested, three respects should be noted.
First of all, deepening and widening openness can be achieved by promoting the Belt and Road Initiative to reach sufficient flow of consumption and production factors, while emphasizing solutions to the problem of infrastructure interconnectivity.
Second, trade barriers must be removed in order to improve the level of trade. In recent years, China has established a crop of Free Trade Zones and hastened the construction of industrial parks in the Belt and Road countries. In the future, China will promote high-standard liberalization and facilitation of trade and investment, fully implement the system of pre-establishment national treatment plus a negative list, significantly relax market access, further open the service sector, and continue to protect the legitimate rights and interests of foreign investors.
Finally, it is necessary to create an enabling environment for institutions, finance, security, and public opinion in order to promote the Belt and Road Initiative.
New Pattern Benefits the World
The report of the 19th CPC National Congress looks at promoting a new pattern of all-round opening as a key point in the implementation of the new concept of development and the building of a modern economic system. In the eyes of Zhang, this supports the basic idea that the Chinese internal and external economy is one and the same and that it must progress as a whole, it also illustrates the strong influence of China’s economic development on global economic development.
On the one hand, China’s economic development has given a new impetus to global economy. At present, China’s openness to the outside world has reached a certain level in terms of both scale and depth. China’s economic development and foreign economic development are highly integrated and interrelated. In 2016, it contributed more than 30 percent to global economic growth. The good effects of building a modern economic system in China have not only been reflected in the country, but they have also given a strong impetus to global economic development.
On the other hand, the modern economic system that China insists on is an open system. Being the second largest economy in the world, its economy is closely linked to the global economic system and its development perspective should also be globalized. Therefore, when we talk about business efficiency, product quality, and competitive advantage, it should target the entire global market, not just the domestic market. The reference system for economic development should move from a purely domestic to the international market as a whole, forming a network of global trade, investment, financing, production, and services.
“In the face of economic globalization and the embarrassment caused by the loss of direction of global governance reform, China is playing its role as a major, responsible country, reaffirming that China will not close its door to the world, instead, it will cover new ground in pursuing opening-up on all fronts. Its global significance and effect will be extensive and far-reaching,” Zhang concluded.