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Gao Hucheng: China will Open Up More with Further Development


On December 9, the People’s Daily published a report entitled "China will Open Up More with Further Development—Thoroughly Study and Implement President Xi’s Important Exposition about Comprehensively Deepening Reform" authored by Gao Hucheng, the Secretary of Party Committee and Minister of Commerce of PRC. The whole report is as follows:

China will Open Up More with Further Development
-- Thoroughly Study and Implement President Xi’s Important Exposition about Comprehensively Deepening Reform

By thoroughly studying and implementing the spirits of the 18th CPC National Congress and the Third Plenary Session of the 18th CPC Central Committee, we deeply realize that, the goal of “Two One Hundred Years” and the Chinese Dream of the great rejuvenation of Chinese nation guide our way forward. President Xi Jinping pointed out that, “China will adhere to reform and opening up. China will open up more with further development, and China will never close its door of opening up.” To promote a new round of opening up at a new historic starting point is the historic responsibility we must shoulder.

The Path to Realize Chinese Dream Is Inevitably the Path to Opening Up

As President Xi Jinping pointed out, “history is the best textbook.” Looking back the history of 35 years of opening up, rethinking the lessons we’ve learned over the past 170 years, and referring to the development history of current world powers, we may draw a basic conclusion that, opening up will certainly go with China's modernization process, and the path to realize national rejuvenation and Chinese Dream is inevitably the path to opening up.

The process of reform and opening up eloquently proved that seizing opportunities and expanding opening up are valuable experience we’ve learned. China’s opening up has gone through the exploration period characterized by pilot during 1978-1991, the expansion period featured by policy guidance during 1992-2000, and the deepening period characterized by systematic opening up since 2001. At present, China ranks the second worldwide in terms of economic aggregate and market size and tops other countries in terms of foreign trade export and foreign exchange reserve, and is among the leading countries in the world in term of two-way investment. All of these remarkable achievements are credited a lot to opening up.

Chinese history profoundly showed that, opening up contributed to a flourishing age, while seclusion led to decline. The prosperity of the Han and Tang Dynasties was credited to a high degree of opening up. The Han Dynasty gained world renown for the “Silk Road” that “brought in various foreign treasures from all sides”. In the Tang Dynasty, envoy of foreign shipping was dispatched to Guangzhou to be specifically in charge of trade, and a lot of “foreign traders” were permitted to settle down in China for the purpose of trading. In the Song Dynasty, the economy and technology peaked in feudal times with the trade partners reaching over 50, and the Bureau for Foreign Shipping was specially established to “attract foreign traders and circulate goods”. Reflecting the Ming and Qing Dynasties, we can see that China repeatedly secluded itself from the outside world, so that it degenerated into a passive position under attack after the Opium War.

World history repeatedly indicated that developed countries are all open ones, and that opening up is the only path leading to powerful nation and flourishing age. The trade caravans’ travelling across three continents of Europe, Asia and Africa in ancient Rome created a scene of “all roads lead to Rome”; the capital city of Arab Empire was honored as the “one-of-a-kind city”, and hundreds of ships from various countries are anchored in the wharf there. After the great discovery of geography, rising powers all had adopted the policy of opening up. For example, the Netherlands was known as the “Carter at Sea” in the 17th century, with the number of international mechanical transport ships reaching 1,800; through imitating the west and expanding opening up, Russia carried out the reform of Peter the Great and Japan the Meiji Restoration, and both walked on the path to prosperity. Economic globalization is a higher level of opening up, which means transnational flow of commodities, services and elements. Market economy, in essence, is open economy; opening up may lead to prosperity, while seclusion will lead to marginalization.

To realize the Chinese Dream of the great rejuvenation of Chinese nation decides that China must follow the path of open development. China has made enormous achievements in its development, but is well aware that, China is and will remain at the early stage of socialism for a long time to come. Its per capita GDP ranks at about the ninetieth worldwide, or only one sixth of that of developed countries; China is infirm in international division of labor, and there’s a huge gap between its technical level and innovation ability and the advanced world levels, and its cultural soft power is quite weak. In order to achieve the goal of “Two One Hundred Years”, we must accomplish arduous tasks ahead. Only through further opening up, can we speed up the pace of reform and development. To follow the path of opening up is an inevitable requirement for realizing the great rejuvenation of Chinese nation. China’s opening up is a long-term historical process rather than an expedient; it’s not the end of opening up now but a new starting point of improving the level of opening up. As President Xi Jinping emphasized, “we should stick firmly to the path of reform and opening up to a stronger China”, and “carry out continuous reform and opening up”.

Comprehensively Deepening Reform Needs the Driving Force of Opening Up

Over the past 35 years, China’s opening up has made remarkable achievements, with its open economic indicator leaping to the forefront of the world, and there is an opinion that China has accomplished its task of opening up. However, compared with international level, China’s opening up level is not high, and there is much space for expansion. The internal and external environment of China’s reform and development put forward more and higher requirements for opening up.

To meet the urgent need to conform to the world trend. President Xi pointed out that, “to adhere to and develop socialism with Chinese characteristics under new historical conditions, we must stick to our own path and conform to the world trend”. What we have now is an open world, and with the in-depth development of economic globalization and world multi-polarization, the concurrence of competition and cooperation, and the coexistence of challenges and opportunities, there is a time when the interdependence among various countries deepens and common interests increase, as well as a time of fierce competition in comprehensive national strength and striving for high ground in technological revolution and industrial revolution. In the mid-18th century, the second half of the 19th century as well as the 1960s and 1970s, China missed the opportunities brought about by the world’s three industrial revolutions. Since the 1980s, China has seized the opportunity brought about by economic globalization and become one of the major beneficiaries. Currently, with the in-depth development of the economic globalization, an industrial revolution is lurking, and the global value chain expands rapidly. Also, we must grasp the opportunity and strive to become a beneficiary of the economic globalization.

To meet the urgent need to respond to the new situation evolved from the economic globalization. Under the background that the Doha Round negotiations reached a deadlock, regional economic cooperation is growing vigorously, with the number of free-trade agreements concluded worldwide reaching 220 by July this year. Major developed countries have accelerated the implementation of free trade area strategies, especially the “Two Oceans” strategy of the U.S., which will exert great influence on the geopolitics and the world economic pattern. The outstanding feature of this round of regional cooperation climax is that developed countries take regional cooperation as the “benchmark” for high-level international economic and trade rules. If we inadequately respond to the formulation of new rules, we will be exposed to the risk of being marginalized, which will adversely affect the external environment of China’s development.

To meet the urgent need to change the mode and adjust the structure. The bonus of opening up for China’s entry into the WTO is decreasing; hard constraints on population, resource and environment are being continuously reinforced; such traditional competitive advantages as labor, land and energy are weakening; it is urgent to cultivate new advantages in such aspects as marketing, technology and brand; mid- and high-end industries are still in the starting and climbing up stages. Therefore, we are able to accelerate changing the mode and adjusting the structure only through further expanding opening up and improving the level of open economy.

To meet the urgent need to cross the middle-income trap. China’s per capita GDP has broken through USD 6,000 which is a gateway of development. In the 1960s, there were a total of over 100 middle-income economies worldwide, only more than 10 of which successfully moved into the ranks of developed economies, while most of the remaining ones fell into the middle-income trap, which has much to do with stagnant opening up and inadequate innovation. For example, some Latin American countries implemented excessive protectionism after the Second World War, so that the industry lacked international competitiveness, which led to the repeated outbreak of crisis and stagnant economic development. China can cross the middle-income trap only by breaking through the development bottleneck in the process of opening up.

To meet the urgent need to promote reform through opening up. Reform and opening up are two driving forces for China’s development, and opening up is also a reform to some extent. Without reform, opening up would like water without a source and be ineffective; without opening up, reform will be disoriented and won't go far. President Xi said that, China’s reform is now going through a very crucial period, “we should neither take measures without regard to changes in circumstances nor divorce ourselves from the masses and from reality and act blindly”. Through opening up, not only our horizon will be broadened, but domestic reforms will also be promoted, and thus the quality and level of domestic development being improved. To overcome the “barriers” in reform, it is necessary to increase the impetus to reform with a higher level of opening up.

Comprehensively reviewing the current world trend and China’s development trend, we should take the initiative to achieve development in the trend forward of the times. Confronted with severe challenges of the internal and external environment as well as the pressing task of realizing the goal of “Two One Hundred Years”, we will find there’s no way out without opening up or with halting opening up. China’s opening up is not a passive move, but an inherent requirement for China’s own development.

Selection of Path for Expanding Opening Up

President Xi stressed that, “reform and opening up is a never-ending process”. The Third Plenary Session of the 18th CPC Central Committee put forward the requirement that we should speed up perfecting the open economic system and construct a new open economic system. This requires us to strengthen the strategy planning and policy coordination, and to promote opening up to a new height based on the principle of full participation and breakthrough at key points.

To build consensus on opening up. We shall observe and look at the world and China with a broader view and mind, learn to position China in the global political and economic environment, objectively recognize the gap between China and developed countries, modestly learn advantaged experience from various countries, as well as effectively grasp and respond to the opportunities and challenges in the age of economic globalization.

To boost the confidence in opening up. We should see that, during the past 35 years, China has become more confident in opening up than it was at the beginning of reform and opening up as well as its entry into the WTO. With huge potential in economic development, better conditions of materials and technology, as well as enhanced self-regulating capability, China’s international status and influence have been significantly improved. Market will play a decisive role in resource allocation, and mutual promotion of reform and opening up will be further deepened. An increasing number of enterprises will reach out to the world, and the global resource allocation capability will be remarkably reinforced. China’s conditions to expand opening up will be more favorable, with more room for maneuver.

To clarify thoughts of opening up. We should enhance the top-level design and strategic layout for opening up, and take the initiative of opening up; stick to internal and external coordination and persist in the consistency of immediate and long-term interests; properly grasp the pace, intensity and sequence of opening up, and strive after benefits for China’s development to the greatest extent for the purpose of needs of domestic reform and development; adhere to the principle of cooperation and win-win, and unswervingly act as the propellent of economic globalization, the practitioner of trade and investment liberalization, the participant and maker of international rules, as well as the defender of common interests and the builder of a harmonious world.

To grasp the focuses of opening up. We should increase the level of open economy in an all-round manner, and accelerate cultivating new competitive advantages in participating and leading international economic cooperation. Firstly, we shall ease the investment access, promote the orderly opening up of the financial, education, culture, medical and other service industries, and loosen the restrictions on the admission of foreign investment in certain fields; complete the construction of China (Shanghai) Pilot Free Trade Zone; speed up the conclusion of investment agreements and expand foreign investments by enterprises and individuals. Secondly, we shall accelerate the construction of free trade areas; adhere to bilateral, multilateral, regional and sub-regional opening up and cooperation, so as to form a high-standard and globally-oriented free trade area network. Thirdly, we shall expand opening up in the hinterland and border areas; promote coordinated development of inland trade, investment and innovation, speed up the interconnection in the surrounding areas, and push forward the construction of the economic belt of the Silk Road and the Maritime Silk Road, so as to form a new pattern of all-round opening up. Meanwhile, we shall learn to find out the breakthrough to promote reform through opening up, for example, taking national treatment and the negative list prior to the admission as the breakthrough to propel the investment system innovation and taking the deepening of the circulation system reform as the breakthrough to promote the construction of a modern market system with unified opening up and orderly competition.

To improve the capability of opening up. We should comprehensively strengthen the construction of opening up capability, to improve the capability of participating in international negotiations and formulating international rules and the ability to coordinate internal and external opening up as well, on the basis of the principle that priority shall be given to areas subject to external opening up for internal opening up. In addition, we should improve our capability to safeguard national economic security, set up a scientific view of economic security, make financial security a top priority, and pay close attention to industry, food and energy security as well as the security of overseas assets and personnel.

Translated by Hu Xiaoying

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