Chi Fulin：To Win the Future by Comprehensively Deepening Reform and Opening-up

This year marks the 45th anniversary of reform and opening-up and the 10th anniversary of the 3rd Plenary Session of the 18th CPC Central Committee. Over the past 45 years, through establishment and continuous improvement of the socialist market economic system, China has greatly stimulated market and social vitality, and achieved a historic leap forward of economic modernization.

Today, in the face of profound and complex changes in the internal and external development environment, comprehensively deepening reform and opening-up stands at a new historical juncture. It has to properly respond to and solve major issues of all importance, such as achieving high-quality economic development, advancing the building of a modern economic power, and promoting global economic rebalancing. All these constitute a historic mission that the new round of comprehensively deepening reform and opening-up should and must shoulder.

I. Reform remains the key to solving development problems. Important breakthroughs should be made in deepening reform to improve good development expectations

At present, our country is still in the critical period of structural transformation and upgrading of the economy. In the face of many challenges, such as increasing uncertainties in the external environment and sluggish domestic economic growth, we must unswervingly stick to the belief that development is the top priority. We should stimulate market vitality to unleash medium - and long-term economic growth potential with important breakthroughs in deepening reform.

1.1 We should boost market confidence and growth momentum with confidence in reform. It is estimated that, by 2035, the proportion of producer services in GDP is to rise from about 30% to 50%-60%, the proportion of service consumption expenditure in total consumption expenditure is to increase from 43.16% to about 60% and the urbanization rate of residents with urban household registration is to rise from 47.7% to about 65%. These are the fundamentals of China's economic development, and sources of our confidence to achieve about 5% economic growth in the next 10-15 years. Restoring market confidence and stabilizing development expectations depends on pragmatic actions to deepen reform. This requires not only further deepening market-oriented reforms to unleash the vitality of the private sector but also structural reforms to unleash the potential of economic growth.

1.2 We should take practical measures to deepen market-oriented reform to revitalize market players. China worldwide is the largest and most potential market in terms of its 1.4 billion people, more than 400 million middle-income earners and 170 million market players. The problem is that the current weakening of development expectations has become an important reason for the lack of vitality of market players. To boost market confidence and stimulate market players’ vitality, especially the vitality of private enterprises, it is necessary to firmly stick to the policy of the "two unswervinglys", which has been repeatedly emphasized by the CPC Central Committee in both theoretical and practical terms.

1.3 The business environment should be optimized with a focus on strictly regulating government regulatory behavior. At present, it has to say that the lack of vitality and motivation of market players is directly related to non-standard market supervision behaviors of some local governments and opacity of grassroots supervision. To implement the requirements by the 20th CPC National Congress to deepen market-oriented reform of factors allocation, and to build a high-standard market economy system and a unified national large market, the core is to regulate government behaviors and strengthen an open, fair and just market environment for competition.

II. Confidence in reform remains the key to deepening reform. It is imperative to form a good atmosphere for reform with firm reform consciousness and practical actions

Today, the international and domestic situations for comprehensively deepening reform and opening-up are undergoing profound and complex changes，facing more challenges and uncertainties. Therefore, we must strengthen our confidence in reform, build consensus on reform, enhance reform expectations, and make important breakthroughs in deepening reform with greater courage.

2.1. We must strengthen our confidence in and enhance our consciousness of reform. To deepen reform, we must proactively answer questions about interest relations. Previous reforms have benefited the majority. Today, deepening reform must deeply touch interest relations adjustment. The "hard bone" of reform is "interest relations adjustment". To deepen reform, we must proactively answer the question of how to act. Reform needs courage and action. It is urgently needed to prevent formalism characterized by "chanting slogans, revisiting procedures in the name of preventing risks", and to avoid "backtracking reform" in the name of strengthening norms, to refrain from only issuing documents instead of practical work or "reform only by issuing documents ". In short, to make important breakthroughs in deepening reform calls for more "reform doers" and more reform practical actions.

2.2. We should make major breakthroughs in reforms with bolder and more pragmatic actions. According to the strategic plan of comprehensively deepening reform issued by the 3rd Plenary Session of the 18th CPC Central Committee, important progress and breakthroughs have been made in some reforms in the past 10 years, such as expanding opening-up beyond expectations. At the same time, it must be noted that some reforms still lack substantive progress.

Take the reform of the household registration system as an example, the gap between the urbanization rate of residents in terms of urban household registration and the urbanization rate in terms of permanent population in the past 10 years has been only narrowed by 1%. Consequently, the process of urbanization, the expansion of middle-income group and other major structural adjustments related to medium - and long-term development have been greatly constrained.

2.3. The people are the main acting subjects of reform. To comprehensively deepen reform and opening-up, we must mobilize the enthusiasm of all walks of life. We should integrate top-down top-level design with bottom-up grassroots innovation, and encourage and support all walks of life to participate in reform. And to mobilize the enthusiasm of the people to participate in reform depends on enhancing their sense of gain from deepening reform.

III. Opening-up remains the key to advancing reform and promoting development. We should take major measures to advance high-level opening-up to form an important driver to force forward deepening reform

To adapt to the general trend of the accelerating evolution of profound and complex changes unseen in a century, we must firmly advance high-level opening-up with free trade as the main line to win the initiative in reform, in development, and in international cooperation and competition. In this sense, opening-up is the biggest development, biggest reform and biggest security.

3.1. We must achieve greater market openness. Expanding market opening-up remains an important driving force for structural transformation and upgrading of our economy. In the next few years, in the context of weak expansion of global market demand, China's further liberalization of its market will mean more impetus into world economic growth. China’s more proactive opening-up will "let the Chinese market become the world's market, a shared market, everyone's market."

3.2. Institutional reform should be driven by institutional opening-up. Opening-up is directly related to reform, institutional opening-up is directly related to institutional reform, and institutional opening-up inside the border is directly related to market-oriented reform. The purpose of China’s voluntary application to join CPTPP is to introduce high-standard international economic and trade rules, and to form pressure and driving forces for deepening reform by matching with international rules and standards. We should comprehensively establish the fundamental status of competition policy, and ensure that domestic and foreign investors, and private and state-owned enterprises, are all treated equally in terms of access to factors of production, access licensing, government procurement and bidding.

3.3. Important breakthroughs should be made in free trade by unilateral opening-up. Not long ago, President Xi Jinping, in his keynote speech at the opening ceremony of the 3rd Belt and Road Forum for International Cooperation, announced to the international community 8 actions to support jointly building high-quality Belt and Road. These are important measures for China’s proactive opening-up. I would like to propose to formulate and implement country-specific and sector-specific policies for unilateral opening-up to ASEAN so as to achieve major breakthroughs in free trade between China and ASEAN.

Against the backdrop of a possible "lost decade" for the world economy, China making important breakthroughs in its comprehensively deepening reform and opening-up will not only win sustainable economic growth in the medium- and long-term, but also have a significant impact on economic growth in the world and on global economic rebalancing. It will not only accelerate the process of building China into a modern economic power, but also enable it to play an important role in promoting a new round of economic globalization.