Long Guoqiang: Deeply Understanding that Opening Up is a Distinctive Hallmark of Chinese Modernization
General Secretary Xi Jinping has pointed out: "China's door to the world will only open wider and wider." The Resolution of the Third Plenary Session of the 20th Central Committee of the CPC proposed that "Opening up is a defining feature of Chinese-path modernization." We must accurately understand the profound connotations of this major thesis, consistently adhere to the basic national policy of opening up, promote high-quality development and the building of a community with a shared future for humanity through high-level opening up, and comprehensively advance the great rejuvenation of the Chinese nation through Chinese-path modernization.
Opening Up is the Only Path to National Prosperity and Development
Only through opening up can one move toward prosperity; closure inevitably leads to backwardness. Since the Great Geographical Discoveries, and especially following World War II, economic globalization has continuously deepened, providing unprecedented strategic opportunities for the open development of all countries. The history of the evolving international landscape over several centuries demonstrates that every country that has successfully achieved modernization is an economy that adopted an open development strategy. In the 40-plus years of China's reform and opening up, we have created the "two miracles" of rapid economic development and long-term social stability. Practice has proven that reform and opening up is an essential "magic weapon" [1] for contemporary China to catch up with the times in great strides.
Opening up is the proactive choice of our Party. After the start of reform and opening up, our Party established opening up as a basic national policy, making full use of both international and domestic markets and resources. China achieved a historic transformation from being closed or semi-closed to all-around opening up. In the New Era, General Secretary Xi Jinping has emphasized: "Reform will not pause, and opening up will not stop." We have implemented a more proactive opening-up strategy, constructed a network of high-standard free trade zones facing the world, and accelerated the construction of Pilot Free Trade Zones and the Hainan Free Trade Port. The joint construction of the "Belt and Road" has become a widely welcomed international public good and platform for international cooperation, forming a pattern of opening up that covers more areas, involves broader fields, and reaches deeper levels. Currently, China is in a critical period of comprehensively advancing the great cause of building a strong country and national rejuvenation through Chinese-path modernization. We must conform to economic globalization and use opening up to promote reform, development, and innovation.
An inevitable requirement for leveraging strengths, compensating for weaknesses, and fully unleashing the potential for national economic development. Every country has different natural endowments, with its own "long boards" (strengths) and "short boards" (weaknesses). Developing an economy in a state of closure is, as "Barrel Theory" [2] reveals, limited by the short boards which determine the scale of economic development, while the long boards cannot be fully utilized. Developing an economy under open conditions allows for the export of high-quality products with comparative advantages to the world market in exchange for scarce resource elements. This "lengthens" the short boards and expands the frontier of economic development possibilities. Looking across the world, most countries utilize the international market to conduct exchanges based on comparative advantage to leverage strengths and compensate for weaknesses.
China is rich in total resources, but its per capita resources are insufficient; per capita levels of energy and resources such as oil, natural gas, iron ore, and arable land are generally far below the world average. At the same time, China possesses abundant labor resources. Since reform and opening up began, China has proceeded from its own characteristics, established the basic national policy of opening up, and adopted policies such as absorbing foreign direct investment, encouraging exports to earn foreign exchange, and vigorously developing processing trade. We attracted and undertook a large amount of transnational transfers of labor-intensive processing and assembly industries. By utilizing the "long board" advantage of abundant labor resources, we obtained scarce capital, technology, and resources/energy in return. We have carved out a path to industrialization by participating in the global division of labor against the backdrop of economic globalization, driving rapid economic development. Currently, as the world undergoes changes unseen in a century at an accelerated pace, we must base ourselves on the new stage of development, lead reform with the new development philosophy, continuously improve the level of opening up, participate more deeply in the international division of labor and cooperation, and promote the effective improvement of economic quality and reasonable growth in quantity, thereby injecting steady momentum into Chinese-path modernization.
An inevitable requirement for deepening the division of labor and improving economic efficiency. Classical international trade theory points out that by deepening the international division of labor and engaging in international trade, countries can concentrate resources in sectors and industrial activities where they have a relative advantage, thereby improving their own economic efficiency. With the in-depth development of economic globalization, the international division of labor has deepened from the previous inter-industry division to intra-industry and even intra-product division, forming global industrial chains, supply chains, and value chains. Through opening up, China entered the global industrial chain via the processing and assembly of labor-intensive products, becoming a participant, beneficiary, and contributor to economic globalization, and gradually becoming a major hub-node country in the global production network.
As the level of development rises, China's comparative advantages in participating in the global division of labor have shifted from low-cost factor advantages in labor and land to advantages in human resources, industrial systems, and economies of scale. We are also accelerating the formation of advantages in technological innovation and the institutional environment. To this end, we must continuously improve the level of opening up, give full play to new comparative advantages, accelerate the elevation of China's position in the global value chain, continuously improve economic efficiency and per capita income levels, promote high-quality development, and fortify the material and technical foundation of Chinese-path modernization.
An inevitable requirement for grasping strategic opportunities and developing new quality productive forces. Historical experience shows that major scientific and technological innovations and industrial transformations are important forces driving the adjustment of the international landscape. Closure may lead to missing the opportunities of a technological revolution, resulting in a backward position where one "is targeted for being vulnerable." [3] In history, China once missed the opportunity of the Industrial Revolution due to its policy of "closing the country to international contact" (biguan suoguo), falling from a leader in the era of agricultural civilization to a laggard in the era of industrial civilization—a profound lesson indeed. Currently, human society faces major opportunities brought by a new round of technological revolution and industrial transformation represented by information technology. At the same time, China is working with other countries to jointly respond to various challenges and global issues such as climate change, which contains strategic opportunities for a comprehensive green and low-carbon transition in energy and industry. Only by enhancing our awareness of potential dangers, remaining modest and open-minded, and persisting in opening up can we keep pace with the frontiers of the new round of technological revolution and industrial transformation. This will allow us to give full play to the advantages China has already achieved in the digital and green economies, continuously develop new quality productive forces, open up new tracks for international competition, win new advantages in international competition, and create a new situation for Chinese-path modernization.
Promoting High-Quality Development Through High-Level Opening Up
The Resolution of the Third Plenary Session of the 20th Central Committee of the CPC stated: "High-quality development is the primary task in building a modern socialist country in all respects." Closely following the theme of advancing Chinese-path modernization and focusing on the primary task of high-quality development, the Resolution made a series of strategic deployments for improving the systems and mechanisms for high-level opening up. To implement these strategic deployments, we must persist in using opening up to promote reform, build a new system for a higher-level open economy, create a first-class business environment, and attract the accelerated convergence of high-end elements. We must persist in combining "bringing in" (investment) with "going global," promote the mutual reinforcement of trade and investment, facilitate the virtuous interaction between the domestic and international "dual circulation," and promote high-quality development through high-level opening up.
Steadily advancing institutional opening up and improving the quality and level of two-way investment. To promote high-quality development, we must both base ourselves on our own conditions and make good use of external resources. China possesses many favorable conditions for attracting international resources, such as a super-scale market, sophisticated infrastructure, a complete industrial system, abundant human resources, and ever-increasing innovation capabilities. By creating a first-class institutional and business environment, we can multiply the attractiveness of these favorable conditions for international resources. The Resolution proposed proactively aligning with high-standard international economic and trade rules, creating a transparent, stable, and predictable institutional environment, and fostering a market-oriented, law-based, and internationalized first-class business environment. By attracting high-end industrial activities such as R&D, regional headquarters, high-end manufacturing, and professional services—and by organically combining the "attraction of investment" with the "attraction of intelligence" and "attraction of talent"—we will persist in open innovation, expand international scientific and technological exchanges and cooperation, and attract various innovation elements to accelerate their convergence in China, thereby enhancing our capacity for innovative development.
At the same time, Chinese enterprises are in an important period of conducting international operations through outward investment. We must organically combine the "going out" (overseas expansion) of enterprises with the promotion of high-quality development, supporting enterprises in better utilizing global resources to enhance their innovation capabilities. Over the years, many Chinese-funded enterprises have utilized external innovation resources through establishing overseas R&D centers, overseas mergers and acquisitions, and international cooperation, greatly enhancing their innovation capabilities and international competitiveness. The Resolution proposed improving the systems and mechanisms for promoting and protecting outward investment, perfecting the management and service systems for outward investment, and promoting international cooperation in industrial and supply chains. This will provide a better institutional environment for Chinese enterprises to integrate and utilize international resources to promote high-quality development.
Deepening the reform of the foreign trade system and accelerating the construction of a "trade power" status. Currently, China has become a major country in international trade, but the problem of being "large but not strong" still exists. For example, while the export volume of goods has ranked first in the world for many years, the position of exported products in the global value chain still needs to be raised; service trade has been in a deficit for a long time, and the international competitiveness of the service industry urgently needs to be strengthened. Currently, international trade is showing trends toward digitalization, greening, and "servitization," providing strategic opportunities for China to build itself into a trade power. To seize these opportunities, the Resolution proposed deepening the reform of the foreign trade system and building a system of institutional and policy support for a trade power.
To implement these strategic deployments: First, we must accelerate the reform for the integration of domestic and foreign trade, strengthen the synergy between trade policies and fiscal, tax, financial, and industrial policies, enhance innovation capabilities, and shift competitive advantages from cost-based advantages toward those based on technology, brand, quality, and service, thereby vigorously upgrading trade in goods. Simultaneously, we should organically combine the international layout of enterprises with the creation of trade networks, vigorously develop trade in intermediate goods, and enhance the competitiveness of intermediate goods exports. Second, we must fully implement the negative list for cross-border trade in services, taking the comprehensive pilot demonstrations for expanding the opening of the service industry as a driver. We should improve the levels of liberalization and facilitation for trade in services, and encourage China's service industry—especially producer services and technology-intensive services—to improve their international service capabilities and innovate the upgrading of trade in services. Third, we must advance the construction of comprehensive pilot zones for cross-border e-commerce, encourage e-commerce platform enterprises to operate globally, enhance the international competitiveness of digital trade enterprises, establish efficient, convenient, and secure mechanisms for cross-border data flows, and innovate the development of digital trade.
Enhancing the synergy between domestic and international dynamics and accelerating the construction of the New Development Pattern. Accelerating the construction of the New Development Pattern is a strategic layout made by coordinating the two overall situations of domestic and international affairs, and the two major issues of development and security. The key to constructing the New Development Pattern is ensuring the unhindered flow of the economic cycle. Following the deployments of the Resolution, we must improve the circulation system, deepen the reform of the financial system, and perfect the systems for enhancing the resilience and security levels of industrial and supply chains. This will ensure that the circulation of the logistics system, financial system, and industrial/supply chains remains smooth, strengthening the endogenous power and reliability of the domestic macro-cycle.
A crucial component of building the New Development Pattern is the linkage and mutual promotion between domestic and international dynamics. We must implement the deployments of the Resolution regarding the optimization of the regional opening-up layout. Relying on the advantages of China's super-scale domestic market, we should use the domestic macro-cycle to attract global resources and elements, improve the quality and level of the international cycle, and enhance the linkage effect between domestic and international markets and resources. Security is the prerequisite for development, and development is the guarantee of security. To promote high-quality development through high-level opening up, we must correctly handle the relationship between development and security, firmly grasp the initiative of development, and ensure resource security, food security, industrial security, financial security, and data security in the process of open development.
Promoting the Construction of a Community with a Shared Future for Humanity Through High-Level Opening Up
The Resolution of the Third Plenary Session of the 20th Central Committee of the CPC stated that continuing to push reform forward is "an inevitable requirement for promoting the construction of a community with a shared future for humanity and winning the strategic initiative amidst the accelerating changes unseen in a century." The Communist Party of China is a party that seeks happiness for the Chinese people and rejuvenation for the Chinese nation; it is also a party that seeks progress for mankind and the "Great Harmony" (datong) [4] for the world. Promoting the construction of a community with a shared future for humanity will create a better international environment for advancing Chinese-path modernization and is also the goal of pursuing Great Harmony for the world. Advancing high-level opening up is conducive to making full use of both domestic and international markets and resources to advance the cause of modernization, and is conducive to promoting the construction of a community with a shared future for humanity, achieving win-win cooperation between China and all countries in the world.
Providing new opportunities for the world through Chinese-path modernization. The Resolution proposed:
"Chinese-path modernization is the modernization of following the path of peaceful development." We must adhere to the fundamental state policy of opening up to the outside world, resolutely pursue a win-win strategy of mutual benefit, and work hand-in-hand with all countries to promote the liberalization and facilitation of trade and investment. We must build an open world economy, allowing all nations to share in the development opportunities brought by Chinese-path modernization. We shall implement the Global Development Initiative, the Global Security Initiative, and the Global Civilization Initiative [5], opposing protectionism, unilateralism, and "decoupling and severing supply chains" [6]. We will promote the high-quality joint construction of the "Belt and Road," increasing the intensity of building the "Scientific and Technological Belt and Road," the "Digital Belt and Road," and the "Green Belt and Road." We will steadily advance "Dual Carbon" [7] work, firmly grasping the strategic opportunities brought by the comprehensive green transformation of economic and social development, and vigorously developing green and low-carbon technologies and industries to contribute to the global green and low-carbon transition.
We must promote the development of the global governance system in a direction that is more just and reasonable. In accordance with the deployment and requirements regarding "participating in and leading the reform and construction of the global governance system" set forth in the Decision of the Third Plenary Session of the 20th CPC Central Committee [8], we must actively participate in the reform of the World Trade Organization (WTO) and resolutely maintain and continuously promote a more complete and effective multilateral trading system with the WTO at its core. We should actively participate in the formulation of rules in new areas of international trade and economy, such as digitalization and greening, and actively contribute Chinese wisdom. We will proactively align with the high-standard economic and trade rules of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA), expand the network of high-standard free trade zones oriented toward the globe, and optimize the environment for open cooperation.
We must consolidate the cultural and people-to-people foundations of a community with a shared future for humanity. Building a community with a shared future for humanity requires the sharing of interests, the joint construction of rules, and the integration of sentiments. The Decision of the Third Plenary Session of the 20th CPC Central Committee proposed expanding international cultural and people-to-people exchanges and cooperation. Facing a complex and severe international environment, we must be able to withstand the storm; we must be confident but not complacent, self-reliant but not arrogant, and consistently remain modest and prudent, free from arrogance and rashness, and continue our arduous struggle [9]. Facing the "great power game," we must discard illusions, create a favorable external environment through both struggle and cooperation, and attach greater importance to people-to-people exchanges. We must consciously fulfill the responsibilities of a major power, persist in peace, development, cooperation, and win-win results, further hold high the banner of a community with a shared future for humanity, and make new contributions to the cause of human progress. We must adhere to the principle of "appreciating the beauty of others as one's own" [10], promoting mutual respect, equal treatment, and mutual learning among all nations, and always humbly learn from and borrow all the outstanding achievements of human civilization. At the same time, we must improve our capacity for international communication, coordination, and dissemination, telling China's story well and sharing China's experience.
(The author is the Deputy Director of the Development Research Center of the State Council)
Web Editor: Ma Jingren Source: People's Daily, October 24, 2024