Columnists
Deepening reform and opening-up decisive to future
By Chi Fulin | Updated: 2018-10-31 16:52

Editor’s note: This is an address our columnist Chi Fulin made at the 84th China International Reform Forum under the theme “China in comprehensively deepening reform and opening-up and the world” in Haikou, Hainan province on Oct 27, 2018.

An advocate of reform and opening up, Chi emphasized in his speech that the only solution to current challenges and problems is deepening reform and opening wider to the world. Here are the main points of his speech.  

      Chi Fulin

At the moment, China’s drive towards high-quality development is confronted with new problems and challenges including drastic changes in both the internal and external environment. 

Today, looking back over the past 40 years of reform and opening-up is not to revel in past achievements, but rather to explore how to make breakthroughs in comprehensively deepening reform and opening-up in the new stage. In this way, we will gain initiatives for international competitive cooperation and for domestic stability and development. 

China is now entering the post-industrial period. The key to upgrading its manufacturing sector lies in improving the macro-environment for developing the real economy.

To this end, the government should improve the legal guarantee, especially property rights, for the private economy, the backbone of manufacturing upgrading. At the same time, institutional transaction costs should be cut to regain the competitiveness of “Made in China”.  

Regarding the mid to high-end manufacturing, the innovation factors should be fully invigorated, including high-tech applications as well as incentive mechanism innovation.    

China is now entering a new-consumption era. To release the huge potential domestic demands, the key is opening the service market, so further deepening the supply-side structural reform.                     

In view of the rapid growth of service consumption, the total scale of urban and rural residents’ consumption demands is estimated to expand from 37 trillion yuan ($5.3 trillion) in 2017 to 50 trillion yuan by 2020. To meet market demand, we must break up administrative monopoly and market monopoly in the service sector and open it to all social capital. Public service sectors should also open to the markets and introduce competition, under the premise that the government guarantees the most basic services. 

The period between 2020 and 2035 is also critical to march from the middle-to-upper income stage to the high-income stage. The proportion of the middle-income group is projected to rise from the current 30 percent to 50 percent and even higher.  

Facing new changes in economic globalization, China should unhesitatingly promote all-round opening up, with free trade as the core. 

The most important thing is to establish institutional and policy systems that acclimate to expanding imports. For example, consumer goods account for less than 10 percent of the total imports. If the share rose to 20 percent, it will bring opportunity to domestic consumption structural upgrading, and create a market of about $400 billion for other countries. 

Within the framework of Belt and Road Initiative, financial cooperation should be promoted, along with other service sectors such as education, healthcare, tourism, culture, exhibition, etc. 

Free trade zones also need upgrading and transformation. For example, promoting the Guangdong-Hong Kong-Macao integration in service trade, and creating the Hainan international tourism consumption center. 

At present, China’s reform and opening-up is at a new historical juncture. The level of complexity, sensitivity and arduousness of moving forward reform is no less than 40 years ago. Amid domestic economic transformation and profound changes in the external environment, further reform requires emancipating minds, real actions, and higher efficiency. Releasing the huge potential domestic demand of 1.4 billion people will render us momentum of stable economic growth in next 10 years or even a longer period, but also bring more benefits to the whole world.

The views expressed do not necessarily reflect those of China Watch. 

All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.

Editor’s note: This is an address our columnist Chi Fulin made at the 84th China International Reform Forum under the theme “China in comprehensively deepening reform and opening-up and the world” in Haikou, Hainan province on Oct 27, 2018.

An advocate of reform and opening up, Chi emphasized in his speech that the only solution to current challenges and problems is deepening reform and opening wider to the world. Here are the main points of his speech.  

      Chi Fulin

At the moment, China’s drive towards high-quality development is confronted with new problems and challenges including drastic changes in both the internal and external environment. 

Today, looking back over the past 40 years of reform and opening-up is not to revel in past achievements, but rather to explore how to make breakthroughs in comprehensively deepening reform and opening-up in the new stage. In this way, we will gain initiatives for international competitive cooperation and for domestic stability and development. 

China is now entering the post-industrial period. The key to upgrading its manufacturing sector lies in improving the macro-environment for developing the real economy.

To this end, the government should improve the legal guarantee, especially property rights, for the private economy, the backbone of manufacturing upgrading. At the same time, institutional transaction costs should be cut to regain the competitiveness of “Made in China”.  

Regarding the mid to high-end manufacturing, the innovation factors should be fully invigorated, including high-tech applications as well as incentive mechanism innovation.    

China is now entering a new-consumption era. To release the huge potential domestic demands, the key is opening the service market, so further deepening the supply-side structural reform.                     

In view of the rapid growth of service consumption, the total scale of urban and rural residents’ consumption demands is estimated to expand from 37 trillion yuan ($5.3 trillion) in 2017 to 50 trillion yuan by 2020. To meet market demand, we must break up administrative monopoly and market monopoly in the service sector and open it to all social capital. Public service sectors should also open to the markets and introduce competition, under the premise that the government guarantees the most basic services. 

The period between 2020 and 2035 is also critical to march from the middle-to-upper income stage to the high-income stage. The proportion of the middle-income group is projected to rise from the current 30 percent to 50 percent and even higher.  

Facing new changes in economic globalization, China should unhesitatingly promote all-round opening up, with free trade as the core. 

The most important thing is to establish institutional and policy systems that acclimate to expanding imports. For example, consumer goods account for less than 10 percent of the total imports. If the share rose to 20 percent, it will bring opportunity to domestic consumption structural upgrading, and create a market of about $400 billion for other countries. 

Within the framework of Belt and Road Initiative, financial cooperation should be promoted, along with other service sectors such as education, healthcare, tourism, culture, exhibition, etc. 

Free trade zones also need upgrading and transformation. For example, promoting the Guangdong-Hong Kong-Macao integration in service trade, and creating the Hainan international tourism consumption center. 

At present, China’s reform and opening-up is at a new historical juncture. The level of complexity, sensitivity and arduousness of moving forward reform is no less than 40 years ago. Amid domestic economic transformation and profound changes in the external environment, further reform requires emancipating minds, real actions, and higher efficiency. Releasing the huge potential domestic demand of 1.4 billion people will render us momentum of stable economic growth in next 10 years or even a longer period, but also bring more benefits to the whole world.

The views expressed do not necessarily reflect those of China Watch. 

All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.