[SCMP Column] China's Continuous Opening: The Path of a Responsible Great Power

Deng Xiaoping urged to "liberate thoughts and seek truth from facts" at the 3rd Plenary Session of the 11th Central Committee of the Communist Party of China held in 1978. Afterward, he led China, which had just emerged from the tragic upheavals caused by ideological extremism and indiscriminate mass mobilization.

At that time, few predicted the rapid changes China would undergo. Deng Xiaoping and his colleagues strategically privatized parts of the national economy, enhanced government transparency and accountability, and worked to integrate China into the global economy. Through this, China abandoned its obsession with grand narratives and embarked on a path of modernization based on pragmatism.

Now, about 50 years later, China faces a very different world. China has risen to become the world's second-largest economy. The global Global South, including Africa, has also emerged, but this growth shows regional disparities. Existing supply chains are being dismantled and reassembled. Financial and trade flows are also being reorganized along geopolitical and regional blocs.

However, there are similarities to the past. Historians like Niall Ferguson argue that the current era is a "Second Cold War." The spirit of mutual benefit through globalization and free trade, praised immediately after the Cold War, has now been replaced by a harsh reality of fierce hegemonic competition among great powers.

China must recognize through this week's (15th?18th) 3rd Plenary Session that the fundamental formula for success has not changed. Keeping the door open and allowing room for bottom-up experimentation remain essential elements for China's economic success, especially considering China's pursuit of a transition to a knowledge-based advanced manufacturing powerhouse with a robust middle class.

First, China should empower entrepreneurs to enhance the experimental competitiveness of both private and state-owned enterprises. Economist Qiyu Jin identified demand shortfalls and loss of trust in the private sector as obstacles for China after the pandemic. Research also shows that private investment is being squeezed due to limited financial capacity caused by local government debt.

Private enterprises, especially small and medium-sized enterprises, play a crucial role as the backbone of employment and growth, spreading innovation and creating greater social value. However, from January to November last year, fixed asset investment in China's private sector decreased by 0.5%, contrasting with a 6.5% increase in state-owned sector investment during the same period.

The signals sent by Chinese President Xi Jinping recently meeting with prominent liberal economists and entrepreneurs are very welcome. The National Development and Reform Commission also released a report urging stronger financing and listing support for private enterprises.

Nevertheless, more effort is needed. China must improve consistency, certainty, and clarity in policy-making processes and communication with private enterprises. Legal protections for grassroots entrepreneurship and private-led research and innovation must also be strengthened.

State support is essential in strategic sectors such as solar panels, electric vehicles, and lithium batteries, but now China should promote competition among companies and encourage joint ventures with overseas partners instead of providing additional subsidies. These resources could instead be invested in agriculture and elderly-tailored technologies that can help address China's food security and aging population issues.

Second, the Chinese government must continue to open China to foreigners, whether tourists, students, or skilled workers. Professor Zheng Yongnian of the Chinese University of Hong Kong's Department of Political Science argued that China should voluntarily open its markets to the world.

Recently, signs have appeared that the Chinese government is responding to foreign companies based on needs and benefits. Examples include easing mainland visa restrictions for Chinese permanent residents living in Hong Kong and including Australia and New Zealand in the visa exemption list announced during Premier Li Chang's visit to Australia last month.

The Chinese government should expand the visa exemption list in the future and extend mainland entry visas for international students registered in Hong Kong. This would allow Hong Kong to serve as a buffer zone between mainland China and the world.

Moreover, the Chinese government should pay closer attention to difficulties faced by foreign companies operating in China, such as administrative regulations, business disputes, and the opacity of security laws. Strong measures are needed to restore foreign investors' trust.

Finally, what is needed is experimentation and openness. This requires an accurate and sophisticated understanding of the outside world. The COVID-19 pandemic dealt a severe blow to human exchanges between China and the world. China must not give up constructive dialogue and healthy debate with experts, organizations, and stakeholders, even if opinions differ. Even if criticism is predominant, private discussions with well-informed and good-faith interlocutors should be held more frequently, comprehensively, and across diverse areas.

Advice may be unwelcome. Naturally, positive stories and enthusiastic praise will be welcomed. However, China needs proactive and fair responses based on critical information. Through this, China can demonstrate to the world that it is a responsible great power capable of constructive cooperation with other countries for core interests.

Brian Y.S. Wong

Assistant Professor of Philosophy at the University of Hong Kong and Strategic Advisor at Oxford Global Society

This article is a translation by Asia Economy of the South China Morning Post (SCMP) column titled ‘How China’s continued opening up sets country on path to better future.’

This content was produced with the assistance of AI translation services.