Opinion | How China’s continued opening up sets country on path to better future

At the third plenum of the 11th Central Committee in 1978, Chinese leader Deng Xiaoping called on Communist Party cadres to “emancipate our minds, use our heads, seek truth from facts”. He would soon take charge of a country that had freshly emerged from the disastrous upheaval induced by ideological extremism and unbridled mass mobilisation.

Few in the world then could have foreseen the seismic transformations that China would undergo. In strategically privatising segments of the national economy, bolstering governmental transparency and accountability and pursuing China’s integration into the global economy, Deng and his associates did away with the prior fixation on grand narratives and set the country on a track of pragmatism-fuelled modernisation.

Nearly 50 years on, China faces a vastly different world. It has leapfrogged many countries on its way to becoming the second-largest economy in the world. The Global South is rising, albeit unevenly and with apparent internal differences. Supply chains are increasingly being disassembled and reassembled, with finance and trade flows redirected along the lines of geopolitical and regional blocs.

With the third plenum taking place this week, China must recognise that its fundamental recipe for success has not changed. Keeping its doors open and making way for bottom-up experimentation remain integral elements of its economic success, especially as it seeks to undertake the much-needed transformation into a knowledge-based advanced manufacturing powerhouse with a robust, affluent middle class.

First, China must empower its entrepreneurs to fill pressing gaps and elevate the experimental competitiveness of both private and state-owned enterprises. Economist Keyu Jin has pointed to the demand deficit and loss of confidence in the private sector as obstacles in China’s post-pandemic recovery. Researchers have observed that local government debt has crowded out private investment through selectively imposing funding constraints.