China Will Continue to Open Up

Increased Opening-up Impetus

First of all, China has become part of the global economy. It would be impossible, therefore, for the country to break its economic relations with the world and retreat to the domestic market. Forty years of reform and opening-up have seen China’s economy continuously integrate in the world economy.

Since the global financial crisis of 2008, China has been strengthening economic cooperation with the world in spite of an unfavorable trade and investment environment. The pace of the “going global” of Chinese enterprises, people, and capital did not slow down. More than 20,000 Chinese enterprises invest overseas, and more than 100 million Chinese citizens go abroad every year. In 2015, China’s Overseas Direct Investment (ODI) hit a new high of US $145.67 billion with an annual growth of 18.3 percent. The proportion of China’s ODI in global ODI increased from 0.4 percent in 2002 to 9.9 percent that year, ranking a world second for the first time.

Against such a backdrop, China’s domestic economy would suffer from severing its ties with overseas interests, and its capital and people abroad would sustain a great loss. As China continues to open up to the world, China’s open economy, epitomized by the Belt and Road Initiative, develops, too.

To date, more than 100 nations and international organizations have expressed their support for the initiative and their willingness to join, and more than 40 cooperation agreements have been signed. This demonstrates the steady pace of opening-up of the Chinese economy.

Second, the economic interdependence between China and the world is too strong to sever. At the start of reform and opening-up, it was mostly reflected at the lower end of the industrial chain. In other words, the world needed cheap labor from China, and China needed the world’s orders, technology, and management experience. If at that time China had separated its economy from the world, the world would have lost access to cheap, high quality clothes, shoes, and toys, and Chinese workers, especially rural migrants, would have lost their jobs.

Today, China’s economic relations with the world take on a new look due to upgrading of the industrial chain, but the ties are still too close to disconnect. Since 2015, mechanical and electrical products have made up half of China’s exports, with a focus on large single unit and complete sets of equipment. China is also highly competitive in high-speed rail and nuclear power products as well as railroads, vessels, aerospace industry and other transportation equipment industries.

Though the form of economic relations is changing, the interdependence between China and the world is strong. With the upgrading of the world’s economy and the change in economic content, China’s economic relations with the world might spread to areas like currency and finance, and intellectual products, but the fundamental interdependence of China and the world will not change.

Chinese culture is a third driving force for opening-up. The cradle of Chinese culture lay in the vast and flat arable lands where towns and villages had no clear borders, and people had close links. In contrast, Western culture was formed in “mosaic” areas, like coasts, mountains, and forests where cities and villages were discrete and links between people loose. Thus, the notions of nationalism and sovereignty first appeared in Europe, and China was “forced” to accept these notions only after the infiltration of Western guns and capital.

The most fundamental aspect of Chinese culture remains the concept that “the world is one.” Therefore, China accepts globalization not only because of material interests but also because of the intrinsic belief that all human beings should unite.

Chinese President Xi Jinping has advocated building a community of shared destiny, called for an open world economy at the G20 Hangzhou Summit, and re-emphasized the policy of opening-up at the recent Central Economic Work Conference. These proposals are not mere expediency, but absolute economic needs, and rooted in Chinese culture. Therefore, we can say that China’s opening-up is fundamental and lasting.