China's Economy: The Open Road to Development

Sun Weidong

2019 marked the 70th anniversary of the founding of the People's Republic of China. Over the past 70 years, China has made amazing achievements in economic development and become the world's second-largest economy.

Its experience in maintaining high economic growth has been to persist in opening up. The historic decision of reform and opening up in 1978 started this process. In the past 40 years, China has pursued development with doors wide open, and made an impressive transition from being a largely closed society to one that's open to the world in all respects. Opening up has greatly unleashed China's productive forces, facilitated the free flow and efficient allocation of factors and resources at home and abroad, promoted China's active integration into the global value chain, and pushed sustained and rapid economic development.

During this period, China's GDP has grown at an average annual rate of about 9.5%, and its foreign trade at 14.5%. The actual foreign capital utilisation is more than $2 trillion, with outbound direct investment growing more than 40 times. All the while, it has been deeply integrated into the global production and value chain system.

China is not only the world's second largest economy, but also the largest industrial country, the largest foreign exchange reserve country, and the largest contributor to global economic growth. Meantime, China has also explored a new path for the development of late-developing countries.

Openness brings progress, and is an indispensable impetus for emerging economies. China's achievements in the last 40-odd years have confirmed this point, as have the development paths of some other Asian economies. Openness is also a prerequisite for international economic and trade cooperation.

China and India have huge markets, complementary industrial structures, rapid economic development and broad prospects for cooperation. To promote bilateral trade and investment, maintaining balanced development of economic and trade cooperation is the right choice for both sides, and serves common interests.

Opening up, however, may also bring many challenges. The Chinese response has been to stay positive, gain correct understanding, dare to reform and turn crisis into opportunity. Over the past four decades, especially after China's accession to the WTO in 2001, some domestic industries have suffered considerably. However, by accelerating domestic reforms, improving the business environment and adjusting the industrial structure, China's domestic industries have not only survived but have also become more competitive globally.

Globalisation is an irreversible trend. Countries should seize the opportunity, follow the trend, actively participate in bilateral and multilateral trade arrangements, and integrate into the international value chain. One should learn to swim while swimming, and ride the tides in the vast ocean of the world markets. Only after going through storms can we improve our international competitiveness.

China's high-quality development can only be carried out under more open conditions. President Xi Jinping has repeatedly stressed that ‘China's door to openness will not be closed, it will only open wider'. Today, China continues to accelerate this pace, substantially easing market access, fully liberalising manufacturing, and creating a more attractive investment environment. The country welcomes companies from all over the world to actively explore the booming Chinese market, and call on all countries to continue opening up their own markets.

Of late, though, unilateralism and protectionism have been on the rise, and multilateralism seriously impacted. As the world economy undergoes profound adjustments and changes, only by continuing to open up can countries benefit each other, achieve common prosperity and maintain sustainable development.

China's development is inseparable from the world, and the world needs China for continued prosperity. It is firmly committed to openness, inclusiveness and mutual benefit, and firmly upholds the multilateral trading system, oppose protectionism of all forms, promote global trade and investment liberalisation and facilitation, promote regional economic integration, and advocate an open world economy.

Openness is not only an idea, but also an action. It is reflected not only in ordinary but also in difficult times. At present, the Chinese government and people are making all-out efforts to combat the novel coronavirus (nCoV), and have taken comprehensive and rigorous prevention and control measures. As a responsible country, China's efforts are not only protecting the health of its own people, but also that of the people of the world, including India. The epidemic will eventually end, and China's positive economic trend will not change. It is important to take a long-term perspective. Countries should follow WHO recommendations, stay calm, strengthen cooperation, and keep imports and exports open. We should also resume and maintain trade and the movement of people, creating favourable conditions for greater openness and broader cooperation.