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Zhou Shijian (China Opening)

Mar 28, 2018
  • Zhou Shijian

    Senior Fellow, Tsinghua Center for US-China Relations

Four decades of reform and opening up has brought earth-shaking changes to China, lifting the country from a state of stark poverty to that of initial prosperity. In 1978, China’s economy was valued at only ¥367.8 billion, ranking 10th worldwide; by 2017, it had grown to ¥82.71 trillion, having taken Japan’s place as the world's second largest economy in 2010. The proportion of the Chinese economy in the global total has also risen from 2% to 15%. Chinese per capita GDP grew from $280 in 1980 to $8,813 in 2017. Today's China would not exist had there not been reform and opening up.

Attracting overseas capital has been an important part of reform and opening up. It has not only attracted funds from overseas, but also introduced advanced technologies and management know-how, boosting employment and tax revenues, and greatly facilitated Chinese commodity exports. From 1979 to 2017, the country brought in $2,011 billion in overseas investments. Overseas-funded firms have become an important component of the Chinese national economy. In recent years some Western media outlets have disseminated rumors that China no longer welcomes overseas investments, or that China is expelling foreign investments, which is obviously inconsistent with the facts. From 2015 to 2017 China introduced more than $130 billion in overseas investments each year, setting historical records.

China should commemorate the 40th anniversary of reform and opening up with practical moves. Opening up should shift its focus from commodity items to capital items, especially the opening of capital items in the tertiary industry, including such financial services as banking and insurance. Restrictions on foreign shared ownership in companies should be further loosened.

The Chinese commitment to opening up is also reflected in negotiations with the United States on a bilateral investment treaty. China has made great endeavors to this end, so much so that items on its negative list dropped from 190 in 2013 to 95 in July 2017.

Over the past few years, China has been proactively building free trade areas, and will build free trade ports, trying hard to realize all-round opening up to the rest of the world. This will further promote Chinese economic progress, helping the nation fulfill its dream of becoming a strong modern socialist country by mid-century.

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