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Machhapuchre Bank

The path of prosperity: China’s reform and opening-up policy

The year 2018 is coming to end and within the year the world is seeing anti-globalization force, protectionism and the trade war between the world’s two largest economies, People’s Republic of China (PRC) and United States of America (USA).
However, this year has significantly more precious value for China as this is the 5th anniversary year of the Belt and Road Initiatives (BRI). (And, New Year, 2019 will mark the 70th anniversary of founding of PRC.) And, above all, this year marks the 40th anniversary of China’s reform and opening-up policy — the policy which brings rapid and sustainable development inside China and also enables to contribute greater momentum to the global economy.
It was indeed a revolution, after the establishment of new China and Cultural Revolution which accomplished the development and prosperity of China and Chinese people.
After the death of Chairman Mao in 1976, leader Deng Xiaoping had succeeded in becoming the top leader of China’s second generation. In 1978, he had implemented the policy of reform and opening-up with the plan to build a moderately prosperous country.
In 1978, December 18 to 22, the decisive meeting of the third session of the eleventh central committee of the Chinese Communist Party was held in Beijing and he announced that the reform and opening-up policy will be implemented for the comprehensive improvement of an economic conditions and open up China to the world. He made a historic speech and called on people to dare to think, explore new methods and put forward new ideas.
In that period, about 250 million people living in rural areas were below the absolute poverty line and to increase people’s income and the economic development and poverty alleviation were the top priorities to bring up a prosperous society.
Since the policy was introduced, China has embarked on widespread economic reforms in both rural and urban areas. The reform and opening-up was the force behind China’s economic miracle over the past four decades.
It has become the path of prosperity to all Chinese people from generation to generation and its rapid economic development is an opportunity for the world. From the slow economic growth in the 1980s, progressing towards in the Millennium and at present, China has developed unprecedentedly in every aspect. Now, China is a major world economic power, the biggest trading nation in the world. And, China is moving towards the direction of a modern socialist powerful nation.
By 2020, China will fulfill the goal of building a moderately prosperous society with completely eliminating poverty and as plan, by 2035 to accomplish socialist modernization. And, China is moving ahead with the aim of making a prosperous, democratic, culturally advanced, harmonious and beautiful socialist modern powerful country, by 2050.
China is constantly rising and leaping a huge step in the field of economy, development, science and technology, space exploration, national security and defense.
China will become the world’s first economic nation in about ten or twenty years. China’s share in the global economy was 1.8 percent when Leader Deng took steps for economic reforms in 1978. In 2017, her share has reached at 18.2 percent. Currently, China is the world’s second largest economy in terms of total gross production (GDP).
The average annual growth rate of GDP in China has been 9.5 percent in the past 40 years, which increased by 33.5 folds in the period from 1978 to 2017. Due to this growth rate, China has become a developed country from low-income country. In 2017, the GDP has reached US $ 12.84 trillion, and GDP per person has reached US $ 8,836.
In the past four decades, 800 million people have been uplifted from poverty, the largest poverty reduction campaign in human history, according to the World Bank. It is a historic movement for China, and as well as inspiration for the world. By March 2018, 38.5 million Chinese people have been upgraded in the middle class. Currently, more and more Chinese people are living a comfortable life.
According to the statistics, in the year 1978, urban per capita disposable income was RMB 343 and the rural per capita net income was RMB 134. In the year, 2017, after the four decades, it raised up to RMB 36,396 (US $ 5,270) and RMB 13000 (US $ 1,882) respectively. The number of rural and urban employment has reached 77 million in 2017.
In the last four decades, national programs of comprehensive and economic reforms have been implemented in rural area as well as in the urban area and to cities, from the economic sector to political, cultural, social and other fields.
In addition, China has developed the world’s largest social security mechanism by arranging pension insurance for 90 million people. In the beginning of the new China, the average age of Chinese people was 43 years and it has been reached to 76.7 years in 2017.
Within the past four decades, China has played an instrumental role in global peace and stability. China is the second-largest contributor to the UN peacekeeping costs and 2,500 Chinese peacekeepers are serving in nine UN peacekeeping operations.
Currently, China is also the largest foreign currency reserves country. It has the highest foreign exchange reserves of US $ 3.12 trillion. Similarly, China is also leading the world in high-speed rail, e-commerce, mobile payments and shared economy. China has the world’s largest market for automobiles and a total of 24.72 million passenger vehicles were sold in 2017.
China is the largest trade country and trade partnership has spread from 40 countries and territories to 231 in the period from 1978 to 2017. According to the statistics, China’s import-export amount has increased from RMB 35 billion to 27.8 trillion from 1978 to 2017, which increased by 782 folds.
China’s service trade volume climbed to second place in 2014. In 2017, China’s goods imports and exports surpassed RMB 46 trillion. China’s Outbound Direct Investment (ODI) climbed to second place in 2016 and it has reached US $124.6 billion in 2017. China’s Foreign Direct Investment (FDI) climbed to second place in 2013 and China’s actual use of FDI has increased 60 folds since 1983, to 136.3 billion U.S. dollars in 2017.
According to Ministry of finance and Commerce of China (MOFCOM), China’s FDI has reached US $ 135 billion in 2017. Since adopting the reform and opening-up policy, China has opened up a market of over $1.7 trillion to foreign investment, and invested over $1.2 trillion overseas.
In addition, the first ever Shanghai International Import Expo was held, in fact started from this year and it also signify the commitment to opening-up policy which China has opened for the past 40 years. On this basis, Chinese President Xi Jinping established another globalization platform to the world called ‘Belt and Road Initiative’, which have completed 5 years.
This initiative encourages two-way trade and mutual investment between all countries, and aims to build an open world economy. In November at G20 conference in Argentina, President Xi has called upon the world to stand firm in openness and cooperation for the overall economic growth of the world.
At the present time, protectionism and unilateralism have been seen in the world, due to the reason, China’s reform and opening-up policy has become an advantage to the world. China is keen to open up with the international community on the basis of openness and mutual interest, and utilizing development opportunities through innovation and building a beautiful future.
In this context, Nepal is already a member of BRI and surely she will be benefited from it. The Neali people have big hope and expectation from the northern neighbor.
In the past, Nepali leaders and people have closely observed the huge phenomena of the Chinese leaders’ vision, leadership, commitment, and efforts of the Chinese people. Nepalis can also follow China’s successful development models. The most important thing to learn is how policies could be carried out by the government and people.
Let’s hope, China and Nepal could be able to build a ‘shared future community for China-Nepal’ within this century.

(Ajaya Aloukik is working as foreign expert in China Radio International, Beijing, China)

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