Jiang Xiaojuan Photo: FILE

Openness is the most distinctive marker of contemporary China. Jiang Xiaojuan, a professor at the University of the Chinese Academy of Social Sciences (CASS), said in an interview with CSST that China’s opening up has entered a new stage.

CSST: In your opinion, what is the relationship between the development of theories on opening up and opening up in practice?

Jiang Xiaojuan: Classical theories explaining “opening up” to the outside world include the theory of absolute advantage, the theory of comparative advantage and the theory of factor endowment. After the Industrial Revolution in the 18th century, the production capacity and economic conditions of various countries were differentiated, and the economic structural characteristics of different countries were prominent. At the same time, international trade developed rapidly. In this period, the objects traded via international trade included a range of products. Starting in the second half of the 18th century, scholars focused on the importance of international trade, exploring the importance of international division of labor and free trade, as well as how it can bring benefits to all parties involved. Since the 1960s, there has been a marked change in the objects involved in international trade. The “intra-industry trade” among developed countries constituted a major part of international trade, and traditional trade theories based on comparative advantages cannot provide a reasonable explanation for this phenomenon.

As a result, a group of economists developed a new theory of international trade based on trade practices, drawing on industrial organizational theory. At this stage, international trade primarily consists of intra-industry trade. Therefore, the focus of attention, and research content of international trade theory were also adjusted according to the situation.

CSST: What are the distinctive features of China’s opening up?

Jiang Xiaojuan: The uniqueness of China’s opening-up path raises an important question, that is, are we so “distinctive” that the existing theories cannot explain it effectively and a new theoretical framework needs to be constructed to analyze it? My understanding is that China’s opening up, in terms of starting points and steps, and various cross-sections of the development process, does show a significant deviation from the opening up patterns of most countries. However, in terms of long-term trends and essential features, it still follows the basic laws of economic opening up.

In terms of basic trends and main features, China shows the same convergence of changes as other developing countries in the opening up process.

The unique impact of China’s national conditions on opening up also has corresponding theoretical explanations. For example, China’s factor of production structure is imbalanced, and there is an urgent need to adjust through the employment of international and domestic resources and those two markets. Large numbers of both foreign and local enterprises have greatly developed through competition, which is directly related to the huge size of our market, which can accommodate multiple competing entities.

CSST: Looking ahead, how do you think we can promote opening up to the outside world from a higher starting point?

Jiang Xiaojuan: Shifting from policy-driven opening up to institutional opening up is an important focal point for promoting opening up in the future.

After more than 40 years of reform and opening up, China basically has the conditions and environment for institutional opening up, and in the future, we should keep improving the institutional opening up system and make it relatively fixed. We should continue to improve the system of foreign-related economic laws and regulations, adhere to the principle of equal status of all types of economic entities and equal protection of all types of property rights, and improve the level of law implementation and enforcement. In other words, equal emphasis should be given to exports and imports, to the absorption of foreign capital and foreign investment, and to foreign-funded enterprises, and domestic enterprises.

Joining high-standard trade agreements also raises the level of openness. On November 20, 2020, Chinese President Xi Jinping announced at the 27th Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Meeting that China would favorably consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which attracted attention and applause both at home and abroad. These agreements, if they all come into force, will cover more than 55% of international trade and international investment, and promote a new round of globalization in related areas.

Since 2022, we have joined the Regional Comprehensive Economic Partnership (RCEP) and applied to join the Digital Economy Partnership Agreement (DEPA). This will certainly push forward the domestic construction of the institutional system, and the open system that connects with it, facilitating domestic reform and energizing supply-side structural reform along with institutional innovation. At the same time, it will also contribute China’s wisdom to the formation and development of the globalization governance system in the future.