China’s Opening-Up Policies: Achievements and Prospects

Abstract

China began its era of reform and opening up in 1978, which profoundly changed China and has deeply influenced the world. As a result of its opening-up policies, China has become the largest country in the world in goods trade and the second-largest country in services trade. Both inward and outward foreign direct investment (FDI) grew fast, reaching US$134.9 billion and US$129.8 billion, respectively, in 2018. Those figures represent 7.9% and 19.3% of the world FDI. Over the past four decades, China’s volume of trade in foreign goods has increased 204-fold, whereas its GDP has increased only 34-fold. In this respect, China has successfully pulled off a miracle in foreign trade. This chapter reviews the major practices and achievements of and lessons learned from China’s opening-up policy and forwards policy suggestions for China’s continued opening in the future.

This chapter is a joint work with Dr. Tenglong Zhang and originally published in China 2049 by David Dollar, Yiping Huang, and Yang Yao, The Brookings Press, 2019.