In 1978, China embarked on a historic journey of reform and opening up. Ever since, the country’s economy has become increasingly connected to the world market and integrated with the global economic system. Over the past 40 years, China has benefited greatly from world economic growth, and its achievements couldn’t have been realized without the support from the international community. So today, China is enthusiastic about making greater contributions to the world.
Engine for World Economic Growth
Since China’s reform and opening up began in the late 1970s, the contributions that the country’s economic development made to world growth have been constantly increasing. In 2006, China overtook the United States to become the largest contributor to global economic growth. During the 2008 global financial crisis when many major economies including the United States and Japan experienced negative growth, China remained a major contributor to the global economy. In recent years, the contribution rate of the Chinese economy to world growth has remained steady at around 30 percent. China has played an increasingly important role as a stabilizer and driver of global economic growth.
Since its reform and opening up began, China has been one of the world’s most competitive exporters and top destinations for foreign direct investment (FDI). After the 2008 global economic downturn, the Chinese government made strategic adjustments demonstrating its ability to smoothly adapt to new situations. Equal importance was attached to both import and export, and enterprises were encouraged to invest abroad as well as attract FDI. Previously, emphases of the country’s reform and opening up were placed on increasing export and attracting FDI. For about a decade, China’s imports and investments abroad have been playing a bigger role in global economic growth.
China’s import growth has influenced the whole world. The country has become the fastest-growing major import market globally in recent years. In 2017, the total value of goods imported by China stood at US$1.8 trillion, accounting for 10.2 percent of the world’s total, second only to the United States. Over the next 15 years, China is expected to import goods and services worth more than US$30 trillion and US$10 trillion, respectively. From November 5 to 10, 2018, China hosted the China International Import Expo (CIIE), the world’s first import expo at the national level. The CIIE has created a more convenient platform for goods to access the Chinese market and for various countries to share China’s fast-growing consumer market.
China’s investments have benefited the world at large. After the 2008 global financial crisis, cross-border investments slumped. However, China’s outbound direct investments have seen a steep increase and are becoming an important capital source for world economic growth. By the end of 2017, the stock of China’s outbound direct investments reached US$1.48 trillion, and the total assets of China’s enterprises abroad exceeded US$5 trillion, which have become key drivers promoting economic development in host countries. China’s outbound investments are improving infrastructure in host countries, facilitating economic takeoffs and creating more jobs globally.
Advocate of Economic Globalization
While China has benefited from globalization, its development is also conducive to globalization. At present, economic globalization is enduring twists and turns, with protectionism and unilateralism on the rise. Against this backdrop, China has remained steadfastly committed to economic globalization and strives to be an advocate and promoter of the process.
China explicitly opposes protectionism and defends the multilateral trading system. The multilateral trading system, with the World Trade Organization (WTO) at the core, serves as the cornerstone for current international trade and the pillar supporting its healthy and orderly development. China believes the rules of the WTO should be upheld firmly and its necessary reforms should be sought. The country wants to make economic globalization more open, inclusive, balanced and beneficial for all.
China will resolutely expand its opening up. In the face of rising protectionism, instead of closing its door as a reflex, China is embracing the world with an even more open attitude. The country has been committed to implementing a management system based on pre-establishment national treatment and a negative list. It will broaden market access by a large margin, expand the opening up of its service industry, further lower tariffs and promote trade and investment liberalization and facilitation. In general, a more open China will inject stronger impetus into the economic globalization process which is currently facing headwinds.
Driver of World Development
China is now committed to contributing wisdom and solutions to address the world’s development problems. And China’s development ideas are gradually becoming accepted by more countries in the world.
The path forward for developing countries has been a long-standing issue. China’s rapid economic rise opens two new windows for developing countries to consider. First, it has provided a new model for developing countries to realize rapid economic development. Second, China’s achievements have reinforced the confidence of some countries in their own unique development paths which were designed according to their respective national conditions. China’s experience illustrates that every country can choose a developmental path suitable for its own national conditions based on the historical context and practical needs.
China’s achievements in poverty alleviation lead the world’s poverty reduction cause. China has become the largest contributor to the global fight against poverty. According to 2010 criteria, from 1979 to 2017, the poverty-stricken population in China’s rural areas dropped by 740 million, and the poverty incidence rate in the country has fallen to 3.1 percent. China’s accomplishments in the global effort to combat poverty are impressive. Furthermore, China’s targeted poverty alleviation efforts have provided the global poverty reduction battle with examples of Chinese solutions and wisdom.
New concepts proposed by China such as pursuing innovative, coordinated, green, open and shared development are guiding China’s new development, and they are also becoming more widely accepted by the international community. These trends have become developmental concepts adopted in a wide variety of countries as they realize coordinated social and economic progress and promote common prosperity.
The author is a professor with the Department of Economics, Party School of the CPC Central Committee (Chinese Academy of Governance).