Highlight - How do China’s “reform” and “opening up” interact with each other?

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Reform and opening up is China’s basic state policy. Although “reform” and “opening up” are usually associated and voiced together in one phrase, each of these two fundamental developing concepts contain its own key points.

2018 marks the 40th anniversary of reform and opening up. During this period, China has found opportunities and faced challenges, and it continues to do so today in the New Era.

As for reform, China is comprehensively deepening reform, which is essential for China to achieve its Two Centenary Goals (2021 and 2049). For instance, the government has taken measures to modernize the national governance system by streamlining bureaucracies and rationalizing functions. However, China has also faced challenges, such as severe imbalance between urban and rural areas.

In terms of opening up, China seeks to further open up, exemplified by the recent China International Import Expo in Shanghai (November 2018). Yet, China today faces a new challenge in the trade war with the U.S., which hinders the opening up process.

At this critical moment for comprehensively building a well-off society, how do “reform” and “opening up” interact with each other? Robert Lawrence Kuhn discusses this issue with economist Fan Gang, vice chairman of China Society of Economic Reform.

Yujiapu Global Go in Tianjin, an import commodity display and exchange bonded business district. Located in Tianjin Free Trade Zone, Yujiapu makes full use of the advantages of favorable policies and vast resources to provide consumers with enjoyable purchasing experiences. / VCG Photo

According to Fan Gang, domestic reform outweighs opening up. At the same time, there is no doubt that opening up is a prerequisite for reform. China cannot make progress in reform without opening up internationally.

However, reform is the fundamental requirement for China’s development. If China doesn’t change its domestic institutions, Chinese companies cannot develop rapidly, even though the government invites foreign companies to China to cooperate with them.

If China doesn’t change its domestic systems, China cannot fundamentally change even after increased engagement with the outside world. If there is no fundamental domestic reform, the government will thus behave the same way and progress will be thwarted.

Fan Gang says that he attaches more importance to domestic reform, which plays a decisive role in China’s overall process of economic development.