Opening-up key to economic success

The third plenum reaffirmed the CPC's commitment to promoting high-quality growth, for which China must stay engaged with the world, especially countries in the Global South

The recently concluded third plenum of the 20th Central Committee of the Communist Party of China reaffirmed Chinese modernization as the driving force for development. It is asserted that while China's basic economic system must be upheld, it is essential to build a system that promotes high-quality growth, supports comprehensive innovation, and fosters integrated urban and rural development.

One of the urgent concerns is to revive an economy that has yet to fully recover from the COVID-19 slowdown. A key strategy the third plenum set is to give the market a more decisive role in the economy and level the playing field for all types of firms — State-owned enterprises, private entrepreneurs and foreign investors. Other priorities include rebalancing the economy toward consumption by strengthening the social safety net and stimulating the services sector to enhance growth potential and create jobs.

Even as the emphasis was on deepening ongoing reforms, the third plenum reaffirmed the government's commitment to pursuing a high-quality market socialist system, which must ultimately be people-centered and benefit the collective good. Equally important, the third plenum upheld the Party's overall leadership in strengthening both central and provincial governance in managing the country's economic challenges. A key principle was to pursue progress while ensuring social stability and security.

Here lies a feature that sets China's modernization apart from others, namely, the pivotal role of the State. In the West, the State and society are often viewed as being in an adversarial relationship, with the government seen as impeding individual rights and restricting human potential. In contrast, in China, the State is perceived to have a more fiduciary relationship with society, where both work together to further public and private interests. It is this cooperative partnership that has driven China's economic success over the past decades. This strong Party leadership is what makes China's "modernization with Chinese characteristics" distinct from Western models.

Another defining feature of China's remarkable economic transformation is Deng Xiaoping's momentous decision in 1978 to launch reform and opening-up. There is no doubt that China has greatly benefited from engaging with the world and opening its doors to the global community. Globalization has proven to be a boon for China.

Unfortunately, the international environment today has become hostile, with rising economic nationalism leading countries to turn inward. Amid a tense trade war, the United States is imposing tariffs and sanctions on China, undermining the global trade order. Seeing China as a systemic threat to its global dominance, the US is determined to stifle its technological advancement by imposing bans on the export of advanced chips and other critical technologies.

It is in the context of this hostile international environment that the third plenum reaffirmed China's resolve to continue pursuing self-reliance and reducing its dependency on foreign technologies. Despite external challenges, China has achieved a degree of self-sufficiency. For instance, Huawei, after initially losing some ground, has regained its status as a leading smartphone manufacturer. While US sanctions have caused delays, they have not derailed China's quest for technological advancement.

At the third plenum, the Party leadership emphasized turning its quest for self-sufficiency into new quality productive forces that will drive the next phase of Chinese modernization. This push for high-quality, technological growth includes a focus on three specific industries: electric vehicles, lithium-ion batteries and photovoltaic products.

Indeed, over the past decade, China has emerged as a leading green technological powerhouse, dominating the production and innovation of solar panels, wind turbines and electric vehicles. In the EV sector, for example, China leads the market in both manufacturing and adoption. Aggressive investments in EV technology and infrastructure have positioned the country at the forefront of the global transition to sustainable energy solutions.

In the West, China's success in the EV sector is seen as a threat, leading to the imposition of high tariffs. However, in the Global South, China's breakthroughs in EV technology are aiding developing countries in their transition toward greener economies. For instance, in Malaysia, Geely has pledged to establish an EV manufacturing plant, which will not only support the green transition but also facilitate technological transfer and boost the local economy.

Here lies a crucial observation: while rising economic nationalism may have caused the West to retreat inward, globalization remains alive and thriving in the Global South. Developing countries such as Malaysia continue to embrace free and open trade, which has significantly contributed to their socioeconomic advancement.

The third plenum reaffirmed the Party's commitment to various goals, including promoting high-quality growth and maintaining a high-quality socialist market system. For the global community, it is crucial that China retains its policy of opening-up, as it has been key to China's economic success. Despite the ongoing tense great power rivalry, China must stay engaged with the world, not only for its own economic growth but also for the betterment of the international community, especially countries in the Global South.

The author is a research associate at the Malaysia-China Friendship Association, Kuala Lumpur. The author contributed this article to China Watch, a think tank powered by China Daily.

The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.