China (Beijing) Pilot Free Trade Zone Photo: Zhao Yuan/CSST

Over the past 40 years, opening up has become one of the two wheels driving the Chinese miracle, effectively contributing to China’s success in completing the building of a moderately prosperous society in all respects as scheduled. At present, China has embarked on a new journey of building a modern socialist country in all respects, promoting economic recovery and integrated development in both quality and quantity in the medium to long term. It is urgent to inject fresh impetus into development through high-standard opening up, thereby supporting the long-term development of the Chinese economy, and ensuring the smooth realization of the modernization goal.

Firstly, high-quality development requires the international economic flow to provide more resources and markets, bringing new momentum to economic growth.

China’s econmic development has underscored the continued importance of “two resources and two markets” for future development. On one hand, strategic deployments such as optimizing the domestic industrial structure, developing alternative resources and energy, promoting circular and green economies, and enhancing domestic supply capacity must be pursued. On the other hand, efforts to secure necessary energy resources from overseas should be continued. Diversifying the energy resource supply will create more favourable conditions for the development of domestic industries. 

The international market is equally important for domestic industries undergoing transformation and upgrading. Venturing into new tracks means opening up new markets. Relying solely on the domestic market with limited capacity cannot fully unleash the growth potential brought about by investment. The development of technical products often requires huge investment, and the larger the industrialization scale of research and development results, the more benefits they bring. It is necessary to expand our international market share as much as possible, synergistically leveraging the “two markets” to make more significant contributions to economic growth.

Secondly, high-quality development requires participation in a high-level global division of labor system to provide new momentum for industrial upgrading.

The improvement of China’s economic strength and industrial status will inevitably lead to adjustments and changes in its position within the global industrial division of labor system. With the continuous improvement of industrial technology and competitiveness, China’s participation in the global industrial division of labor will inevitably shift from the low-to-mid end of the vertical division of labor model to the mid-to-high end of the horizontal division of labor. First, over the past decade or so, among China’s three types of export commodities (capital, consumer, and intermediate goods), intermediate goods have grown the fastest. The increase in the proportion of intermediate goods in exports is a typical manifestation of a country’s deepening participation in the industrial division of labor. Second, there has been a significant surge in horizontal trade between China and its major trading partners. The proportion of industries dominated by the horizontal division of labor has increased from around 15% in the early 21st century to around 45% in 2021, indicating that China’s manufacturing industry is transitioning from the vertical division of labor model to the horizontal division of labor model. This achievement is a direct result of industrial transformation and upgrading, and is poised to enhance China’s manufacturing capabilities.

Thirdly, high-quality development requires high-level international sci-tech cooperation to provide new momentum for technological self-reliance and strength. For many years, China has enhanced domestic industrial technology levels through the introduction of advanced foreign technologies, thereby enabling these industries to engage in the research and development of new products and technologies at a higher technological level. Currently, China’s industrial technology has reached a stage where a multitude of technologies coexist, with both relatively advanced and advanced technologies continuously expanding.

Currently, international sci-tech cooperation in China has shifted from a unidirectional introduction to a bidirectional flow of both introduction and exportation. Since 2014, China’s technology exports have grown strongly, with a stable imports growth rate. The gap between technology imports and exports has significantly narrowed, as has the technology trade deficit. China’s outward-oriented international technical cooperation will continue to increase in the future.

Of course, independent innovation in key areas is also crucial. In the future, China will focus on tackling key core technology areas that are under constraints to ensure smooth and stable domestic circulation in extreme situations.

Fourthly, high-quality development requires benchmarking against high-standard economic and trade agreements to provide new impetus for deepening domestic reforms.

Currently, China has applied or is applying to join multiple high-standard trading systems. Actively adhering to high-standard international economic and trade rules can help promote the building of domestic market systems towards a higher level and more in line with prevailing international rules, and create a market-oriented, law-based, and international open business environment.

Promoting high-quality development through high-standard opening up is significant and challenging. Opening up will bring many new development opportunities to China and other countries globally, and the reasons and forces for promoting opening up are equally strong and widespread. Those who break through obstacles and actively strive for progress will benefit from it.  

Jiang Xiaojuan is a professor at the University of the Chinese Academy of Social Sciences and president of the China Society of Industrial Economics.

Edited by ZHAO YUAN