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Long Guoqiang

I. Introduction

China is rising up as a trade power in today’s world. Though the global trade was still grappling with the economic downturn in 2003, China posted the highest growth rate of its value of imports & exports since 1980. China’s turnover of foreign trade in 2003 reached US$ 851.21 billion, up by 37.1% over the previous year. Its total export value was US$ 438.37 billion, up by 34.6% over the previous year, thus ranking 4th place in the world; its total import value accounted for US$ 412.84 billion, up by 39.9% over 2002; as a result, China has now surpassed Japan and become the world’s third biggest import market.

Over the past 25 years, China has now become the 4th biggest trade power in the world instead of the previous 32nd one. This is one of the most eye-catching scenarios observed in the course of globalization. China has seized those emerging development opportunities brought forth by globalization, and managed to boost its domestic economy to embrace quick growth. Meanwhile, China is now being considered as a new engine driving the evolution of global economy thanks to the speedy growth of its import. An increasing number of countries are allowed to share the burgeoning opportunities generated by China’s economic growth.

As China has begun to play a different role in the international trade system, profound changes have taken place in terms of both the internal and external economic environments that China is faced with. As far as its internal economic environment is concerned, the Chinese government has put forward the goal of reaching the per capita GNP level of moderately developed countries by mid-21st century, and also formulated a development strategy involving "three steps". The economic development has brought along new pressure upon both the environment and resources; accordingly, it has become a task of increasing importance to break those bottlenecks that impede China’s economy from growing further in the international arena. Constant upgrading of industrial structure has brought the country into a new period of heavy industrialization. Owing to the constantly climbing level of urbanization, it has become more and more important to coordinate the developments of urban and rural areas, and different regions. Rapid economic growth has caused a speedy transformation of the social structure, and given increasing prominence to the contradiction between social development and economic development. As far as the external environment is concerned, multi-lateral negotiation proceeds slowly, trade protectionism gains ground, while regional economic integration is being boosted. Under such circumstances, on the one hand, the Chinese market has appeared more and more lucrative. With regard to attraction of foreign investments and reinforcement of her economic cooperation with other countries, China has already unprecedentedly occupied an important position in the global arena. On the other hand, the external climate that China’s exports are now faced with is becoming increasingly grim, as a growing number of trade frictions have arisen between China and other countries, while more prominence has been given to the "trade imbalance" issue between China and some of its important trade partners. Under such circumstances, the Chinese government has, for the first time, clearly brought forward a brand-new development concept featuring "five coordinated developments"; among these, "the coordination of domestic development and opening to the outside" is of major importance to China’s foreign economic strategy.

Under new circumstances as such, how should China readjust its strategies for opening to the outside world? What influence will China’s flourishing economy bring along to the international community? These strategic issues are broadly arresting attention. This paper will discuss these issues in four parts. Part I puts forward an analysis framework of China’s strategy for its opening to the outside, and briefly reviews the evolution course of China’s foreign economic strategy; Part II utilizes the analysis framework brought forward in Part I to analyze those major factors influencing China’s strategy for its opening to the outside at present and in the future; Part III gives a perspective of China’s foreign economic strategy; Part IV briefly analyzes the influence exerted by China’s economic boom upon the rest of the world.

I. Review of China’s Foreign Economic Strategy

Since the mid-20th century, China’s economic system has witnessed a transformation from a planned economy to a market one while its economic development strategy has also turned to feature an "open economy", instead of the previous "closed economy". During the 30 years from 1949 when the People’s Republic of China was founded to 1979 when China implemented the policy of reform and opening up to the outside world, China has carried out an "import substitution" strategy. From late 1970s to 2001 when China became a member of WTO, China implemented both the import substitution and export-oriented strategies. This section will follow the analysis framework brought forward by the author to prove the effectiveness of this analysis framework by means of reviewing briefly how China’s foreign economic development strategy has been whipped into shape.

1. Analysis framework of China’s foreign economic strategy

Generally speaking, the foreign economic strategy of a country can be divided into four types: closed type, import substitution type, export-orientation type and open type. Owing to diverse conditions in different countries, disparities do exist in terms of strategic measures among countries which have put into force the same type of foreign economic strategy such as import substitution.

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