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By Long Guoqiang

Research Report Vol.20 No.3, 2018

I. We shouldn’t Sleep on past Success, but should Review and Summarize Experience and Lessons Learnt

In the past 40 years, China has achieved tremendous progress during reform and opening up, and is called by the World Bank one of the few developing economies that have benefited a lot from globalization. Looking back, we shouldn’t sleep on the past success, but should review and summarize experience and lessons learnt in order to guide our opening up in the future. The following pieces of experience are especially important.

First, it’s a dead end without opening up. Only opening up can lead to progress and make a nation prosperous.

Second, opening up is always on the way and we must press ahead with the times and constantly expand the scope of opening up. Some people think that China’s opening up is already of a high level and some think we already have enough capital and don’t need to bring in more foreign investment. However, in view of the changed domestic and international environment and the goal of building a strong modern power, China must further enlarge opening up, otherwise it cannot seize the new opportunities brought by globalization and deal with new challenges, or make use of foreign resources to better achieve the goal of building a strong modern power.

Third, in the process of globalization, the right opening strategy is critical for a nation to pursue benefits and avoid disadvantages. Very few countries in the world are completely enclosed, and many developing countries are quite open, but their opening up isn’t successful. In the past 40 years, China has blazed a path of progressive opening up, and has taken the opportunity of the cross-border transfer of labor-intensive industries to get closer to its goal of industrialization. China combines the foreign investors’ advantages in capital, technology, production, management and overseas sales channels with its own low-cost advantage and elevates itslabor-intensive manufacturing industry to be globally competitive. China therefore becomes the world’s largest exporter of manufactured goods, thus solving the problem of industrialization in a developing country. Experience both at home and abroad indicates that opening up doesn’t always work out, and a right opening strategy is extremely important.

II. As We Discuss Enlarging the Opening up at the new Historical Starting point, We should Carefully Study the Goals and Priorities in the new round of opening up.

As we discuss enlarging the opening up at the new historical starting point, we should be firmly confident and carefully study the goals and priorities of the new round of opening up. By summarizing the basic factors considered by other countries in formulating their opening up strategy, we put forth the following trigram.

First, the opening strategy should be designed to serve the national development goals. Opening itself isn’t the goal. In any stage, the opening strategy is designed to achieve the nation’s periodic development goals. China’s ultimate goal of development is building a strong modern power. In the past few decades, our periodic goal was accelerating the industrialization, for which our opening strategy was focused on addressing the “foreign exchange shortage” that impeded industrialization. At the moment, the Chinese economy has shifted from the stage of high-speed growth to the new stage of high-quality development. In this stage, we should adjust the future opening strategy and make better use of the domestic and international markets and resources in order to enhance the innovation capability, push the rapid upgrade of industrial structure, and serve the periodic goal of high-quality development as well as the ultimate goal of building a strong modern power.

Second, we need to consider the opportunities and challenges in the current international environment. In the past 40 years, we seized the grand opportunity of cross-border transfer of export-oriented labor-intensive industries and made our labor-intensive industry more competitive in the world. Meanwhile, the global prosperity that lasted more than ten years before 2008 brought a lot of market opportunities, which contributed to China’s rapid export growth after its entry intothe WTO. However, after the financial crisis broke out, the global economy went through profound changes, global economic and trade rules were to be reshaped, and new opportunities and challenges ensued. The new round of technological revolution represented by information technology came with a strong momentum and is still in full swing, exerting deep impacts on the global production value chain and layout. Looking back, we can see that if a nation or an enterprise can seize the opportunity when facing a new round of technological revolution, it will stand out and catch up. Moreover, we are also faced with a string of new opportunities, including the R&D globalization, global surge of infrastructure construction, and the faster flow of talents to China.

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