China’s journey of opening up to the world has been marked by significant reforms and strategic initiatives. Before 1978, China had virtually no private businesses. However, the introduction of the private sector and market incentives into the state-dominated system transformed its economy. Today, private firms contribute to approximately 60 percent of China’s GDP.
Over the past few decades, China has experienced remarkable economic growth, achieving double-digit increases for nearly twenty years. This rapid development has lifted 800 million people out of poverty, a feat unprecedented in human history. The process of opening-up required a comprehensive overhaul of China’s economic system, which was approached through careful experimentation. As Deng Xiaoping famously said, it was like “crossing the river by feeling the stones.”
While the market has played an increasingly significant role in allocating resources, the state continues to maintain strong control over the economy. On one hand, there has been a significant opening-up to foreign direct investment (FDI) and the introduction of new sectors for foreign investors. On the other, the state provides subsidies to strategic industries to bolster domestic capabilities.
China’s commitment to development is evident in its recent 14th Five-Year Plan. From the outset of reform and opening-up, China has prioritized the development of domestic industry and technological capabilities. The country has become a hub of innovation, making major advances in areas such as space exploration, deep-sea engineering, supercomputing, and quantum information. It boasts the world’s largest high-speed rail network and has successfully eliminated extreme poverty.
In the previous 13th Five-Year Plan, China furthered its opening-up through initiatives like the Belt and Road Initiative, enhancing connectivity and economic cooperation with countries and regions worldwide. As globalization faces challenges like protectionism, China’s high-level opening-up aims to foster international collaboration and shared prosperity in a new era.
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China's higher-level opening-up in new period of globalization
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