Yang Jijun: Constructing a New System for a Higher-Level Open Economy through Institutional Opening-up [1]
Since the beginning of reform and opening-up, China has actively promoted trade and investment liberalization, proactively integrated into the global value chain division of labor system, and facilitated the integration of its domestic economy into the great global economic circulation through international competition and cooperation. Traditional trade and investment liberalization primarily targets the cross-border flow of goods and factors. With the gradual reduction of global tariffs, the issue of "border opening" (biānjìng kāifàng) has basically been resolved. Entering the new stage of high-level opening to the outside world, the focus of opening-up has shifted toward "behind-the-border opening" (jìngnèi kāifàng), emphasizing alignment with international prevailing rules in fields such as intellectual property rights protection, government procurement, and industrial subsidies. In 2018, the Central Economic Work Conference proposed for the first time "promoting the transition from an opening-up based on the flow of goods and factors to an institutional opening-up based on rules and other systems." Compared to the former, institutional opening-up emphasizes proactively docking with high-standard international economic and trade rules and promoting the connectivity and compatibility of rules, regulations, management, and standards.
The Primary Content of Institutional Opening-up
Rule Opening. "Rules" refers to prevailing international economic and trade rules, including World Trade Organization (WTO) rules and regional trade agreement rules. WTO rules cover issues such as manufacturing tariffs, government procurement, anti-dumping and anti-subsidy measures, and trade facilitation. Rules in regional trade agreements also include competition policy, data protection, innovation policy, regulatory cooperation, and labor market regulation. Rule opening involves both complying with existing international economic and trade rules and participating in global governance to co-construct new international rules. Rule opening is the foundation of institutional opening-up, providing basic codes of conduct.
Regulatory Opening. "Regulations" refers to the norms and controls implemented by the government for specific industries and fields, involving government constraints on foreign-related economic activities. Regulatory opening focuses on clarifying the boundaries of government action and reducing unnecessary government intervention. Its ultimate aim is the coordination and consistency of regulatory rules across countries, reducing compliance costs and enhancing the efficiency of international economic activities. In recent years, China has eliminated foreign equity limits in the financial sector and removed restrictions from the negative list for manufacturing, such as those requiring "Chinese-side shareholding for publication printing" and "prohibiting investment in the application of processing techniques such as steaming, frying, moxibustion, and calcination for Chinese herbal slices [1], as well as the production of secret formula products for proprietary Chinese medicines." This has achieved "zero" restrictive measures for foreign investment access in the manufacturing sector—a vivid manifestation of regulatory opening.
Management Opening. Management opening primarily targets government management models. Its core is streamlining administration and delegating power [2], optimizing government services, and enhancing administrative efficiency. For example, strengthening the construction of "single window" systems for international trade, innovating comprehensive customs supervision models, and implementing commercial system reforms such as the "separation of permits from licenses" (zhèngzhào fēnlí) are all manifestations of the government optimizing management models and creating a market-oriented, law-based, and internationalized first-class business environment. These are essential components of management opening.
Standard Opening. "Standards" are rules and guidelines provided for commodity production, including environmental standards, labor standards, and digital field standards. Standards can regulate corporate behavior, ensure that enterprises carry out production and business activities according to qualified processes, and provide the possibility for improving product quality and service levels. Currently, prevailing international standards are mainly formulated by organizations such as the International Organization for Standardization (ISO). Under international standards, various countries or regions also have their own standards, such as the European Union (CE), China National Standards (GB), and Japanese Industrial Standards (JIS). Standard opening provides a more concrete measurement scale for management, helps reduce compliance costs, and improves adaptability within the international trade system.
Challenges and Countermeasures for Promoting Institutional Opening-up in China
Institutional opening-up is both a realistic necessity for China to stay closely aligned with the latest practices of high-level opening and grasp the latest characteristics of opening-up, and an inevitable choice to conform to new trends in international economic development and respond to international challenges. Currently, competition in the field of international economic and trade rules is intensifying, with Western developed countries dominating the reconstruction of these rules.
Since the 21st century, the influence of developing countries and emerging economies on the world economy has risen year by year. Platforms such as APEC and BRICS have played an increasingly strong role, injecting a "development component" into the reconstruction of international economic and trade rules. At the same time, however, developed countries are stepping up their control and competition for dominance over these rules, pushing for the formation of a new generation of international trade rules conducive to maintaining their interests. In this context, advancing institutional opening-up and building a higher-level open economy requires efforts from multiple dimensions.
Widespread absorption of beneficial experience to establish institutional mechanisms aligned with international prevailing rules. For example, referencing the "cumulative rules of origin" in the Regional Comprehensive Economic Partnership (RCEP), China should launch facilitation-oriented systems such as "declarations of origin" and "back-to-back Certificate of Origin" [3]. We must advance commercial system reform, establish an administrative management system compatible with high-standard international economic and trade rules, and promote a shift in government management from focusing on pre-approval to focusing on in-process and ex-post supervision. Benchmarking against the high-standard requirements of the Digital Economy Partnership Agreement (DEPA), we should continuously relax market access in the digital field, promote and regulate the cross-border flow of data, and advance institutional opening-up in digital trade. By actively docking with global prevailing rules and absorbing the broad consensus of international anti-monopoly law, we can promote the shift of industrial policy from selective to functional, and from preferential to competitive, forming a unified, open, and orderly competitive market environment.
In new fields where unified international rules have not yet formed, carry out "pioneer trials" (xiānxíng xiānshì), launch Chinese solutions, and seize the "discourse power" (huàyǔquán) in the formulation of international rules. Institutional opening-up includes both comprehensive alignment with high-standard international rules—"institutional learning"—and active participation in global governance to provide institutional solutions to the world—"institutional innovation." Consideration can be given to relying on the Belt and Road Initiative to build an open and inclusive platform for common development. Regarding important issues in digital and green trade rules, we should choose rule areas where our comparative advantages are obvious, contribute Chinese wisdom, and expand China's influence on international economic and trade rules.
Strengthen the construction of integrated institutional innovation in Pilot Free Trade Zones and carry out trials of economic and trade rules to explore practical paths for deepening institutional opening-up. High-standard trade rules are "deep-layer rules" based on existing WTO rules, characterized by a wide scope and high complexity. We should utilize the "pioneer trials" of Pilot Free Trade Zones to conduct stress tests for benchmarking against high-standard trade rules. We must determine priorities, focus on trade supervision, financial opening, and administrative management system reform, cultivate an internationalized, market-oriented, and law-based business environment, and promote institutional reform and regulatory innovation. This will form a batch of leading institutional innovation achievements, exploring new paths and accumulating new experience for the construction of a new system for a higher-level open economy.
Coordinate the promotion of institutional opening-up and deep-level reform to achieve a virtuous interaction between the two. On the one hand, use institutional opening-up to provide content and momentum for deep-level reform. Institutional opening-up focuses on "behind-the-border" rules; its content is inherently part of the requirements for deep-level reform and represents the expansion and extension of "border opening" into "behind-the-border opening." On the other hand, use deep-level reform to provide institutional guarantees for institutional opening-up. By carrying out systematic, integrated, and focused deep-level reforms, we can build an open economic system that conforms to high-standard international rules, paving the way for institutional opening-up.
(Author: Yang Jijun, Dean of the School of Public Finance and Taxation, Nanjing University of Finance and Economics) Source: Guangming Daily (February 18, 2025, Page 06)