How China's institutional opening up creates global growth opportunities

China's commitment to expanding its institutional opening up is garnering significant international attention, with highlights in both the 2026 Government Work Report and the 15th Five-Year Plan (2026-2030).

These guideline documents emphasize the importance of pursuing mutually beneficial cooperation, deepening reforms and steadily advancing opening-up at the institutional level to promote broader global economic exchanges.

Institutional opening up has become the core of China's strategy to build a new, high-level open economy, especially in the face of a complex international environment and significant domestic reform challenges, said Liu Bin, a researcher at the University of International Business and Economics.

In this regard, China has in recent years proactively aligned with high-standard international economic and trade rules, steadily expanded opening up in the markets for goods, services, capital and labor, and promoted compatibility and mutual recognition of rules, regulations, management practices and standards across various fields.

FTZs as key drivers for institutional opening up

In recent years, China has made significant strides in its opening-up efforts. Chen Lei, director general of the Department of Development Planning of the National Development and Reform Commission, said at a press briefing in March that the negative list for foreign investment has been reduced to just 29 items, with all restrictions on foreign investment in the manufacturing sector lifted.

During the 14th Five-Year Plan (2021-2025), China has taken its pilot free trade zones (FTZs) as "testing grounds" for institutional opening up, said China's Commerce Minister Wang Wentao.

These FTZs have led several breakthrough initiatives in areas including trade and investment liberalization and facilitation, as well as financial opening. For example, shortly after its launch, Shanghai FTZ introduced China's first negative list for foreign investment access. Additionally, pilot FTZs in Shanghai, Tianjin and Beijing have pioneered efforts to build secure and efficient systems for cross-border data flows and develop negative lists for data export management, providing valuable insights for improving data governance models.

Currently, China has established 22 pilot FTZs contributing to approximately 20% of the nation's foreign investment and trade. Samir Hamrouni, CEO of the World Free Zones Organization, highlighted the Hainan Free Trade Port as a prime example of a "testing ground" for global high-standard trade rules, streamlined customs operations, and a favorable business climate. The progress made in these zones is accelerating China's institutional opening and setting the stage for further reforms.

Additionally, China is making steady progress toward joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Digital Economy Partnership Agreement, expanding its commitment to high-level economic rules in areas such as digital and green economies.

Focus on services sector

As China continues pursuing high-standard opening up on its way to realize high-quality development and Chinese modernization, the 2026 Government Work Report identifies institutional opening up as a central priority, with the most prominent task being to expand opening-up in the services sector.

China will further expand opening-up trials for value-added telecom services, biotechnology, wholly foreign-owned hospitals, and other fields, take well-ordered steps to expand opening up in the digital sector, and shorten the negative list for cross-border trade in services, said the report.

The Ministry of Commerce has conducted open pilot programs in fields such as cloud computing, biotechnology and wholly foreign-owned hospitals, with a number of projects already implemented.

By the end of 2025, more than 90 foreign-funded enterprises had been approved for pilot programs in value-added telecommunications services and a number of wholly foreign-owned hospitals had been approved, said Wang Ya, deputy head of the foreign investment department of the Ministry of Commerce.

The digital economy has emerged as a particularly prominent area of focus. At the 2026 Two Sessions in this March, experts discussed how digital trade and services are set to drive the next phase of economic growth, potentially surpassing traditional goods trade. Kou Gang, dean of the Big Data Research Institute at Southwestern University of Finance and Economics, stressed that opening up in the digital sector is an essential part of institutional reforms, positioning digital trade as a new engine for the services industry.

New data from the State Administration of Foreign Exchange reveals that China's digital services trade surplus surged to approximately $33 billion in 2025 – an increase of over 100% from the previous year. Notably, the telecom, computer, and information services sectors saw a surplus of around $31.8 billion, up nearly 30% from the previous year, underscoring the growing importance of digital trade in China's economic strategy.

Carl Fey, professor of Strategy at BI Norwegian Business School, told CMG that as China continues to ease restrictions on foreign investment, a more open China will present new opportunities for the world.