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China’s Ongoing Reform and Opening Up

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Author:Special Research Group, Xinhua News Agency | Source:English Edition of Qiushi Journal January-March 2019|Vol.11,No.1,Issue No.38 | Updated: 2019-Jul-9


Over the past 40 years of reform and opening up, the CPC has led hundreds of millions of Chinese people in creating what will go down in history as a development miracle, in discovering a path of so­cialism with Chinese characteristics, and in enabling scientific socialism to shine with renewed vigor in the 21st century, thus accomplishing a great and unprecedented cause.

In an effort to fully and accurate­ly define the new historical posi­tion of reform and opening up and pool strength for our new journey, the Xinhua News Agency research group spent more than three months traveling thousands of miles and visit­ing 12 provinces, autonomous regions, and municipalities to interview near­ly 500 CPC officials, experts, scholars, entrepreneurs, and ordinary citizens from all walks of life. The research has enabled us to summarize and draw on the experiences of reform and opening up, study and determine its new conditions, learn about pub­lic expectations for the next stage, as well as search for the starting points as we continue to forge ahead.

I. The key to the success of reform and opening up

Over the past 40 years, the CPC has led hundreds of millions of Chinese people in creating three great historic miracles: the miracle of maintaining such sustained and steady economic growth for such a large country; the miracle of lifting more people out of poverty than any other nation in the world; and the miracle of realizing vi­brant development of socialism with Chinese characteristics.

According to statistics from the World Bank, a total of 101 economies entered the middle-income stage between 1960 and 2008, but only 13 of them managed to make the leap to become high-income economies. The majority of the world’s countries and population have failed to cross the threshold of modernization by adopting the Western model. In con­trast, China has sought out a path of socialism with Chinese characteris­tics through reform and opening up, and has thus pioneered a new ap­proach to modernization for devel­oping countries.

A great many people from all over the world are searching for the secret to the China miracle; the answer is hidden deep in the hearts of the Chi­nese people, who have undergone 40 years of hard struggle. The officials and citizens we interviewed gave their answers based on personal ex­perience and shaped through actual practice.

1. the primary key to success is that the CpC has promoted social revolution through self-revolu­tion, and its leadership constitutes the soul of the reforms.

“The capability of the CPC is the main reason why reform and opening up has been successful.” In the course of our research, officials and citizens we visited considered the most crucial element of the success of reform and opening up to be the correct and robust leadership of the CPC.

Looking back on the past 40 years of development, many interviewees who lived through this period of re­form and opening up were heartfelt in their agreement that the leadership of the CPC is the defining feature of Chinese socialism and the greatest strength of the system of Chinese so­cialism – this is a sound conclusion that we may observe from the great undertaking of reform and opening up. It is because of China’s strong leadership core that our reform and opening up has a clear standpoint, direction, and underlying princi­ples, and that we are able to achieve brilliance without committing cata­strophic mistakes.

Great revolution requires great thinking. Our interviewees believed that over the past 40 years, the CPC has lived up to the expectations of the times and the people, has coura­geously used Marxist theories to sum­marize new practical experiences and draw lessons from the contemporary achievements of human civilization, and has integrated the basic princi­ples of Marxism with China’s realities to successively create Deng Xiaoping Theory, the Theory of Three Repre­sents, and the Scientific Outlook on Development, so as to ensure that the CPC’s guiding principles develop in pace with the times. At the 19th Na­tional Congress of the CPC in 2017, Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era was established as the CPC’s guiding philosophy, thus opening up new ho­rizons for the adaptation of Marxism to the Chinese context.

“The principle of freeing minds and seeking truth from facts embodies the essence of Marxism; it was this earthshaking and enlightening princi­ple that shattered the once-prevailing state of rampant book worship, dog­matism, and rigid thinking.” Some experts and scholars said during their interviews that they considered reform and opening up as a great transition and basic prerequisite for China’s stride toward modernization. The course of reform and opening up over the past 40 years has encom­passed continued efforts not only to release and develop productive forces but also to free people’s minds; with­out great liberation of the mind, there will be no major breakthrough in re­form. Just as there is no end to the improvement of practice, there is also no end to the liberation of minds or to reform and opening up.

2. upholding development as a mighty catalyzing force to pave a path of reform imbued with Chi­nese characteristics has been an­other key to China’s success.

“Development is of absolute im­portance.” “Socialism also needs the market.” “Reform and opening up only progresses; it never ends.” Many Party officials, entrepreneurs, experts, and scholars expressed the view that China’s reform and opening up has successfully placed socialism, which goes back 500 years, on a highly re­alistic and feasible correct path in the world’s most populous country, thereby enabling scientific socialism to display renewed vitality in the 21st century.

During our research in more than 10 provinces, autonomous regions, and municipalities, almost all inter­viewees discussed the notions that “poverty is not socialism,” and that “the essence of socialism is to release and develop productive forces.” It is precisely because of our Party’s adher­ence to “one central task, two basic points” (taking economic develop­ment as the central task, and remain­ing committed to the Four Cardinal Principles and the policy of reform and opening up) and unremitting po­litical resolve to pursue development, that the great ship of China’s develop­ment has maintained a steady course without unexpected twists and turns, and that the country’s development has been able to successfully transi­tion from high-speed to high-quality growth. Our development-oriented approach has enabled the manifesta­tion of socialism’s innate vitality. Over the past 40 years of reform and open­ing up, China’s GDP has grown at an average annual rate of 9.5% in real terms; the Chinese people, who once lived with shortage and poverty, now enjoy lives of abundance and moder­ate prosperity. More than 700 million people have been lifted out of poverty, and China has become the second largest economy in the world.

Several interviewees from regions undergoing landmark reforms said, “From a completely planned economy to the early days of reform and open­ing up when the planned economy remained central but the market was allowed to play a supplementary regu­latory role, and from initially establish­ing a socialist market economy with Chinese characteristics to fully exert­ing the decisive role of the market in resource allocation, our Party’s under­standing and definition of the market economy have become increasingly accurate.” Without the creativity stim­ulated by market-oriented reforms, the Chinese economy would not be as vibrant as it is today; it is the market-oriented approach that has unleashed the creativity of the socialist system. The socialist market economy has cre­ated theories and practices that have never been discussed in Marxist politi­cal economy or other economics texts from China or abroad, fully demon­strating the unique advantages of the Chinese path.

Several officials and ordinary citi­zens said during their interviews that it is through opening up to the out­side world that China has become the world’s second largest economy, largest manufacturing nation, largest trader of goods, second largest con­sumer of commodities, and second largest recipient of foreign invest­ment, and has held the largest foreign exchange reserves and singularly con­tributed about 30% of global econom­ic growth for many years running. China has become the most success­ful developing nation to transform into an open economy, and has grown into a major influencing factor in the world political and economic land­scape. Our opening up has enhanced the global competitiveness of social­ism. Reform and opening up, as Chi­na’s second revolution, has not only changed China on a profound level but has also deeply af­fected the rest of the world.

3. another key to China’s success is that we place equal emphasis on re­specting the people’s pioneering spirit and strengthening top-level design, with authorities and citizens sharing a common purpose in honing our ap­proach to reform.

Forty years ago, 18 farmers in Xiaogang Village, Anhui Province entered into a daring agreement to contract out collectively owned land to individual households, marking the commencement of China’s rural reforms. In February 2018 , cooperatives of Xiaogang Village for the first time paid dividends on shares in collective assets, with the six-person family of Yan Lihua, one of the leading participants in the agreement, receiving 2,100 yuan in dividends. What happened in Xiaogang Village is a microcosm of people-centered reform. Many interviewed officials and experts believed that it was because the CPC put the people’s interests first in making plans and formulating measures for reform that the vast majority of people have become the main beneficiaries and strongest supporters of reform. In this way, we have considerably expanded the common grounds of interest in promoting reform and opening up.

Carrying out reform and opening up in a gargantuan country of more than 1.3 billion people is a major undertaking without historical precedent, and we must take the correct path. Over the past 40 years, we have gone from easy reform initiatives to difficult ones, from focused reform measures to the pursuit of overall progress, and from “crossing the river by feeling the stones” to integrating top-level design and local-level innovation, all of which ensure the steady progress and far-reaching outcomes of reform and opening up. A large number of interviewees noted that many of China’s reforms involved preliminary trials so that we could summarize and promote our experiences in a progressive and interlinked fashion at every level, a practice based on the goal of resolving both practical local issues and more general difficulties. This has not only allowed us to respect and utilize the creativity of ordinary people, but has also made our top-level design more systematic and integrated, and has helped us avoid the mistake of trying to hastily solve all problems overnight. This kind of reform method, in which “small wins add up to great victories,” coordinated planning promotes gradual progress, initiatives advance from easy to difficult, focused measures evolve into the pursuit of overall progress, and top-level design is integrated with local efforts, has become important experience allow- ing China’s reform to drive ever more deeply.

According to many interviewees, one highly commendable aspect of the reform is that even as numerous reform measures bring significant and profound changes to Chinese society, social stability has been maintained. Be it enterprise operations at the mi­cro level or implementation of strat­egies at the macro level, China has upheld worst-case scenario thinking to balance the relationship between reform, development, and stability. If we compare China’s successful transi­tion over the past 40 years with the stagnated development of some coun­tries, we can see it is the “Chinese wisdom” behind the “China miracle” – the leaders of China’s reform up­holding worst-case scenario thinking, balancing the relationship between reform, development, and stability, properly managing reform risks, and determining the pace, degree, and ef­fect of relevant initiatives – that con­stitutes an important key to the suc­cess of China’s reform and opening up. As China enters a more difficult phase of reform, risk management has become increasingly important.

II. After 40 years, reform and opening up now standing at a new starting point

Today, as Chinese socialism has en­tered a new era, reform and opening up has also reached a new historical starting point.

China is facing an era different from that of 40 years ago – reform and opening up now covers a broader range of areas, affects a more pro­found balance of interests, and has to deal with more acute problems, break through greater institutional barriers, and confront more complex conflicts.

1. a new historical stage: from “fighting our way ahead” to “blaz­ing a new trail”

Throughout our interviews, officials and ordinary citizens from all walks of life weighed up the changes in circumstance and environment that reform and opening up is now faced with. Our interviewees unanimously believed that 40 years ago, reform and opening up was trying to “fight its way ahead” in an environment of rigid thinking and systems. Today, by comprehensively deepening reform under the leadership of the CPC Cen­tral Committee with Xi Jinping at the core, we are “blazing a new trail” based on our existing achievements. In this new era, reform and opening up has entered a stage of develop­ment with completely different char­acteristics.

Our focus should shift from nar­rowing the development gap to exert­ing our institutional advantages. Ac­cording to some interviewed experts, developed countries are no longer China’s only basis for comparison. Instead, China now takes the global state of development as a holistic ba­sis for comparison, and has itself be­come an important component of this comparison framework. For a long time, the main focus of reform and opening up has been catching up with the West and narrowing the develop­ment gap between China and devel­oped countries and regions. Today, however, China’s economy has leapt to second largest in the world. With this in mind, reform and opening up nowadays should not only aim to further bridge the development gap, but should also focus on exerting the strength of China’s socialist system.

Our focus should shift from pursu­ing quantitative growth to pursuing high-quality development. “We need not only higher incomes but also blue skies and lucid waters.” “Our lives should be enriched in both a material and an intangible sense.” “It is impor­tant that development be high speed, but more important that it be equal.” During our interviews, people from all walks of life – whether white-collar employees in scientific and techno­logical corporations or food market retailers, whether workers in indus­trial parks or farmers in agricultural cooperatives – expressed greater and higher demands than ever in regard to reform. As the principal challenge in Chinese society has changed, there has been an upgrading of reform and opening up; the focus has shifted from pursuing quantitative growth to pursuing high-quality development. “The age of GDP as the sole metric of performance is over.” In the new era, reform and opening up should em­phasize and serve high-quality devel­opment to provide higher-level drive for economic and social progress in all aspects.

Our focus should shift from search­ing for piecemeal breakthrough points to comprehensively deepening reform in a systematic and coordinat­ed manner. Some interviewees who personally lived through the reform and opening up emotionally recalled a distinct characteristic of reform and opening up 40 years ago, namely, that it was breakthrough-oriented. China’s transition from a planned economy to a socialist market economy and from a largely closed economy to an open economy was like the process of an egg developing into a chrysa-lis. Today’s reform and opening up, however, is more like the struggle of a chrysalis breaking free from its co­coon, and is based on the establish­ment of an open, socialist market economic system. Our tasks for com­prehensively deepening reform need to be carried out in the economic, political, cultural, social, and ecologi­cal domains of society. “From now on, only when many of our reforms are implemented in a comprehensive yet focused and coordinated manner can we achieve maximum results with minimum effort.”

Our focus should shift from try­ing to please everyone to a thorough rebalancing of interests. As we have completed the reforms that “please everyone” one after another, we have found that “the choice cuts have all been eaten,” room for Pareto im­provements has shrunk, and there is a greater need for reforms aiming to rebalance vested interests. According to several community-level officials we talked with, China started with easy initiatives in the early days of reform and opening up, indicating that our reforms were aimed at ad­dressing both the symptoms and root causes of problems with a focus on the former. As the country has devel­oped, our efforts to comprehensively deepen reform have moved toward a more difficult stage, and the focus of reform has now shifted to addressing the root causes of problems.

2. a new position in the world: from avoiding losing our place among the world’s nations to ap­proaching global center stage

“China is closer to global center stage than it has ever been before, and its reform and opening up has never before attracted such close glo­bal attention.” Interviewees from dif­ferent professions and fields believed that China has significantly enhanced its international influence as com­pared to 40 years ago, and is in turn facing new tests intertwined with both opportunities and challenges.

As China merges into economic globalization to a deeper extent than ever before, reform and opening up has entered a period of complex in­tegration of domestic and interna­tional considerations. During our research, several officials from front­line reform and opening up regions told us that in today’s China, every single reform and opening up meas­ure should be viewed with a global perspective. China has been the world’s largest exporter and second largest importer of goods for nine years running, and has transformed its former focus on “bringing in” pro­duction factors such as technology, management, personnel, and capital into an equal emphasis on “bringing in” and “going global.”

The Chinese solution has captivated the world in a way never seen before, and its reform and opening up is now bringing shared benefits to the world. At the China International Im­port Expo in November 2018, many entrepreneurs from countries along the Belt and Road agreed that China’s reform and opening up has not only offered other countries another ap­proach to modernization, but is also delivering tangible development dividends to more and more countries. In the course of world development history, which has been characterized by fierce competition between major economies, China’s reform and open­ing up has become a model for peace­ful development and a paradigm of cultural progress characterized by mutually beneficial cooperation.

As China moves steadily toward global center stage, reform and open­ing up has entered a period in which China must adapt to rivalry between major countries. One interviewed expert in international relations re­marked, “China’s diplomacy will face great challenges in the next decade or so, just as other major countries have experienced in their rise to prominence.” China’s rapid develop­ment has been shadowed by a visible strengthening of targeted defensive measures by traditional Western pow­ers. As competition between major countries nears a critical juncture, China’s reform and opening up will face extremely difficult and complex external conditions.

3. a new window of opportunity: the critical leap to national rejuve­nation

Standing at a new historical start­ing point, reform and opening up is facing unprecedented opportunities and challenges. Whether the Chinese nation is capable of making the criti­cal leap to its own rejuvenation is de­pendent on our ability to firmly grasp the window of opportunity for reform and opening up in the new era, pool strength for reform, guard against risks, and see our reform through with greater courage and wisdom.

Compared with 40 years ago, the conditions and foundation for the next steps of reform and opening up in today’s China are highly favora­ble. A clear direction, a well-defined approach, robust overall national strength, and a high degree of con­sensus have laid solid foundations for further progress in reform and open­ing up. If we are to consolidate and advance this promising situation for comprehensively deepening reform, then we must adhere to the correct reform direction.

Many interviewees expressed the view that, “Compared with 40 years ago, the challenges for reform have increased rather than being reduced.” In addition to remaining steadfast in our confidence, we must never un­derestimate the difficulties that we may encounter in reform. As reform has become more difficult in nature, more costly, and less profitable, there are some officials who have weakened their enthusiasm and willingness to take on relevant responsibilities. Of­ficials and citizens that we met be­lieved that reform these days is still a race against time, and that we must be extremely alert to the potential risks involved in a loss of momentum.

III. Carrying out reform and opening up to its full extent

With regard to China’s current situ­ation of comprehensively deepening reform, the officials, citizens, experts, and scholars that we spoke to agreed that, since reform and opening up in the new era is confronted with new circumstances, tasks, and rules, and has new characteristics, there is some confusion and misunderstanding on the part of people in some regions and departments on how to promote reform. With this in mind, we should improve our awareness of the need to use Xi Jinping Thought on Social­ism with Chinese Characteristics for a New Era to guide reform and opening up, enhance our ability in this regard, and adopt scientific ways of thinking and working to properly handle ma­jor relationships that have a critical bearing on the overall state of reform. In this way, we can facilitate ongoing substantial progress in bolstering re­form in all respects.

“Alignment of thinking is a prereq­uisite for united efforts.” We currently enjoy a high degree of consensus on major issues of reform and opening up, but there is still room for debate over certain specific issues, such as how to find the best way forward in reforming the income distribution system, the medical care system, and the education system.

1. at present, it is extremely important for us to balance the relationship between upholding our principles and exploring new territory.

The more complex, sensitive, and arduous our reform tasks are, the more we need to attain a high level of consensus on major issues and form strong synergy for promoting reform. In advancing reform and opening up, we need to find unanimous agree­ment and stand firm on major issues of principle, while at the same time encouraging exploration of specific issues and implementation methods, in a bid to involve more parties in our reform and encourage constructive suggestions from all corners.

2. We need to be fully aware of what has changed and what has not.

The principal challenge in Chinese society today has become that be­tween imbalanced, inadequate de­velopment and the people’s growing needs for a better life. This is “what has changed,” and it represents a his­torical achievement of reform and opening up over the past 40 years, and constitutes a new starting point for reform and opening up in the new era. At the same time, China is still in the primary stage of socialism and will remain so for a long time, and its international status as the world’s largest developing country has not changed. In advancing reform and opening up in the new era, we need to bear in mind what has not changed, and base our work firmly in the con­text of our basic national condition and most striking reality – China is still in the primary stage of socialism. On the one hand, we need to adapt to changes by identifying new thinking, new strategies, and new measures to address the changed principal chal­lenge in Chinese society. On the other hand, we need to grasp what has not changed by firmly upholding the Par­ty’s basic line as the life source for the Party and country and the foundation of happiness for the people.

3. We need to combine our politi­cal foundation and social vitality to form synergy in reform.

The leadership of the CPC is the cornerstone of reform and open­ing up. We must always uphold the Party’s centralized, unified leadership as the political foundation of China’s reform and opening up. Meanwhile, the people are the fundamental driv­ing force behind reform and opening up, and we must continuously strive to unleash their vitality and stimulate the enthusiasm, initiative, and crea­tivity of both officials and citizens as participants in reform.

4. We need to balance fulfilling regulatory duties and relaxing control over the market, in an effort to delineate the boundary between government and market.

We need to persist in orienting our reforms toward the socialist market economy by allowing the market to play the decisive role in resource al­location and the government to better play its proper role. We need to further improve market mechanisms, disman­tle industry monopolies, departmental barriers, and local protectionism, and promote economic reform with a fo­cus on improving the property rights system and ensuring market-based al­location of production factors. We also need to more clearly identify a “nega­tive list” for government activities, and minimize the use of administrative directives. We should use reforms as a means of stimulating market vital­ity, policies as a means of guiding market expectations, government planning as a means of defining the direction of development, and the rule of law as a means of regulating market activities.

The authors are with Xinhua News Agency.

(Originally appeared in Qiushi Journal, Chinese edition, No. 1, 2019)


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