China’s new opening measures spark debate Measures spark debate
National security concerns shouldn’t stop reforms, experts say
A recent move by the Chinese government to open a wide range of sectors to foreign investors has drawn heated debate in China, with some experts and institutions warning dire consequences for domestic industries and national security, while others argue the move is in the right direction.
Following the release of the new opening measures over the weekend, a fierce debate erupted on Chinese social media platforms and elsewhere, with some arguing opening key sectors to foreign investors could be dangerous, while others said the new moves are a necessary part of China’s reform and opening process to ensure sound long-term growth.
The debate points to a lingering challenge
for Chinese policymakers who are under pressure both at home and abroad to pursue economic policies that balance market opening with domestic economic realities.
“Crop seeds are the microchips of the agricultural sector. A small seed could trip up a huge country,” a widely circulated article on WeChat read. “Opening up seed production is like cutting off the roots of China’s destiny.”
The comment was directed at the Chinese government’s move to lift restrictions on foreign companies in all crop seed production, with the exception of wheat and corn.
“Opening up the sector is in the right direction. It would increase competition. But opening-up should be conducted along with domestic agricultural reforms. Otherwise, it would be inviting a wolf into the house,” Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultancy, told the Global Times, stressing that the government needs to provide more support
for farmers.
Li Shihua, a farmer in Northeast China’s Heilongjiang Province, said that if foreign seeds can increase output, then “it’s a good thing,” but he worries foreign genetically modified seeds would flood the Chinese market. “No genetically modified seeds should be allowed,” he said.
Other areas such as power grids and railved ways that were removed from a new “negaff tive list” for sectors off limits for foreign iny’s vestors in the country’s free trade zones also sparked concerns following their release by
the National Development and Reform Commission (NDRC) on Saturday
“Power grids and railways indeed belong to strategic resources involving national security. How could the [NDRC] cancel restrictions requiring Chinese majority ownership?” read a post on a Weibo account run by a research center for national cultural security and ideology construction under the Chinese Academy of Social Sciences, an influential government think-tank.
The post also pointed to examples of the US barring Chinese telecommunication firms from entering its market for national security reasons to argue that national security should come before reform and opening-up. “Be cautious of the danger of ‘the more open the better’ misconception,” it said.
But some experts with close ties to the government argue that the opening measures are necessary steps for both external and domestic reasons and that concerns over national security might have been overblown.
“We can’t simply point to national security to stop trying to open up the market,” Tian Yun, director of the China Society of Macroeconomics Research Center, which is affiliated with the NDRC, told the Global Times. “That’s both unnecessary and counterproductive.”
Tian further pointed to China’s economic success since its accession to the WTO in 2001 as an example that China should continue to open up its market. “Back then, many said we had invited the wolves into our house, but now as the Chinese economy grows fast, many believe the so-called China threat theory,” he said.
Furthermore, Tian said, the opening measures should be viewed in a global perspective because China has risen to be the flag-bearer for free trade, and that needs to be followed with concrete actions.
“We are showing the world that China, unlike the US, would never throw its domestic interests over those of others, and we will protect the global multilateral free trade system,” he said.