Steeled for the future thanks to opening-up

Imaginechina

With its first pile driven into the earth in Shanghai, Baosteel broke ground on December 23, 1978, just one day after the Communist Party of China closed its epoch-making meeting that ushered in the era of reform and opening-up.

“As a college student back then, I clearly remember a celebration was held in Beijing for China’s annual steel output exceeding 30 million tons for the first time,” said Chen Derong, who majored in steelmaking in 1978 and this year became the chairman of China Baowu Steel Group, Baosteel’s parent company.

“This year, the output could exceed 900 million tons,” Chen said.

China’s brisk economic growth over the past decades is undoubtedly one of the country’s most stunning feats.

Compared with global growth, China’s economy was in the fast lane between 1978 and 2017, expanding at an average annual rate of 9.5 percent, outpacing annual global growth at about 2.9 percent in the same period.

Reform and opening-up have “produced the greatest economic achievement in human history,” said John Ross, a researcher with the Chongyang Institute for Financial Studies, Renmin University of China. The view was shared by Shanghai-based researcher Song Luzheng, who said achieving the fast growth was only one of China’s “unprecedented miracles in human history.”

Others were the largest economic and social transformation, and “the largest industrialization at a fast pace,” amid the country’s peaceful rise.

To make the economy more balanced and sustainable, the country has continued to optimize its economic structure toward a growth model driven more by consumer spending, innovation and services while weaning it off over-reliance on exports and investment.

Another remarkable achievement was poverty reduction, Ross said, pointing out that China’s commitment to lifting all its rural poor out of poverty by 2020 “carries great significance for China and even the whole world.”

World Bank data showed that China lifted 853 million people out of poverty from 1981 to 2013, accounting for more than 70 percent of the world’s total poverty reduction figure.

There are several factors behind China’s economic and social marvels. Tu Xinquan, a professor at the University of International Business and Economics, said the most important reason behind China’s economic and social marvels is the leadership of the CPC.

With the landmark decision to start the reform and opening-up, the CPC was able to bring the nation’s development back on the right track, which needed political courage and wisdom, Tu added.

Tu also attributed the stunning progress to Chinese people being both industrious and frugal, which allowed them to create and accumulate wealth.

“The favorable conditions created by the reform and opening-up gave full play to such traits of the people,” Tu said.

Song also mentioned factors including a large and educated workforce, a high savings ratio, as well as the country’s distinctive political system that allows it to push reforms in the long-term interests of the nation and the people.

The miracles the country attained in past decades are unparalleled compared with the history of Western modernization.

“The biggest difference between the modernization paths of China and Western countries is the way of accumulating capital,” Tu said.

“It is undoubted that China’s rise is peaceful as it did not take advantage of or bully other countries.”

A winner-takes-all approach has never been an option for China, which pursues open, innovative and inclusive development that benefits everyone.

China’s fast growing and open consumer market has provided manufacturers and service providers with an enormous opportunity, said Morgan Stanley economist Robin Xing.

“The reform and opening-up integrated the country’s huge labor market into the global industrial chain, which boosted the productivity of the world economy while bringing a low-cost advantage,” Xing said.

China has emerged as the biggest driver of the global economy, contributing 27.8 percent of world growth last year, more than the contribution of the United States and Japan combined. In 1978, the ratio was just 3.1 percent.

Between 1979 and 2017, the country’s average annual contribution to global growth was 18.4 percent, the second-largest in the world.

While achieving development of its own, China has constantly provided aid to developing countries, such as those in Africa, with no political strings, said Lian Ping, an economist with the Bank of Communications.

Having grown up with reform and opening-up, Baosteel has not only experienced the achievements of the past 40 years but also been a part of them.

“At least six out of the 10 tallest skyscrapers in Shanghai were built with our steel,” Chen said with pride.