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February 26, 2019

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Deepening reform leads to opportunities

In celebrating China’s reform efforts, two milestones are worthy of particular notice: the Third Plenary Session of the 11th CPC Central Committee held in December 1978, and the Third Plenary Session of the 18th CPC Central Committee held in November 2013.

The first milestone marked the beginning of a new era for reform and opening-up, and for modern, socialist construction, while the second milestone marked a new phase of comprehensively deepening the reform, and pressing forward the reform systematically.

And sure enough, during the five years since the Third Plenary Session of the 18th CPC Central Committee, we have been pushing forward reform and opening-up with greater political courage and wisdom, and more effective measures and methods.

Such efforts find their embodiment in every facet of our social life.

Soon after the Spring Festival, in the workshop of Shandong Himile Science and Technology Company, workers there were busy making a state-of-the-art steel casing pipe to be used in deepwater petroleum and gas drilling 3,000 meters under the sea.

“We could not hope to be what we are without reforms,” said Zhang Gongyun, Chairman of the Himile Group, which is in the midst of a transformation from rubber-making to marine engineering equipment manufacturing, which entails high investment in research and development.

The investment has been made possible by tax reforms that significantly reduced the group’s tax burden.

According to Zhang, last year the VAT reform and a host of other tax breaks and incentives resulted in a reduction of a total of 288 million yuan (US$43 million) in various taxes.

These benefits show the country’s determination in deepening tax and fiscal reforms, as well as reflect companies’ longing for tax reductions.

If the reform initiatives 40 years ago were kicked off amid some “controversies,” then the new reform and opening-up is more an indicator of popular anticipation and desire.

As the economy is being steered along a path of high-quality development, the increasing yearning for good life on the part of the people calls for deepening reform and opening-up.

“It has been generally recognized that reform and opening-up in the new era is not a slow reform, but needs to speed up; instead of being a minor reform, it should be overall and thorough-going; rather than being a perfunctory reform, it has to be pushed forward with firm resolution; instead of being a false reform, it needs to show results,” said Yang Weimin, deputy director of the economic committee of the Chinese People’s Political Consultative Conference National Committee.

If the early reform had been pushed forward in the spirit of “crossing the river by feeling the stones,” the reform in the new era is guided by a clear roadmap and operational science.

Take the instance of the uneven development in Beijing, Tianjin, and Hebei, which used to be a chronic problem hindering the region’s development. Due to a lack of top-level design and integrated planning, there had been little headway in pushing forward the development there until five years ago, when development of the region was elevated to the height of being a national strategy.

With the orderly alleviation of Beijing’s non-capital function, the emergence of Xiongan New Area, and the coming-into-being of a brand-new sub-center of Beijing, the coordinated development of Beijing, Tianjin and Hebei has quietly jump-started a deepened regional reform, injecting new vigor into the cause of the great rejuvenation of the Chinese nation.

Rule of law

If the earlier reform involved much pioneering effort, the new round of reforms enjoys greater guarantee in terms of systems.

According to Zhao Ping, director at the Institute of China Council for the Promotion of International Trade, the publishing of the Negative List for Market Access (2018) last December suggested that China “has the mechanism in place to align with global practice in opening up to the outside world.”

Significantly, comprehensively deepening, perfecting and developing the socialist system with Chinese characteristics must be accompanied by the rule of the law. Only reform spearheaded and regulated by the rule of law could be sustainable. Predictably, the reform initiative is creating fresh room and dynamism for development.

Every Chinese should be proud of these figures: GDP in excess of 90 trillion yuan last year, with per capita GDP nearing US$10,000, and over 700 million people being firmly lifted out of poverty in reference to relevant UN criteria.

The China story is also drawing attention from the world.

Ever since the global international crisis in 2008, some developed countries, in dealing with the crisis, chose to resort to large-scale economic stimuli rather than significant structural reforms, thereby leading to greater income disparity, the decline of traditional industries, and the lay-offs of blue-collared workers.

These measures were akin to turning an acute condition into a chronic disease. By contrast, by firmly pushing forward with the supply-side reform, China had achieved economic growth that is the fastest among the top five economies globally, contributing to nearly 30 percent of global economic growth.

But challenges remain. As the global economy is undergoing significant restructuring, the rise of protectionism and unilateralism means global economic order is at a crossroads.

Internally, after decades of heady growth, weakened traditional drivers of growth mean the need to tap into systematic and technological dividends. At a deeper level, there is also the need to clear the hurdles of vested interests and ideological constraints. All these challenges hope to be addressed with deepening reform and opening-up.

The article is adapted from a People’s Daily report published on February 20.


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