Liu Jiangning: Understanding Institutional Opening-up from the Perspective of Governance Modernization
The "Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development," adopted at the Fourth Plenary Session of the 20th CPC Central Committee [1], dedicated a specific chapter to deploying the expansion of high-level opening up. It explicitly proposed to "steadily expand institutional opening up, maintain the multilateral trading system, expand the international cycle, and promote reform and development through opening up." This strategic deployment is grounded in the developmental orientation of the New Era, closely follows the evolutionary trends of economic globalization and the needs of domestic reform and development, and points the way forward for advancing the modernization of national governance within a higher level of opening up. At this historical intersection where domestic reform is advancing in depth and the international landscape is undergoing profound adjustments, institutional opening up is no longer merely a policy choice serving economic growth; it has risen to a strategic measure concerning the overall situation of national development, becoming a key fulcrum for restructuring the governance system, enhancing governance efficacy, and advancing Chinese-path modernization.
I
There exists a profound internal logic between institutional opening up and the modernization of national governance. The core essence of institutional opening up lies in enhancing the inclusiveness, compatibility, and predictability of opening up through systemic, high-quality institutional supply, thereby creating a stable and fair developmental environment for all types of market entities. The objective of national governance modernization is to construct a system that is comprehensive, scientific, standardized, and effective, actively responding to challenges faced in national governance and effectively resolving contradictions in the development process. Institutional opening up provides the external impetus and practical path for the modernization of national governance, forcing domestic institutional reform and innovation by aligning with high-standard international rules to break through bottlenecks and difficulties in the governance system. Conversely, the modernization of national governance provides a solid foundation for institutional opening up, ensuring the steady progress of the opening process. The two share the same direction in their goals and synchronize in practice, forming an inseparable whole in the process of Chinese-path modernization.
From the perspective of governance values, institutional opening up deeply embeds the governance orientation of fairness and justice, solidifying the people-centered value foundation. The fundamental pursuit of modern national governance is not only the speed of economic growth, but also the realization of the fair distribution of public interests, the continuous improvement of social well-being, and the well-rounded development of individuals. The equality of rules, protection of rights, and procedural justice advocated by institutional opening up are highly consistent with the value goals of modern governance, providing an important pull for the sublimation of governance values. In the practice of aligning with high-standard international economic and trade rules, China's mechanisms for protecting the rights and interests of market entities have been continuously improved, and social resource allocation mechanisms have been optimized, stabilizing the expectations and confidence of market entities. Institutional opening up drives governance values from "growth-priority" to "equal emphasis on development and fairness," allowing the fruits of development to benefit all people more extensively and equitably; it shifts from an "efficiency orientation" to a "public rationality orientation," ensuring that institutional design follows both economic laws and reflects social fairness and justice. This deeply integrates the people-centered development philosophy, making the value foundation of national governance more solid.
In terms of governance concepts, institutional opening up promotes the innovation and upgrading of governance thinking, establishing the modern concept of rule-led governance. Traditional governance models often rely on administrative directives and hierarchical management, achieving goals through power allocation and administrative orders. Institutional opening up emphasizes the realization of public goals through rule design, institutional supply, and procedural constraints, prompting governance subjects to update their conceptual structures. During the "14th Five-Year Plan" period [2], 22 Pilot Free Trade Zones covering the east, west, south, north, and central regions have produced nearly 200 institutional innovation achievements, providing vivid examples for the renewal of governance thinking. Carrying out the full coverage pilot of the "separation of permits from business licenses" reform in Pilot Free Trade Zones is not only an innovation in governance tools but also a profound transformation of governance concepts. The comprehensive implementation of the "Three Systems" for administrative law enforcement [3] has integrated awareness of the rule of law and coordination into the people's hearts. This conceptual change represents a profound grasp of the governance law of "multi-party synergy and the supremacy of rules," laying a solid ideological foundation for national governance modernization and making governance practices more consistent with the trends of the times and the expectations of the masses.
Regarding the governance system, institutional opening up drives the systemic restructuring of the institutional framework, creating a collaborative and efficient governance architecture. Institutional opening up uses rule alignment as a key lever to promote the transition of the governance system toward systematization and synergy. In the field of investment access, China has continuously reduced the negative list for foreign investment access, with the number of items on the negative list reduced from 151 in the 2018 version to 106 in the 2025 version, and the market access system has been continuously improved. In the field of property rights protection, the punitive damages system for intellectual property infringement has been continuously refined. Meanwhile, fields such as financial supervision and competition policy continue to align with advanced international standards, and related institutional reforms continue to deepen. These institutional innovations support and integrate with each other, driving the governance system to form an overall structure based on rules, guided by the rule of law, and centered on coordination.
In terms of governance capacity, institutional opening up promotes the professional upgrading of governance abilities, enhancing the governance efficacy of "good governance and effective action." The modernization of national governance capacity is essentially the use of institutions to improve the ability to respond to risks, provide public services, and allocate resources. Institutional opening up places higher demands on governance capacity, requiring not only proficiency in the operation of domestic institutions but also the ability to align with international rules, participate in rule-making, and resolve institutional differences. In terms of rule application, China actively participates in negotiations for free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), actively proposing Chinese solutions in emerging fields and continuously increasing its discourse power [4] in the formulation of global trade rules. In terms of resource allocation, China gives full play to the decisive role of the market in resource allocation while better playing the role of the government, accelerating the improvement of the institutional mechanism for market-based allocation of factors, effectively improving resource allocation efficiency. In terms of public services, "all-in-one online government services" and "cross-provincial services" are being comprehensively advanced, enhancing the convenience of public services. Regarding risk prevention and control, systems such as foreign investment security reviews and data export security assessments are being continuously improved, demonstrating China's governance capacity to build a security bottom line amidst deep opening up and to enhance opening capacity while ensuring security.
From the perspective of governance performance, institutional opening up transforms institutional advantages into developmental momentum, tangibly increasing the well-being of the people. The ultimate measure of national governance modernization is the people’s sense of gain, happiness, and security. Institutional opening up provides solid support for improving governance performance by optimizing the institutional environment, stimulating market vitality, and expanding developmental space. At the economic level, China's actual utilization of foreign capital has ranked among the top in the world for many years; in 2025, the actual utilization of foreign capital reached 747.69 billion RMB, of which 241.77 billion RMB was in high-tech industries. The "stable quantity and increased quality" of foreign capital is becoming an important force in promoting the optimization and upgrading of the industrial structure. In 2024, China's total trade in goods ranked first in the world for the eighth consecutive year, with emerging trade formats flourishing, highlighting China’s important position in global industrial and supply chains. In the area of people's livelihoods, institutional opening up has opened channels for the flow of cross-border goods and services at a deeper level by promoting rule alignment and institutional innovation. Simultaneously, the list of cross-border e-commerce retail imported goods has been continuously optimized and adjusted, allowing consumers to enjoy high-quality global goods and services without leaving the country, greatly satisfying the people's yearning for a better life. These tangible results fully demonstrate the profound practical significance of institutional opening up and national governance modernization, reflecting the fundamental goal of continuously improving people's well-being in the process of governance modernization.
II
Institutional opening up injects strong impetus into the modernization of national governance, but to achieve a deep integration and collaborative advancement of the two, it is still necessary to resolve problems such as insufficient rule connection in some areas, lack of institutional synergy, and inadequate adaptability of governance capacity. In the New Era and on the new journey, we must be guided by systemic thinking, plan holistically and advance steadily, transforming the practical achievements of institutional opening up into a continuous driving force for promoting the modernization of governance. Within a higher level of opening up, we must continuously improve the governance system and enhance governance efficacy.
Taking the proactive alignment with high-standard international economic and trade rules as the core, we must solidify the institutional foundation of institutional opening up. Rule alignment is the key lever for institutional opening up and an important path for optimizing the governance system. We must actively align with high-standard international economic and trade rules, focusing on core rules in free trade agreements such as the CPTPP and the Digital Economy Partnership Agreement (DEPA). We must accelerate institutional innovation and rule transformation in key areas such as market access, fair competition, intellectual property, digital trade, and green low-carbon development. We must further reduce the negative list for foreign investment access and promote the "entry is permitted unless prohibited" principle to take root. We must strengthen fair competition reviews and break down local protectionism and market fragmentation. We must strengthen the whole-chain protection of intellectual property rights and build an international first-class highland for intellectual property protection. We must improve the digital trade governance system, actively participate in the formulation of international rules for digital trade, deepen international cooperation in digital trade, accelerate the construction of a digital trust system, and strengthen security governance in the digital field, striving to enhance China's digital trade governance level. By proactively aligning with high-standard international economic and trade rules, we can promote the deep integration of the domestic institutional system with international high-standard rules, making institutional supply more inclusive and competitive, and laying a more solid foundation for achieving high-quality development.
Taking institutional system integration as the lever, we must enhance the collaborative efficacy of the governance system. The in-depth advancement of institutional opening up requires institutions in various fields to cooperate and work in synergy. We must establish and improve an overall coordination mechanism, break down departmental barriers and hierarchical divisions, and promote the systemic integration of institutional innovations in fields such as investment, trade, finance, and supervision. We must give play to the role of opening-up platforms such as Pilot Free Trade Zones and the Hainan Free Trade Port [5] as pioneers, replicating and promoting institutional innovation achievements from localized areas to the entire country, forming a pattern of institutional diffusion characterized by "breakthroughs at points, promotion across areas, and overall enhancement." We must establish a cross-departmental rule connection work mechanism, strengthen central-local synergy and linkage, clarify the division of powers and responsibilities, and form a collaborative and efficient institutional innovation force with upward and downward linkage. Through institutional system integration, we can enhance the integrity, synergy, and stability of the governance system, allowing institutional advantages to be fully released and promoting the continuous improvement and deepening of China’s governance system.
Taking the enhancement of governance capacity as the support, we must consolidate the implementation guarantee of institutional opening up. The modernization of governance capacity is key to the effective implementation of institutional opening up. We should focus on core capacities such as rule application, risk prevention and control, and public services to comprehensively enhance the construction of government governance capacity. We must strengthen the research and interpretation of high-standard international economic and trade rules, cultivate professional talent teams, and enhance our discourse power in participating in international rule-making and negotiations. We must establish and improve a risk monitoring and early warning system in the field of opening up, build a whole-chain risk prevention and control mechanism, and enhance risk disposal capabilities. We must deepen the "delegating power, improving regulation, and optimizing services" (fangguanfu) reform [6], promoting the standardization, normalization, and facilitation of government services, and building a "pro-business and clean" (qinqing) relationship between government and business. We must improve the diversified resolution mechanisms for international commercial disputes, integrating high-quality resources such as arbitration, mediation, and litigation to build a preferred destination for international commercial dispute resolution, continuously enhancing the soft power of institutional opening up.
Taking the coordination of development and security as the bottom line, we must build a security barrier for institutional opening up. Security is the prerequisite for development and the guarantee for the steady advancement of institutional opening up. We must adhere to systemic concepts and bottom-line thinking, firmly holding the bottom line of national security while expanding opening up. We must strengthen the protection of key core technologies and important industrial and supply chains, prevent foreign capital monopolies and malicious acquisitions, and maintain industrial and economic security. We must strengthen macro-prudential management of cross-border capital flows, improve the financial risk prevention and control system, and prevent and defuse systemic financial risks. We must establish a data classification and grading protection system, standardize cross-border data flows, and ensure that data is secure and controllable. By coordinating opening up and security, development and stability, we can achieve a benign interaction between institutional opening up and the modernization of national governance, ensuring that opening up moves steadily and far on the track of security and promoting the modernization of national governance to reach a new and higher level through opening up.