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Deepen Reform to Construct a New Mechanism for an Opening Economy


Long Guoqiang, Development Research Center of the State Council

The 13th Five-Year Plan period is a critical period for China to adjust its opening-up strategy. As huge changes have taken place both at home and abroad, China’s opening-up is to deal simultaneously with the profound adjustment of global economy, the reform of global economic governance and a new round of formation of trade rules, and the deep-going transformation of China’s foreign economic relations and its comparative advantages. Under such complicated international and domestic environment, China’s opening-up needs to take the following steps. First, we must be fully aware of the importance and urgency of upgrading China’ competitiveness. Efforts need be made to achieve the transformation and upgrading of China’s international competitiveness from labor-intensive industries and value-added links to capital and technology-intensive industries. If we do not raise China’s international competitiveness, we shall fail to get beyond the middle-income trap. Therefore, we must understand the significance of upgrading China’s international competitiveness from such a perspective and seek new driving force for China’s economic growth under the new normal. Since time presses, we must realize the urgency of realizing this mission. Second, in order to cultivate new advantages for China’s participation in international competition, we must make the best use of the strategic opportunities. As regards these new conditions, new opportunities involve both opening-up and going global. In terms of opening-up, the government is introducing more high-end industries and talents to China. In terms of going global, we are facing many opportunities such as overseas low-cost mergers and acquisitions induced by economic crisis. By overseas low-cost M&A, China’s enterprises can integrate resources around the globe and obtain advanced technology, research capacity, international brands, and channels of international marketing, hence quickening the pace of increasing the international competitiveness of China’s enterprises. With the growing expansion scale of China’s economy, China’s international influence is also growing significantly. China can create new opportunities by bringing its role into full play. And third, developing China’s new edges for international competition calls for institutionalguarantee. Strengthening the construction of a new mechanism for open economy needs to be based on the reality of competitiveness upgrading. In terms of opening-up, it is necessary to improve China’s investment environment to create a law-based, efficient, and transparent marketing environment. Service industry is the focus of China’s new round of opening-up while high-end manufacturing also needs deepened opening-up. In terms of going global, China also needs to make reform. Related government departments should further streamline the approval and management procedures concerning foreign investment and pay more attention to rendering service and providing protection for enterprises to encourage their foreign investment. During this process, the construction of a new mechanism of open economy and the strategy of opening-up should be combined to construct the new mechanism of open economy via deepened reform so as to guarantee China’s new advantages in participating in global competition.