Reform and Opening-up Brings Development and Changes

After 35 years of high-speed development, China is again at the brink of major readjustment and reform. The country’s achievements over the past three and half decades have polarized world attention. China’s share of world GDP has soared from 1.2 percent in 1978 to 10.3 percent in 2012, and that of GDP per capita from US $360 in 1978 to US $7,800 in 2012. These figures are just a facet of the vast changes that have taken place in China.

Over the past 35 years, China has moved from the perimeter to the center of world wealth distribution. The country has transformed its role as outsider to main guardian of the liberal international order, at whose core is openness, prosperity and international governance. China has thus changed from a passive observer of world culture to a co-builder of today’s advanced global culture.

Over the years, China’s international status has rapidly risen. Henry Kissinger admits in his book On China, published in 2011, that when he accompanied the late U.S. President Richard Nixon to China in February of 1972 and witnessed the U.S. President shake hands with China’s leaders, so ending the 29-year-long mutual hostility between the two nations, he never imagined China could achieve so much in terms of development, power and status. In 1999, senior fellow of the U.K.-based International Institute for Strategic Studies Gerald Segal said in an article published in Foreign Affairs, “At best, China is a second-rate middle power.” Segal’s prediction has since made him the frequent butt of jokes among international relations academics.

In the past 35 years, the rise of China has been the main impetus for the restructuring of world power. China’s rapid and sustained economic growth has taken East Asia to equal ranking with Western Europe and North America within the global economic, trade and financial systems. The rise of China has thus invigorated the East Asian economy and accelerated the region’s integration, enabling East Asia to surpass Western Europe and North America by achieving the fastest growth at the center of the global economy. Thanks to the sustained economic development of China and its neighboring countries in the region, East Asia has in the 21st century become a dazzling “powerhouse” in the world political and economic arena.

Growing Pains

Many big problems, however, have accompanied China’s development. Non-stop industrialization and modernization of its huge population’s lifestyle have made China the biggest emitter of carbon dioxide and other pollutants. As the “world’s factory,” China’s demand for resources and energy has played a decisive role in the global energy and resources supply system, making the country ever more reliant on the world market, resources and energy. In October 2013, China overtook the U.S. as the biggest oil importer and consumer, with a daily consumption of 6.4 million barrels. But due to technological limitations and its traditional energy structure, China’s energy consumption per unit of GDP is still far behind that of developed countries like the U.S. and Japan. The country hence faces escalating pollution, evident in heavy and frequent smog in Beijing. More alarming still is the deterioration of air quality not only in Beijing but also coastal cities and major cities in the hinterland.

Meanwhile, China’s break-neck economic expansion has thrown the economy out of kilter with the country’s political governance and social development. This has brought about many new economic and social problems. They include the widening income gap, conflict between rising capital investment and stagnating everyday incomes, and the as yet unresolved problem of balancing urban and rural development.

Advancing commercialization has moreover accentuated the need to guarantee honest and efficient political governance. The Chinese government has promulgated many anti-corruption measures prohibiting officials at various levels from abusing their power to gain profits. Corruption nevertheless shows a rising trend.

The government has also decided to relax the “one-child” policy, in force since the beginning of reform and opening-up. Although the policy has successfully controlled the birth rate, China’s population is aging and the working-age population is shrinking. This raises the possibility that China might get old before it gets rich.

That new problems have arisen in China is only to be expected. This is inevitable in the evolutionary course of any human society. The question of whether or not the social system can generate sufficient sustainable innovation and development to solve such problems hinges on that system’s intrinsic ability in this respect. Innovation and development are always supported by continuous reform; it is the process through which to reach a consensus on the political and social systems and to overcome new problems. Reform is also the mode whereby a country or nation pursues innovation and prosperity, and through which its system and development model mature.

Difficulties of Reform

China faces unprecedented difficulties in bringing into effect large-scale reform and readjustment. First, certain vested interest groups have formed amid China’s fast economic development, but reform calls for re-distribution of wealth. That is to say, China needs to “perform surgery” on its current governance system. This goal is far more difficult to achieve than the simple consensus that “poverty is not socialism” reached 35 years ago at the beginning of reform and opening-up. Second, over the past 35 years, a large bureaucratic system has come into existence. Reformers must deal with the obstructions they encounter within it of backward thinking and conventions if they are to find new routes and methods of remolding the current system and bringing about the huge changes that China needs. Third, globalization and informatization have enabled different social groups to express diverse opinions and demands with regard to their common interests. Reforms, therefore, must guarantee the interests of broad masses of the people. To accomplish this, reformers need to establish a new social consensus among different groups to achieve a new equilibrium in China’s future society. This task cannot be compared to any in earlier periods of development in China’s history. In other words, China needs a social and political consensus now more than it ever has at any previous period of development.

Reform Dividends

What is encouraging, however, is that China is amid an era of vitality and vigor. China’s new leadership, headed by President Xi Jinping, is aware of its historic responsibility and is intent on maintaining the competitiveness of China’s economy and sustainable development through continuous reforms. Since November 2012, when Xi Jinping was elected General Secretary of the CPC, he has made 19 inspection tours around China, during which he has mentioned reforms on 18 occasions. Premier Li Keqiang has stated that although China is losing its cheap labor demographic dividend, it can reap more dividends from reform.

The reform decision made at the Third Plenary Session of 18th CPC Central Committee covers 15 fields, through a sequencing of major and important reform measures. Reform measures regarding the judicial system, ecological conservation and development, and rural land resources are extremely innovative. The whole reform plan clarifies the direction of China’s future development. For example, it states that the market will play a “decisive” role as opposed to the former “basic” role in China’s economic development. It moreover calls for an upgrading of China’s political governance to promote democracy and rule of law. This includes establishment of a new national security commission that will enable better planning of domestic and international work as a whole and development of national security strategies. The plan also demands the setting up of a central leading team to “comprehensively deepen reform.” Its responsibility will be to guarantee implementation of reform plans and to consider and adopt pragmatic reform approaches. President Xi Jinping emphasized when expounding on the reform measures that China will enhance top-level design and strategic planning. He concluded by saying that to launch reform, China must be bold, move fast and be ready to take risks.

Today, major countries and regions around the world all face pressing demands for reform. Europe wants to extricate itself from the sovereign debt crisis; U.S. President Obama advocates health care reform and is taking action to promote American manufacturing; Japanese Prime Minister Shinzō Abe advocates “Abenomics”; and President Vladimir Putin is determined to recreate the past glory of Russia. Having been through the 2008 financial crisis, countries around the world are desperately trying to regain vitality and creativity through internal reforms. Most, however, in the face of obstacles wrought by different political powers in their countries, are struggling to bring their reform plans into effect. The reform plan made during the Third Plenary Session of the 18th CPC Central Committee takes the lead in raising the flag of reform in the world arena. It can thus be expected that the Chinese leadership will bring changes not only to China, but to the world.