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Interview with Wang Huiyao: China on a new journey in a globalized world

Date: 2019-06-21
YouthNet: Looking back on the past 70 years of the People’s Republic of China, what would you single out as the most important factor in China’s development?

Wang: The most important factor or our biggest strength in the past 70 years since the People’s Republic of China was founded is a well-developed industrial system formed in the first 30 years after China started reform and opening-up. Now, 40 years into this policy agenda, China has become the world’s top manufacturing center, the factory of the world. This could not have happened without a strong industrial base. China has also enjoyed a demographic dividend, as it is the world’s most populous nation. It achieved in 70 years what some countries spent centuries to realize; in particular, it maintained a growth rate of over 9% for 40 years. You don’t see that happen very much around the world. All of this is attributable to the size of the country, the complete industrial system and the huge demographic dividend.

YouthNet: Moving away from the economy, are there any other lessons of development we could learn from history?

Wang: We created a mechanism called consultative democracy in 1949 to put together the best minds across a united front in the country. This has never been tried before by other countries; it is a homegrown innovation, an exercise of democracy different from the parliamentary style. On the basis of extensive consultations and solicitation of opinion, it centralizes decision-making and follows the leadership of the Communist Party of China (CPC), which ensures debates are productive and result-oriented. Chinese think tanks also joined this process recently.

This decades-old system still proves to be effective today. The united front that it has been able to forge is obviously a key element in our success over the past 70 years and should be continuously strengthened. It is an embodiment of the core socialist values advocated in our society, such as freedom, equality, and democracy. It is also important to note that, as an exercise of democracy, this process is in line with the common values of human society. The Chinese did not come to where they are today simply by doing everything in their own way; they also adopt international practices and adapt to a globalized world. Consultative democracy is a case in point. Making this clear will help the international community better understand China and avoid misjudgment.

YouthNet: What can we learn from the reform and opening-up program?

Wang: The context that must be mentioned is globalization. The past 40 years since this program was introduced not only witnessed China’s fast growth, but also a surging trend of globalization which elevates the GDP of almost all countries. In this period, China transitioned from being a country big in terms of population to a country strong in educated human resources. In 2001, we joined the WTO and the following 18 years brought us strategic opportunities for development. Our GDP grew by nearly 10 times; so did our international trade. We also adapted our policy system; upon China’s entry into the WTO, thousands of our outdated policies and regulations were abolished and a new tender invitation system was put in place, together with a number of other steps aimed to integrate China and its market into the global framework. So promoting globalization should continue to be our direction.

YouthNet: Reform and openness are mutually reinforcing. How does China continue to implement the policy in a globalized world?

Wang: Now we need to find impetus for reform from increased openness. It has been the other way around in the past decades. The CPC convened its reform-minded third plenary session of the 11th Central Committee on 18 December 1978 and established diplomatic relations with the US shortly afterwards on 1 January 1979. It was a time when reform was a precursor to openness. This order should be changed now. We need to open the country wider, reach out further into the world, and build more partnerships. China is the top partner for economic cooperation and trade for a dozen neighboring countries and the biggest trading partner for 130 countries across the world. But our international partnerships are not extensive enough. We need to continue working on this.

To drive the reform agenda in a globalized world, I believe we must start from our policies. Every 10 years in the past four decades, we have been able to get a huge policy boost for development. In the 1980s, it was the household contract responsibility system; in the 1990s, the commercialization of urban housing created a 400 million-strong middle class, a fast growing real estate sector, and a booming economy; in 2001, we joined the WTO and soon grew to be the world’s second largest economy. At the same time, we must realize that the window of strategic opportunities is closing over the past 18 years. How to respond to this change is a big challenge for us now. I believe strengthening domestic demand is the way to go.

YouthNet: What are the ways to do it?

Wang: As mentioned earlier, our economy has been growing fast for 40 years on the back of three important policy steps. Now we have 400 million people in the middle class, and another one billion aspiring to join them. We need to make this happen. China has 500-600 million rural population in addition to about 300 million who have moved into cities for employment. Homestead reform is urgently needed to cut a slice of the reform cake for this group of the population. Their urban counterparts had the good fortune to own an apartment provided by their employers. Why don’t we give the rural population the right to a homestead so that they too can join the ranks of the middle class? Now the two-way flow of population between urban and rural areas is not happening. If villagers can sell their homestead and buy an apartment in the cities, it will be a strong push for the real estate sector; if city dwellers can find retirement housing in villages, it will also help ease the population pressure in cities. I see great opportunities here which we should not miss.

YouthNet: What is your advice for the Belt and Road Initiative?


Wang: The BRI must go beyond a collection of MOUs with over 100 countries. It has the potential to be a multilateral arrangement for the whole world to get involved. Such is what has happened with the AIIB, which has attracted 95 countries. We can replicate this in the BRI, only on larger scale. Be it setting up a governance committee or holding the BRI forum in Geneva, ideas like this are all worth trying out. It is important to build a global governance mechanism into the initiative.
 
This year, following our advice, the BRI forum added a business sub-forum with 1,000 participants, making it one of the most popular events. China is the world’s largest market; the more deeply involved multinational companies are in our market, the longer the window of strategic opportunities will stay open; if these companies are turned away, China will face serious challenges in its external environment and our own businessmen will lose confidence. Just like their foreign counterparts, private business owners in China are also eager for reform. MNCs contribute to 10% of China’s job opportunities and 20% of GDP; they are an important engine for our economy.