Yu Bin: A Political Economic Analysis of Chinese-style Modernization
General Secretary Xi Jinping pointed out in the report to the 20th National Congress of the Communist Party of China (CPC): "Chinese-path modernization is the socialist modernization led by the CPC. It shares common characteristics with the modernization of other countries, but more importantly, it possesses Chinese characteristics based on our own national conditions." He further noted: "From this day forward, the central task of the CPC will be to lead the Chinese people of all ethnic groups in a concerted effort to realize the Second Centenary Goal [1] of building China into a great modern socialist country in all respects and to advance the rejuvenation of the Chinese nation on all fronts through Chinese-path modernization." From this, we can see that there are actually two stages of Chinese-path modernization: one is the Chinese-path modernization of today or up to the present, which is a practical reality featuring both common international traits and Chinese characteristics; the other is the future Chinese-path modernization, through which we will comprehensively advance the rejuvenation of the Chinese nation. This article provides a political economy analysis only of the former stage of Chinese-path modernization, in hopes of providing inspiration that other countries can draw upon and highlighting the global significance of the Chinese path and the Chinese solution.
I. The Origins of Modernization
The Communist Manifesto points out: "The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilization. The cheap prices of its commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilization into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image." Here, the transition from pre-capitalist society to capitalist society—that is, "adopting the bourgeois mode of production"—represents the earliest form of modernization, which is effectively capitalization. This is the origin of modernization, and the reason for it is what Marx and Engels identified here as the desire to avoid "extinction." This is because the bourgeoisie cruelly oppresses the laborers of its own country; moreover, having shed feudal obligations, only a temporary wage-labor relationship exists between the capitalist and the worker. The bourgeoisie is even less concerned with the life or death of the worker than the feudal lord was with that of the serf. Workers not only labor for long hours but also receive meager incomes. As Marx revealed in Capital, in Belgium—that "paradise of capitalists"—wages had been reduced to the absolute minimum, such that "the slightest change in the price of the most necessary means of subsistence is followed by a change in the number of deaths and crimes!" Under these circumstances, capitalist states, for the benefit of their own bourgeoisie, do not hesitate to oppress or even destroy other nations and peoples. For these other nations and peoples, if they cannot use pre-capitalist modes of production to resist the capitalist mode of production, they have no choice but to follow the example of China at the end of the Qing Dynasty: "learn the superior techniques of the barbarians to control the barbarians" [2] and embark on the so-called road of modernization.
If the desire to avoid "extinction" is the subjective factor of modernization, the availability of material conditions is its objective factor. Engels once pointed out that the conditions for the existence of modern industry—steam power and machinery—could be created wherever there was fuel, particularly coal. Coal was found not only in England but also in other countries such as France, Belgium, Germany, America, and even Russia. The people of these countries did not see the benefit in reducing themselves to the status of starving Irish tenant farmers simply to allow English capitalists to acquire more wealth and glory. Thus, they set about manufacturing, not only for themselves but also for the rest of the world; as a result, the industrial monopoly held by England for nearly a century was irrevocably broken. What Engels elaborated here was how France, Belgium, Germany, the United States, and even Russia, following in England's footsteps, utilized their own material conditions to develop industrial steam power and machinery, thereby realizing their own capitalist modernization.
However, as capitalism developed, its internal contradictions intensified, leading to frequent economic crises and an urgent need to progress toward a higher stage. Using the historical materialism he founded, Marx scientifically analyzed the laws of motion governing capitalism's internal contradictions. By "criticizing the old world to find the new," he proposed the theory of scientific socialism, charting the path from capitalism to communism. From then on, modernization took on a socialist orientation. Advanced Russian intellectuals keenly grasped Marx's theory; they presented Marx with the question of a higher form of modernization—namely, whether Russia could, based on the cultural heritage left by the traditional agricultural commune, "without passing through the Caudine Forks [3] of the capitalist system, appropriate all its positive achievements" for the commune. The Russians raised a significant question: the distinction between modernization and capitalization. This meant uncoupling the link between the productive forces and the relations of production, allowing the productive forces created by the capitalist system to break free from capitalist relations of production and combine directly with more advanced socialist relations of production. Marx and Engels both provided affirmative theoretical answers to this question under certain conditions, while Lenin and Stalin provided affirmative answers through the practice of the Russian Revolution and Soviet socialist construction. Although problems later emerged in Soviet practice, one cannot deny the historical achievements of Lenin and Stalin on those grounds, just as one cannot deny the initial legitimacy of the Han, Tang, and Ming dynasties in ancient China despite their eventual collapses.
Since then, modernization has had two distinct and opposing models: the Western European capitalist model and the Soviet socialist model, although the Western European model varied from country to country.
II. The Modernization of Old China: "Losing at the Starting Line"
Modernization in modern China was forced; it was a modernization undertaken to avoid "extinction." Britain’s Opium War against China opened the door for Western powers to invade. These powers did not use "heavy artillery" in the sense of "cheap commodity prices," but actual heavy artillery of gunpowder and iron shot. To avoid the fate of the American Indians, China was forced to "learn the superior techniques of the barbarians to control the barbarians," beginning its exploration of capitalist modernization. Since China also possessed resources like coal and iron, meeting the material conditions for developing modern industrial steam power and machinery, it began to establish modern industry through the Westernization Movement [4]. However, the modernization of old China was destined to "lose at the starting line."
First, this was because the Qing government at the time attempted to combine the productive forces created by the capitalist system with the relations of production of a feudal society—the so-called "Chinese learning as the essence, Western learning for application" [5]. Although such a combination appeared or was realized in the early modernization of countries like Germany and Russia, the contradiction between advanced productive forces and backward relations of production forced the relations of production in those countries to evolve toward capitalism. Politically, this manifested as the activity of parliaments and political parties under the monarchies of Germany and Russia. Lenin once pointed out that Bismarck, representing the counter-revolutionary landowners of Germany, understood that they could only be saved (for several decades) by forming a solid alliance with the counter-revolutionary liberal bourgeoisie. However, the Qing government could not tolerate such changes in the relations of production or politics. They chose to rely on Western powers to save themselves, "utilizing China's material resources to win the favor of allied nations" [6]. Consequently, the Hundred Days' Reform [7] failed; the Qing government essentially abandoned the choice for modernization, leading to the prevalence of a comprador economy [8] dependent on foreign capital.
Second, once Western powers completed their own modernization, they began to exclude the modernization of other countries, especially as they transitioned from free-competition capitalism to monopoly-capitalism, i.e., imperialism. Proceeding from imperialist interests, Western powers wanted China to be a source of raw materials and a market for industrial goods—that is, a colony. Naturally, they sought to limit the development of China's modern industry and obstruct its modernization. Meanwhile, beyond trade plunder, Western powers never abandoned military plunder. Each time they launched a military invasion, they not only looted wealth directly during the war but also extorted war reparations. From the Treaty of Nanjing to the Boxer Protocol, there were at least eight major reparations, totaling 1 billion taels of silver. This massive loss of wealth left China's modernization without sufficient startup capital, making the process arduously difficult.
To push forward the process of capitalist modernization, people with lofty ideals like Sun Yat-sen launched the Xinhai Revolution [9],' overthrowing the Qing Dynasty—the last feudal dynasty in Chinese history. However, Japan supported Yuan Shikai's restoration of the monarchy on the condition of the "Twenty-One Demands" aimed at plundering China. Sun Yat-sen and others had to launch the Second Revolution to fight against Yuan, eventually shattering his dream of restoration. Yet, the Western powers were unwilling to see a peaceful rise for China; they soon began supporting domestic warlord conflicts, causing China’s manpower, material, and financial resources—the very potential for modernization—to be consumed in internecine warfare. Even so, they remained unsatisfied and continued to tacitly permit Japan's ambition to "destroy China within three months." Only when China persevered in the War of Resistance against Japanese Aggression, and when Western interests in China and Southeast Asia clashed with Japan's, did they turn to support China's resistance. By then, however, China's modern industry in places like the Northeast, Shanghai, Wuhan, and Shanxi had either been seized by Japan or forced to relocate inland. Production conditions weakened, scales plummeted, and inland cities suffered heavy losses from Japanese aerial bombardment. China's national strength was severely depleted. After the victory in the War of Resistance, the United States supported the Chiang Kai-shek government in continuing the civil war, coercing and bribing the Kuomintang (KMT) government into signing traitorous treaties to plunder the Chinese people alongside the "Four Big Families" [10]. They also forced the KMT to waive war reparations from Japan, continuing to block China's rise and modernization. It was not until the Chinese people, under the leadership of the CPC, defeated the Chiang Kai-shek regime, achieved victory in the New Democratic Revolution [11], and established the People’s Republic of China, that China's modernization truly "stood at the starting line." Since then, "on the basis of long-term exploration and practice since the founding of New China, especially since the start of reform and opening up, and following theoretical and practical innovations and breakthroughs since the 18th National Congress, our Party has successfully advanced and expanded Chinese-path modernization."
III. The Starting Line of Chinese-Path Modernization
The modernization of old China, which "lost at the starting line," demonstrated that the road of capitalist modernization was a dead end for China. Therefore, the modernization of New China embarked on the path of socialist modernization led by the CPC—the road of Chinese-path modernization. Chinese-path modernization began its run. However, having a foundation to start does not equate to being able to start quickly. Stalin once mentioned four methods of modernization's takeoff: "History records various methods of industrialization. The industrialization of Britain was achieved through decades and centuries of plundering colonies and accumulating 'additional' capital, which was then invested in domestic industry to accelerate the pace. This is one method. Germany accelerated its industrialization due to its victory in the Franco-Prussian War in the 1870s, extracting 5 billion francs in reparations from France and investing it in its own industry. This is the second method. Russia—old Russia—granted concessions under exploitative conditions and obtained loans under exploitative conditions, struggling to crawl along the road of industrialization. This is the third method... There is also a fourth road to industrialization: the road of developing industry through domestic savings, namely the road of socialist accumulation. Comrade Lenin repeatedly pointed out that this road is the only road for the industrialization of our country." In fact, the fourth road is primarily one of acceleration after the socialist modernization has started; taking it as the initial takeoff path results in a very slow start. After the October Revolution, Lenin on the one hand abolished the debts borrowed by old Russia, shedding the heavy burden of the starting phase; on the other hand, he strove to implement a policy of concessions to foreign interests under non-exploitative conditions to obtain the original capital for the modernization takeoff. However, this was opposed by the "White Guards" in exile and met with hostility from Western imperialist countries; combined with the capital shortage in Western countries themselves after World War I, the results were poor.
The reason modernization in old China "lost at the starting line" was precisely because it did not adopt—or was unable to adopt—the four aforementioned starting methods. Faced with the first and second methods, old China was the party being plundered; it was merely "bled out" and could not "replenish its blood." Old China also attempted the third method, going so far as to take on rather than abolish the foreign debts owed by the Qing government, but the financial resources obtained thereby were exhausted in civil wars and wars against foreign invasion. The fourth method was only possible for New China [12] to adopt. Meanwhile, New China, established under the leadership of the Communist Party of China by a peace-loving people who refused to endure humiliation, completely abandoned the first three paths. As General Secretary Xi Jinping has pointed out: "Chinese-path modernization is the modernization of taking the path of peaceful development. Our country does not follow the old path of some countries that realized modernization through war, colonization, and plunder. That old path, which benefited oneself at the expense of others and was filled with bloody crimes, brought deep suffering to the people of the vast number of developing countries. We stand firmly on the right side of history and on the side of human civilization and progress. Holding high the banner of peace, development, cooperation, and mutual benefit, we seek our own development while resolutely safeguarding world peace and development, and better maintain world peace and development through our own development."
Due to historical reasons, Chinese-path modernization acquired a new starting method: New China received internationalist assistance from a fellow socialist country, the Soviet Union, which possessed a higher level of modernization. The Soviet Union assisted in the construction of 156 key projects [13] in China. This was the largest aid program implemented by one country for another in human history, allowing Chinese-path modernization to sprint off the starting line. In 1954, Comrade Mao Zedong pointed out: "What can we make now? We can make tables and chairs, teacups and teapots; we can grow grain and grind it into flour; we can make paper. But we cannot make a single motor vehicle, plane, tank, or tractor." It was precisely with Soviet assistance that China rapidly acquired the ability to manufacture these items. In addition to gaining production capacity, China possessed vast industrial mineral resources due to its large territory and abundant products; in particular, it shed the label of being "oil-poor." This allowed China henceforth to possess the capacity for independence and self-reliance in following the fourth path of socialist accumulation, enabling it to accelerate even after the initial start of Chinese-path modernization. It is worth mentioning that the New Democratic Revolution [14] led by the CPC, like the Russian October Revolution, was a most thorough democratic revolution. It eliminated the landlord class and abolished private land ownership, which hindered the free flow of capital or factors of production, thereby clearing the greatest economic obstacle for Chinese-path modernization.
IV. The Acceleration of Chinese-path Modernization
After completing the "start" of modernization via socialist primitive accumulation [15] with Soviet aid, Chinese-path modernization began to follow the fourth path pointed out by Stalin: conducting socialist accumulation and striving to achieve the modernization goals proposed by the Party’s Eighth National Congress—namely, "to provide China with powerful modern industry, modern agriculture, modern transport and communications, and modern national defense." To this end, New China practiced extreme frugality. On one hand, because there were no landlords or capitalists, the portion of surplus labor beyond necessary labor could be used entirely for accumulation. On the other hand, the Chinese people were hardworking and thrifty; necessary labor—what Western countries call labor costs—was relatively low, which enabled the Chinese people to struggle arduously over a long period. Consequently, the accumulation rate in New China was very high, the growth of the means of production was prioritized, and heavy industry developed rapidly.
Although the production of consumer goods was also growing at this time, New China's population grew very quickly, so the improvement in each person's standard of living remained quite limited. In terms of domestic consumption, levels were only slightly higher than the general level of old China and had not yet reached the general level of the petty bourgeoisie in the old society; the superiority of socialism was not yet sufficiently obvious. In particular, the "Great Leap Forward" [16] was launched during this period in an attempt to accelerate development while divorced from reality, plunging the national economy into a serious and difficult situation. This necessitated a comprehensive adjustment, which to a certain extent dampened the enthusiasm of the masses for building socialism. At that time, compared with capitalist countries, the domestic production of new types of consumer goods such as household appliances was visibly insufficient. This led some people, at the start of Reform and Opening-up, to question the superiority of socialism and turn toward "worshipping things foreign and fawning on the outside world" (崇洋媚外). In reality, this was a critique of a petty-bourgeois nature. On the one hand, Chinese-path modernization is a modernization of a huge population size developed on a basis of being "poor and blank" [17]. Even with Soviet assistance, its arduousness and complexity were unprecedented, requiring a great deal of foundational work that could not yield immediate results. On the other hand, China at that time had implemented public ownership of the means of production; those with a petty-bourgeois ideology saw only what was held in individual hands, failing to see what was held in common or the non-material wealth such as the improvement of cultural levels. Conversely, General Secretary Xi Jinping saw something more profound, proposing that "the historical period after reform and opening-up cannot be used to negate the historical period before reform and opening-up." [18]
After more than 20 years of construction in New China, although the country's economic landscape had greatly improved, two issues emerged. First, there was a surplus of capacity in China's basic industries; second, the production of consumer goods was relatively insufficient. This imbalance between the production of producer goods and consumer goods briefly led the economy into difficulties. Furthermore, although New China had invested heavily in agricultural infrastructure such as reservoirs and terraces, agricultural production efficiency remained low, and the agricultural population still accounted for the majority of the population. Therefore, despite having a complete range of industrial sectors, New China remained a primarily agricultural country. To address this, New China introduced foreign technology, increased the production of agricultural supplies such as chemical fertilizers, and focused on researching and developing high-yield crop varieties. It was only after breakthroughs in technologies such as high-yield hybrid rice that agricultural products became abundant and the problem of food and clothing for the people was thoroughly resolved. The improvement in agricultural efficiency created a large surplus of labor in rural areas that could shift to industrial sectors. Simultaneously, as educated youth who had been "sent down to the countryside" [19] returned to the cities, a large amount of surplus labor also appeared in urban areas. At this juncture, with the improvement of Sino-US relations, the world market began to open to China. Chinese-path modernization encountered the opportunity for "take-off," and China firmly grasped this opportunity through Reform and Opening-up.
When China began Reform and Opening-up, world capitalism was transitioning from the imperialist stage to the neo-imperialist stage. Capital, especially large capital, began to detach from the production process and turn toward extracting interests through financial, political, and legal means—such as intellectual property rights. Coupled with the stagflation occurring in Western capitalist economies caused by the law of the tendency of the rate of profit to fall [20] as revealed by Marx, productive capital in capitalist countries began a large-scale industrial transfer to developing countries. The industrial foundation and transportation conditions developed by New China, as well as the high-quality surplus labor pool created through New China’s literacy campaigns and universal education—and especially the very low costs of land acquisition and housing demolition for industrial and road construction—made China the most suitable and highest-profit region to receive this industrial transfer. Furthermore, China's high tariff levels at the time made direct production in China more profitable than exporting to China. Consequently, China was able to attract a large amount of foreign investment, creating a new situation that differed both from the four paths described by Stalin and from China's earlier acquisition of Soviet aid. During this time, the United States used neo-imperialist means to force Japan to sign the Plaza Accord, causing a sharp appreciation of the yen. This made it more advantageous for Japanese companies to invest and produce overseas, particularly in China, further promoting China’s work in attracting foreign investment. The introduction of large amounts of foreign capital allowed China to rapidly complete (or supplement) new capital accumulation and adjust its industrial structure; Chinese-path modernization began to accelerate.
Although the Chinese government implemented policies to introduce foreign capital and support domestic capital, it remained committed to the principle of public ownership as the mainstay, thereby maintaining strong regulatory control over domestic economic development. Thus, when neo-imperialism provoked economic crises in developing countries—such as those in Southeast Asia and East Asia—to reap financial profits, the Chinese economy remained stable, and Chinese-path modernization was able to develop even more rapidly.
V. The Soaring Flight of Chinese-path Modernization
As socialism with Chinese characteristics entered the New Era, Chinese-path modernization entered a stage of "soaring flight." Although China’s economic growth rate has shifted from high-speed to medium-to-high-speed growth, this is merely a sign that the scale of the Chinese economy has undergone a qualitative change and leaped to a new level. As General Secretary Xi Jinping described it: "It is like a person; between the ages of 10 and 18, they grow rapidly in height, but after 18, the speed of growth slows down." In fact, since entering the New Era, "all 832 impoverished counties have been removed from the poverty list, nearly 100 million rural poor have been lifted out of poverty, and more than 9.6 million impoverished people have been relocated from inhospitable areas, historically resolving the problem of absolute poverty." Furthermore, "GDP has grown from 54 trillion yuan to 114 trillion yuan, accounting for 18.5 percent of the world economy—an increase of 7.2 percentage points—solidly maintaining the position of the world's second-largest economy. Per capita GDP has increased from 39,800 yuan to 81,000 yuan. Total grain output ranks first in the world, effectively ensuring the food and energy security of more than 1.4 billion people. The urbanization rate has increased by 11.6 percentage points, reaching 64.7 percent."
After Reform and Opening-up, we participated in the global division of labor mainly based on comparative advantages, achieving rapid economic development and becoming the country with the most complete industrial sectors in the world. However, "bottleneck" (卡脖子) [21] problems also appeared in some key core fields. Yet, developing the productive forces means achieving independent controllability, and modernization means breaking monopolies. Marx explicitly pointed out: "Just as everything has become a monopoly, there are also, in our time, some branches of industry which dominate all others and secure to the nations which most largely carry them on the command of the world market." Currently, the United States uses its dominance in the chip manufacturing sector over other industrial sectors to suppress and restrict the Chinese economy, attempting to intervene in China's development from its "position of strength" as a monopolist. Clearly, for China to move closer to the center of the world stage and achieve the great rejuvenation of the Chinese nation, it must enter the industrial sectors that dominate all others through modernization, break the US monopoly on the world market, and complete the task of building a modern socialist country in all respects. To this end, General Secretary Xi Jinping has proposed making innovation the primary driver of development. Targeting the past concept that "it is better to buy than to build, and better to rent than to buy," he pointed out that "this logic must be reversed." This means that Chinese-path modernization must shift from being factor-driven and investment-driven to being innovation-driven. As "we have proposed and implemented the New Development Philosophy, focused on promoting high-quality development, promoted the construction of a new development pattern, implemented supply-side structural reform, and formulated a series of major regional strategies of global significance, our country's economic strength has achieved a historic leap." At the same time, basic research and original innovation have been continuously strengthened, breakthroughs have been made in some key core technologies, and China has entered the ranks of innovative countries.
Marx pointed out: "Labor of exceptionally high productive power acts as intensified labor; it creates in equal periods of time greater values than average social labor of the same kind." Innovation is the main way to realize labor of "exceptionally high productive power." At the same time, the level of productive forces is also determined by the quantity of use-values produced within the same value creation. Therefore, the exceptionally high productive labor brought by innovation can not only create more value in the same amount of time but also create more or better use-values. While accelerating the accumulation of factors of production faster, better, and more cheaply, it can more fully or with higher quality meet the people’s needs for a better life at lower costs. It is precisely because China has entered the ranks of innovative countries that Chinese-path modernization has ushered in the soaring flight of realizing socialist modernization better and faster. This gives us more confidence to complete the strategic task of "building a great modern socialist country in all respects and achieving the Second Centenary Goal" [22] by the middle of this century on schedule and with high quality, welcoming the great rejuvenation of the Chinese nation and the realization of common prosperity for all people.
VI. The Revelations of Chinese-path Modernization
Although the problems of each nation must be addressed from the perspective of their own fundamental national conditions and answered by their own people, and although Chinese-path modernization is closely linked to China's national conditions and unique historical opportunities, Chinese-path modernization nevertheless provides a new choice for humanity to achieve modernization. It still possesses a certain world-historical significance and can offer insights for other countries that have not yet achieved modernization or possess a low degree of modernization in completing their developmental tasks. The trajectory of Chinese-path modernization demonstrates that to achieve modernization, the first and most essential requirement is a strong core of leadership like the Communist Party of China, which fears no hardship or obstacle, dares to break monopolies, and leads the people in modernization construction.
Second, one cannot lose at the starting line. This requires attaining national and ethnic independence, abolishing all unequal treaties [23], and avoiding becoming a vassal of Western imperialist countries in order to carry out modernization autonomously. It also requires possessing a powerful and unified [24] national defense force to avoid or resist foreign armed intervention.
Third, it is necessary to thoroughly complete the democratic revolution to eliminate the landlord class, remove the obstacles formed by private land ownership to the flow of capital or factors of production, and abolish feudal relations of personal dependence, thereby enabling the labor force to freely enter modern industrial sectors. Generally speaking, to achieve the second and third points, one must possess the first condition—namely, a strong core of leadership.
Fourth, the masses of the people must be allowed to share in the achievements of modernization construction. In this way, the masses will support modernization and be willing to struggle for its realization, rather than resisting technological progress due to a fear of unemployment—as seen among labor unions and workers in some Western countries—which hinders a nation’s modernized development.
Fifth, it is necessary to raise the funds for the primitive accumulation required to start modernization. In this regard, the insight from the experience of Chinese-path modernization is to absorb foreign investment under conditions of equality and freedom from enslavement. At the same time, it is necessary to practice strict economy, giving priority to utilizing limited funds for the development of production. Currently, the "Belt and Road" [25] has become a widely welcomed international public good and platform for international cooperation. All countries can fully utilize this platform to integrate into the world market and expand foreign exchange under the premise of equality and mutual benefit.
Sixth, one must persist in placing the focus of economic development on the real economy. After the start of modernization, priority should be given to developing the production of the means of production and possessing the capacity to independently manufacture industrial equipment.
Seventh, priority must be given to the development of education. On one hand, this provides high-quality laborers for modernization construction; on the other hand, it provides researchers and developers with innovative capabilities, thereby breaking the technological monopolies of certain individual countries.
Eighth, the productive efficiency of agriculture must be improved, or other efficiently produced products must be used to exchange for large quantities of cheap agricultural products, thereby reducing necessary labor and increasing accumulation.
Ninth, infrastructure construction must be vigorously developed, especially the improvement of transportation conditions, to shorten circulation time. "If you want to get rich, build a road first" [26] is also a successful experience of Chinese-path modernization.
Tenth, good use must be made of both domestic and international resources to provide the necessary raw materials for modernization construction.
Finally, the historical experience of Chinese-path modernization also shows that in the initial stages of economic development, appropriate high tariffs on industrial goods are necessary. However, it must be clear that these high tariffs are not intended to protect weak domestic modern industries—it is not the type of import substitution once attempted by some developing countries—but rather to attract advanced foreign industries to invest in domestic production and carry out industrial transfer. Under these circumstances, domestic and foreign enterprises compete on equal footing within the nation’s tariff barriers. This can better stimulate domestic enterprises to accelerate their modernized development so that even if tariffs are reduced in the future, domestic enterprises will possess international competitiveness.