China's extraordinary development has been accomplished by shifting from its socialist planned economy to a market economy while also opening the country to the rest of the world. The administration of Chinese President Xi Jinping should return to the basic principles behind that drive.
Forty years have passed since the Chinese Communist Party announced a reform and open-door policy. The policy was advocated by Deng Xiaoping, who later became China's paramount leader, with a view to rebuilding the country's economy after it was devastated by the Cultural Revolution.
China eased controls exercised by the party and attached importance to market principles, thereby rapidly expanding its private sector. The development of the country's coastal areas preceded that of its inland regions, as foreign-capital companies found it easier to expand their operations into the coastal districts. This means the gap between the rich and the poor was, in effect, accepted.
China's gross domestic product has expanded 220-fold over the past 40 years. It is now the world's second-largest economy. Confronted by the so-called Lehman shock in 2008, China prevented the world economy from sinking even further through a large-scale business stimulus package, which made its presence felt worldwide. There is no doubt that China has built its own growth model.
In a commemorative ceremony in Beijing, Xi said he would maintain the open-door policy, saying, "China cannot develop itself in isolation from the world, and the world needs China for global prosperity."
The problem is that, despite advocating a plan to continue reforms, Xi is stepping up efforts that run counter to that move, such as thorough measures to ensure the party takes the lead in "all activities."
Respect intl rules
These steps include providing preferential treatment for state-owned enterprises and corporations receiving government subsidies and oppressing private-sector companies. There seems to be no end to cases in which foreign-owned corporations are coerced into transferring their technology to China as well as those involving the theft of intellectual property. Among various nations, there has been growing distrust in and criticism against China.
Xi seems to be changing the reform and open-door policy, which aimed at transforming his country into a market economy and seeking coexistence and shared prosperity.
What has supported China's growth is aid from the international community, including Japan's official development assistance.
Although it had yet to fully shift to a market economy, China joined the World Trade Organization with the backing of such nations as Japan and the United States in 2001. It should not be forgotten that China's great strides were based on the benefits of the free trade system.
The United States regards China's industry-promotion program, called "Made in China 2025," as a problem. This is because the United States believes China is aiming to override U.S. predominance in the field of cutting-edge technology by making technological innovations under the initiative of the state. Concerns also persist that China may divert private-sector technology to military uses.
Conflict between the United States and China has extended from trade to the high-tech field, and the situation shows signs of being long-lasting. There are growing moves among the United States and its allies to exclude products by such firms as Huawei Technologies Co., a leading telecommunications equipment company that serves as the mainstay of the "Made in China 2025" initiative, citing security risks as the reason for these moves.
Xi must rectify his authoritarian handling of the administration while also obeying international rules to fulfill China's responsibility as a major power.
(From The Yomiuri Shimbun, Dec. 25, 2018)
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