Pursuing High-Standard Opening Up to Promote High-Quality Development

Throughout China’s modernization drive, we have made new achievements through opening up to propel reform and development. High-quality development requires commensurate and coordinated high-standard opening up. On the new journey ahead, to promote high-quality development with high-standard opening up, we must fully comprehend and act according to the latter’s basic features, including reform of its systems and institutions; interplay between internal and external economic flows; systematic, coordinated, and comprehensive aspects; and inclusivity and security. This will enable us to achieve more dynamic, resilient, equitable, and sustainable development. 

I. Reforming systems and institutions for opening up and stimulating high-quality development

A core feature of high-standard opening up is institutional openness. An urgent task China currently confronts in its development is to create systems and institutions geared toward high-quality development. Since the introduction of the policy of reform and opening up in 1978, China has constantly reformed its systems and institutions. Our once highly centralized planned economy has been transformed into a socialist market economy aligned with international economic and trade rules, in which the market plays a decisive role in allocating resources and the government’s role is better leveraged, with mutual promotion between greater opening up and deeper reform. Reform is no less complex, reactive, and arduous today than it was in the initial period of reform and opening up, and high-standard opening up can break through vested interests and even produce lasting change. We must focus on institutional openness to spur domestic institutional reform and innovation and conduct reform in more critical and unexplored areas by developing new institutions for high-standard opening up. Only by doing so can we achieve significant unity of purpose between high-standard opening up and high-quality development at the institutional level. To stimulate high-quality development, we need to enhance the top-level design of the new open economy and promote high-standard opening up centered on new institutions. 

The Haikou International Duty Free City, operated by China Duty Free Group, in Hainan Province, January 16, 2024. According to Haikou Customs Office, Hainan has continued to increase its volume of goods imports and exports, which exceeded 200 billion yuan for the first time in 2022. In 2023, new records were registered for the scale of imports and exports, both combined and separately. PHOTO BY XINHUA REPORTER PU XIAOXU

We will increase our openness to flows of commodities and production factors and encourage their flow in greater volumes and higher quality. To this end, we must further promote tariff concessions, reduce import tariffs on industrial products and certain energy resources, and lower import tariffs on everyday items that have a direct bearing on people’s lives. We will also adjust import tariffs on certain advanced technological equipment and key components at appropriate junctures and increase imports of high-quality consumer goods, advanced technology, key equipment, and energy resources. 

Furthermore, with a focus on promoting high-standard opening up, we will continue our reform across the board and expand institutional opening up with regard to rules, regulations, management, and standards, so as to ensure high-standard institutions for high-quality development. We need to make greater efforts to match the high standards of international economic and trade rules, and concentrate on developing pilot free trade zones, free trade ports, and trials of opening up the service sector. We also need to open up further and relax restrictions on registered capital and methods of investment in key areas. We will increase innovation in systems and mechanisms, reduce further the negative list for foreign investment, and accelerate improvements to regulatory models compatible with new models and new forms of business such as digital trade. We shall institute sound negative list management for cross-border trade in services, reform behind-the-border management related to SOEs, intellectual property rights, and market procurement, resolve deep-seated problems restricting a more open economy, and foster a world-class, market-oriented, and law-based business environment. We will persistently promote high-standard opening up based on the rule of law, develop the rule of law in foreign-related affairs in the course of expanding opening up, and consolidate the legal foundation for high-standard opening up.

Visitors test out VR devices in the medical equipment and healthcare products exhibition area of the Sixth China International Import Expo, November 5, 2023. The expo, which was held at the National Exhibition and Convention Center (Shanghai) from November 5 to 10, showcased high-quality products from around the world. PHOTO BY XINHUA REPORTER WANG XIANG

II. Understanding the interplay between internal and external economic flows and building a solid foundation for high-quality development

Creating a new development dynamic that focuses on domestic economic flows and features interplay between domestic and international flows is an innate requirement for high-standard opening up and a necessity for high-quality development. Since the 18th CPC National Congress in 2012, the Central Committee with Xi Jinping at its core has made coordinating domestic and international economic flows the focus of China’s new round of opening up, thereby increasing the degree and resilience of our openness to the rest of the world. Domestically, final consumer expenditure remains at more than 50% of the GDP, and capital contributes an average of over 40% to economic growth. The domestic economy is functioning smoothly, with the foundations of investment and consumption being stable, providing support for China to deal with changes in the international environment. Internationally, between 2012 and 2022, China’s total trade in goods and services increased 71.5%, to 42 trillion yuan, and 96.2%, to 5.98 trillion yuan, respectively, reinforcing China’s status as the largest trader of goods and second largest trader of services in the world. In the same period, foreign investment inflows rose 61.2%, to 1.2 trillion yuan, placing China among the world’s top bilateral investors. By late June 2023, China had signed over 200 Belt and Road Initiative (BRI) cooperation documents with more than 150 countries and 30 international organizations, Silk Road maritime shipping routes had served 117 ports in 43 countries around the world, and China Railway Express had completed over 74,000 journeys, reaching over 200 cities in 25 European countries. 

To encourage interplay between internal and external economic flows, we will construct a dual-loop system comprising more open domestic and international flows and create connections between the domestic and international markets that support high-quality development. 

We will strive to increase domestic demand, boost domestic economic flows, and strengthen domestic foundations for high-quality development. We will stimulate potential consumption, increase profitable investments, and create a virtuous cycle between consumption and investment. We will cultivate and expand new types of consumption, endeavor to develop digital, green, and healthy consumption, and foster new consumption growth points. We will expand traditional areas of consumption and boost consumption of major consumer goods such as new energy vehicles and electronic products. We will develop a distribution system for both domestic and foreign trade, in order to strengthen foreign trade while enhancing the synergy between domestic and foreign trade, as well as promote links between domestic and foreign markets in areas including intellectual property rights, quality assurance, inspection and testing, and certification and accreditation. We will improve investment and financing mechanisms, leverage the driving and augmenting role of government investment, implement new mechanisms to foster cooperation between government and private investment, and support private investment in new infrastructure and other areas of development. We shall continue to unleash the potential of China’s central and western regions, dismantle regional blockades and monopolies to create a unified national market, and help inland regions to better utilize international markets and resources. We will deepen supply-side structural reform, boost domestic supply capabilities for key raw materials and core technologies, make our supply structure better respond and adapt to changes in demand, and strengthen our ability to chart the course of our opening up.

Moreover, we will expand high-standard opening up by raising the quality and level of our participation in the global economy and creating international conditions conducive to high-quality development. We will also cultivate new drivers and consolidate the fundamentals of foreign trade. We shall avail ourselves of the advantages presented by our vast domestic market to attract high-end factors, such as high-technology and high-caliber talent, and bolster our global resource allocation capabilities. We will improve links between the domestic and international markets and demand as well as strengthen connections and interplay between domestic and international economic flows, so as to form a positive cycle in which external factors promote domestic development and domestic demand promotes foreign trade. We shall assist with the implementation of the eight steps for supporting the high-quality development of the BRI and ensure both major signature projects and small, yet effective, wellbeing projects are carried out. We need to improve global industrial chains, use innovation to foster and develop high-end industries, and support production factors, supply chains, and international spaces for development to ensure that China’s economy continues to move toward high-quality development. 

III. Coordinating high-standard opening up and ensuring stable high-quality development

To promote high-quality development through high-standard opening up, we must establish a systematic, coordinated, and comprehensive approach to opening up. Today, China faces the globalization of goods, services, production factors, and information, and competition among major countries has expanded from trade to other fields, including science and technology and finance, becoming more multifaceted, complex, and challenging. Countries with strong economies since the 18th century, such as the United Kingdom, the United States, and Japan, have developed comprehensive advantages in certain products, technology, production factors, shipping, and finance, giving them greater influence over regional, and even global, economies and trade. High-standard opening up is an expansive and influential systems engineering project. It cannot be achieved by concentrating on a single field, location, or approach; rather, it requires a concerted effort by all fields and government departments at all levels, together with strong planning and coordination. As our economy shifts from rapid growth to high-quality development, the matters requiring our attention have become more multifaceted and the factors requiring the cooperation of multiple parties have become more comprehensive. We must rally all forces and utilize all resources to create new synergies and collaborations for the success of China’s opening up. 

Applying systems thinking to promoting high-standard opening up, we need to strengthen the integration, coordination, and efficiency of relevant systems. We also need to create a broader environment of opening up in which there is mutual infiltration and coordinated cooperation and exchanges of goods, capital, technology, talent, and data, in order to boost the overall efficacy of development and provide a solid foundation for Chinese modernization. 

The SNL Haikou departs Qingdao Port for the Port of Chennai in India, August 30, 2023. Since the start of 2023, Qingdao Port has sustained double-digit growth in container volume traffic with countries and regions along the Belt and Road. XINHUA / PHOTO BY ZHANG JINGANG

We need to increase coordination across departments, fields, and industries to develop a concerted force for opening up and development. We must accelerate the integration of foreign trade, foreign capital, foreign investment, and other economic and technological cooperation, as well as coordinated development between commodities and services trade, trade and investment, and the strategies of both “bringing into the country” and “going global.” We will better coordinate trade policies with fiscal, monetary, employment, industrial, regional, scientific and technological, and environmental policies, in order to unify our policy approach and achieve a policy consensus, thereby forming a joint force for high-quality development. 

Furthermore, we need to make opening up more overarching and coordinated and increase its overall intensity. We will participate in global scientific and technological cooperation, further open up the field of science and technology, form a globally competitive open innovation ecosystem, and enhance our independent innovation capabilities in the course of opening up. We will participate in-depth in the division of labor and cooperation across global industrial and supply chains, focus on cooperation regarding localized, integrated, and multi-dimensional development, and boost global resource allocation capabilities and international competitiveness. Premised on adhering to and participating in the global multilateral trading system, we will achieve a better balance of opening up to both developed and developing countries, in both multilateral and regional channels, strike the right balance between opening up by agreement and in a voluntary manner, and boost the comprehensive and systemic nature of our opening up. While improving the quality of trade and investment, we shall gradually strive to exert greater influence and decision-making power over the formation of systems and policies in the areas of international finance, trade and investment, and the industrial division of labor. 

IV. Understanding the inclusivity and security of high-standard opening up and ensuring the sustainability of high-quality development

In recent years, domestic and international issues that have a bearing on China’s national security have become interwoven. External risks and challenges have increased overall, posing complex and severe challenges for high-standard opening up. Internationally, the world is undergoing changes unseen in a century. A backlash against globalization is rising, with mounting unilateralism and protectionism. Risks are increasing in the global economy, competition among major countries is intensifying, and the geopolitical landscape is becoming more complex. Global problems such as terrorism, climate change, food shortages, and energy crises persist, and there is turmoil in global political and economic spheres. Domestically, with the gradual expansion of opening up and reforms, risks to economic security have arisen in various areas, making opening up and high-quality development under safer conditions a difficult task. 

To achieve stable and enduring high-quality development, we need to balance openness with security, continue the interplay between high-quality development and high-level security, and strive to create a safer and more stable international environment. We need to focus on the basic requirement of opening up securely and establish a risk management system built around security and control. We need to be mindful of worst-case and extreme scenarios. We should double our efforts to develop modern credit- and law-based systems and mechanisms for risk mitigation that utilize advanced technology and information platforms, in order to guard against and ameliorate major risks in various fields. We will expand and deepen our relations with other countries and regions to promote international cooperation on key issues affecting the wellbeing of humankind, such as climate change, food shortages, energy crises, people’s lives and health, and environmental governance, mounting joint responses to global challenges. Moreover, we must adhere to a people-centered philosophy of development and enable everyone to enjoy the fruits of Chinese modernization. We will promote the high-quality development of the BRI, quickly build a multidimensional Belt and Road connectivity network, and strengthen the development of multilateral cooperation platforms with BRI countries in the areas of energy, taxation, finance, green development, disaster reduction, anti-corruption, think tanks, media, and culture. We will participate in negotiations on international economic and trade rules, promote an open, diverse, and stable world economic order, boost China’s participation, influence, and voice in global economic governance, and foster a broader circle of friends to achieve a higher standard of opening up. Based on the objective of building a global community of shared future, we will use high-standard opening up to make economic globalization more open, inclusive, and universally beneficial, promote modernization in developing countries, and create an open, inclusive, and interconnected world. 

Gu Xueming is Party Committee Secretary and President of the Chinese Academy of International Trade and Economic Cooperation, Ministry of Commerce of the People’s Republic of China.

(Originally appeared in Qiushi Journal, Chinese edition, No. 4, 2024)