Global Influence of China’s Reform and Opening—Up

Tan Xingyu

Over the past four decades， China has grown from an underdeveloped country to the worlds second largest economy， with its per capita GNI （Gross National Income） increasing from less than US$300 to more than US$9，000. Meanwhile， over 700 million of Chinese people have been lifted out of poverty. Few countries have made such great achievements as China did throughout human history， and Chinas successful development has consequently been dubbed a “Chinese miracle.”

The fundamental driver behind the Chinese miracle is the countrys reform and opening-up policy， through which China has removed old systems hindering socio-economic development and opened its door to embrace the outside world. In this process， the country has aligned its own development with the world economy and made remarkable contributions to global economic growth. Inspired by Chinas success in reforms and globalization， many other countries around the world have implemented similar policies based on their respective national conditions， creatively absorbing and utilizing Chinese experience and greatly boosting their own economic and social development.

Sensing the importance of system reform and globalization after Chinas success， many countries have adopted similar policies based on their respective national conditions， creatively absorbing and utilizing Chinese experience to propel their own socio-economic development. In this sense， the reform and opening-up benefits not only China， but also the whole world as the Chinese wisdom contributed to the development of human society and a great historic program of global significance.

Vietnam： Fruitful Achievements of the Doi Moi Policies

Vietnam has a social and economic system similar to China. The two countries have faced similar challenges and difficulties in their respective paths of development. In the second half of the 1980s， sluggish economic growth in Vietnam escalated into an economic crisis， which then caused a severe social crisis. Under pressure from these crises， Vietnamese leaders realized the disadvantages of past policies and launched the Doi Moi （renovation） policies.

Chinas remarkable achievements since its implementation of the reform and opening-up policy provided a pristine example for Vietnams economic and social development. In 1986， the 6th National Congress of the Communist Party of Vietnam formulated “new policies” to vitalize the economy through emphasizing the role of the market and passed the decision to “adopt a roadmap for economic development through upholding an economic structure comprised of entities with various ownerships in a long run and with investment focusing on agriculture and light industry.”

Vietnams Doi Moi policies involve multiple fields such as economics， politics and culture， with the economic sector as the flashpoint. Just as China started its reform by renovating its rural land system， Vietnam kicked off its Doi Moi with changing the status quo of its agricultural production by adopting a trial household contract responsibility system. Implementation of the system reversed the continual reduction in grain yield that had plagued Vietnam for years. Since the late 1980s， Vietnam has seen grain yield growing in consecutive years and the living standards of its people improving considerably.

In terms of industry， Vietnam first took measures to carry out market-oriented reform of state-owned enterprises， give greater autonomy to enterprises and encourage and support the development of the private economy. Gradually， enterprises turned from state-controlled to market-regulated， and the government mainly functioned through macro regulation and intervention. Moreover， the Vietnamese government formulated and enacted a series of laws and regulations to protect the private economy including the Law on Private Enterprises adopted in 1990 and the stipulation on the protection of private property in the Constitution revised in 1992. In December 2001， the 10th meeting of the 10th National Assembly of Vietnam passed an amendment to the Constitution which confirms that “the socialism-oriented market economy is the general economic pattern for Vietnams socialist transition period.”

After more than three decades of efforts， Vietnams Doi Moi has registered remarkable achievements. In 2015， the size of its national economy reached US$204 billion， about 7，000 times higher than that of 30 years ago， its per capita GDP increased to US$2，200 from some US$100 three decades ago， and Vietnam ranked 50th in the world and 6th among ASEAN countries in terms of economic aggregate. The Doi Moi policies have earned widespread acclaim with the Vietnamese people and laid a solid foundation for the countrys political and cultural progress.

Laos： Another Case of Reform and Opening-Up

Laos has many similarities with its neighbors—China and Vietnam—in terms of political and economic systems. As early as 1986， it launched its own reform and opening-up policy.

This policy is centered on economic development and gives top priority to the goal of providing adequate food and clothing for its people. In 1986， The Lao Peoples Revolutionary Party （LPRP）， the ruling party of Laos， determined to unwaveringly implement guidelines of “comprehensive reform and renewal.” To this end， a variety of policies were formulated and enacted. In May 1991， after reviewing its experience over the previous five years， the LPRP adopted a policy of “principled comprehensive reform and renewal” while opening the countrys door to the outside world.

Like China and Vietnam， considering its comparatively underdeveloped economy， Laos raised economic development to the top of its agenda， and made boosting economic growth and enhancing peoples living standards the long-term development goals of the country. It promoted the reform of its economic system and attached great importance to the transition towards a commodity economy. The country also reformed its ownership and commodity structures to guarantee the coexistence and development of economic entities with various ownerships while maintaining the dominant position of state-owned economy in the national economy. In August 1991， Laos adopted a Constitution which stipulates that “the state protects and promotes all kinds of investment by domestic and foreign investors in Laos， including those owned by the state， and those under collective， individual and private ownerships.”

Statistics from the World Bank show that over the past decade， Laos GDP has grown at an average annual rate of 7 percent， and the figure even hit 8 percent between 2006 and 2013. Meanwhile， its rice yield doubled， and its gross industrial output increased 6.8 times. Lao peoples living standards and wellbeing have significantly improved， with per capita annual income exceeding US$1，700 in 2015 and average life expectancy increasing to 66 years from 50 years in 1979. Data shows that Laos economic growth rate is higher than both the world average and the Asian average， only slightly lower than that of China and Vietnam. Alongside the establishment and improvement of its market economy system， Laos has also constantly enhanced its opening-up level. As a result， its economic growth fluctuation is decreasing and its economic stability is growing yearly.

India： Rising BRICS Country

China and India are the two most populous countries in the world. Despite their contrasting political systems， they have formulated and enacted similar economic policies. In the nascent days of the current government systems， both countries adopted an import substitution industrialization strategy， and they later launched consecutive economic reforms. In the late 1970s， China began its reform and opening-up， which was further accelerated after 1992. In the early 1980s， India loosened its economic control and officially launched economic reform in 1991 with an aim to achieve “liberation， marketization， globalization and privatization.” Over the past three decades， Indias economy has maintained a 6-percent annual growth rate on average. A World Bank survey showed that 600 million people around the world were lifted out of absolute poverty from 1980 to 2010， of whom the overwhelming majority were from China and India.

As soon as he took power in 2014， Indian Prime Minister Narendra Modi began piecing together an ambitious economic development plan. Although Modi stressed India had no intention of copying Chinas development model， the blueprint he drew still featured manufacturing-driven economic growth similar to the Chinese model. In his extempore 2014 Independence Day speech， Modi asked the world to “Come， make in India，” with hopes of multinational enterprises investing in Indias manufacturing industry to expand the sector and create more jobs. The core of the “Make in India” initiative is to “attract investment and expand exports.” It aims to attract foreign investment through combined reform measures and active economic diplomacy to foster significant growth in the manufacturing industry and expand into the global market through furthering opening-up and promoting exports. India has set the goal of increasing the percentage of manufacturing in GDP to 25 percent by 2025 to create 12 million jobs for young Indians each year and make the country a global manufacturing hub. The South Asian country has attempted to promote manufacturing development while addressing problems concerning economic growth， urbanization， poverty alleviation and pollution by using its advantages in tech and service industries and the implementation of the “Make in India” and “Digital India” initiatives.

The Modi administrations development strategy is just one stretch of continuous Indian economic reform， opined Professor Li Yanfang from the Research Center for the Indian Ocean Region at Yunnan University of Finance and Economics. He likens the strategy to alignment between Chinas development model and Indias economic realities. Since Modi took power， “Indias economy has basically developed well and maintained steady growth despite the gloomy global economic landscape， laying the cornerstone for the Modi governments efforts to further reforms and also injecting new impetus into the countrys economic development.”

Ethiopia： African Economic Miracle

A middle-school textbook in Ethiopia states： “China once lagged behind for a period in modern times， but through decades of tireless struggle， it created an economic miracle； Since Chinese people could get rich from poverty， we Ethiopians can create an economic miracle likewise.”

In recent years， Ethiopia has made remarkable achievements in economic development. Once one of the worlds least-developed economies， the African country suffers a weak economic base. In 2015， its per capita GDP was only US$740， and agricultural output accounted for about 40 percent of its GDP and industrial output 15 percent. Lacking abundant natural resources， Ethiopia takes pride in its large population of young laborers and has shown great interest in the Chinese model when choosing a development path.

Chinas rapid development has set an example for the African country eager to shake off poverty. The Ethiopian government is keen on practices such as building economic development zones， accelerating infrastructure construction and driving economic growth through investment. Presently， infrastructure projects are being carried out in almost every city in the country. Driven by external investment， since 2004， Ethiopia has seen its economy expanding at an average annual rate of more than 10 percent， making it now one of the worlds 10 fastest-growing economies.

In 2005， Ethiopia launched its first Five-Year Plan to accelerate sustainable economic development. The theme of its second Five-Year Plan （2010-2014） shifted to “growth and restructuring，” with focus on manufacturing development and infrastructure construction. A modern industrial park focusing on light industries such as clothing， cap and shoes manufacturing， and electronics has been built in the capital Addis Ababa. Many Chinese manufacturers have set up plants in this industrial park. Moreover， several other industrial parks are under construction along the Addis Ababa–Djibouti Railway. Open to traffic in October 2016， the railway linking Ethiopia and Djibouti is expected to speed up economic growth of both countries.

The Ethiopian ambassador to China once said， “We aspire for development， and our country needs to change. China spent 30 years lifting 600 million people out of poverty， which evidences the success of the Chinese model. Apart from China， which country could we learn from？”

An ancient civilization that fostered brilliant culture in history， Ethiopia is bursting out new vitality. The big country with a population of some 100 million is rising like a shining star in East Africa.