Opening-up key for global economic growth

The Boao Forum for Asia Annual Conference 2018, themed “An Open and Innovative Asia for a World of Great Prosperity,” is being held in Boao, South China’s Hainan Province from Sunday to Wednesday. This year, “open” is a crucial part of the agenda, showing the significance of opening-up to Asian development as well as world economic growth.

Before World War II, various countries were promoting the beggar-thy-neighbor policy – an attempt to cure their own countries’ economic problems by harming the interests of its trading partners. They built up trade barriers and in the end led to severe global trade recession, which was an important cause of WWII. After the war, the waves of globalization have been surging. The internationalization of production had risen unprecedentedly. Every economy had linked increasingly closer with each other, which promoted the prosperity and development of the world. According to a report released by the World Bank in 2008, 13 economies worldwide have achieved high-speed growth that lasted for over 25 years. A common feature of them is opening-up and cooperating with others.

Over the past few decades, Asian economies have responded to economic globalization and regional integration by continuously expanding their opening-up and increasing their interdependence. Meanwhile, Asian economies have never confined their development within the regional framework. Instead, they have continuously deepened their economic integration and cooperation with other regions around the world. This allowed the proportion of Asia in global commodity markets and foreign investments to continuously rise, while accelerating the shift of world’s economic center to Asia and strengthening the interdependence of Asia’s development with other parts of the globe.

Guided by the concept of opening-up, Asia’s economic growth has been faster than the world’s average growth rate while creating numerous economic miracles. It has become the world’s largest market for goods and services, crucial source and destination of foreign direct investment as well as the most concentrated areas of emerging economies in the 21st century. At present, the total economic volume of Asia has accounted for more than one-third of world’s economy.

As a vital member of Asia, China had also benefited from opening-up. It has successfully achieved a huge leap from a poor and backward state to the second-largest economy on the globe through deepening reforms, expanding its openingup and joining the World Trade Organization. Only by opening one’s door can a country acquire funds, technologies, resources and markets, which are necessary for promoting development.

Since reform and openingup, China has attracted more than $1.8 trillion in foreign capital accumulatively. Its own overseas investment has amounted to $1.3 trillion. It has made great contributions to the world’s economy while achieving its own rapid development. Since the outbreak of the international financial crisis in 2008, the Chinese economy has made a 30 percent contribution to global economic growth.

It is worth noting that since 2008, the trends of anti-globalization, trade, and investment protectionism have emerged. The opening-up policies of some countries have been reversed, which has brought enormous negative impact to the world economy. In particular, the US is adopting unilateral measures including Section 232 and Section 301 to threaten, pressure and even impose sanctions on its trading partners. It is waging a trade war against China, which severely violates the rules of the WTO, shakes the foundation of the global trading system and impacts the world economy and global trade.

Against the backdrop, Asia and the world need openingup more than ever. This year marks the 40th anniversary of reform and opening-up in China. Chinese leaders have recently repeatedly stated China’s determination toward further deepening its opening-up to the world. As President Xi Jinping said at the closing meeting of the first session of the 13th National People’s Congress, China needs to deepen reform more comprehensively and broaden opening-up with intensified efforts and with more concrete measures.

Given that China accounts for over half of Asia’s total economic output and about 15 percent of global economic output, the nation’s further opening-up will inevitably play a crucial role in promoting the development of Asia and the world.