Eric's Insight: Why has China made institutional opening-up a priority?

During the 14th Five-Year Plan period, China's opening-up strategy underwent profound innovation in paradigm, with institutional opening-up established as the core path to lead high-standard opening-up.　　

This strategic choice has not only reshaped China's new advantages in global competition but also provided historic opportunities for frontier provinces like Yunnan to reposition themselves in the broader national context and achieve leapfrog development.

Institutional opening-up is a systematic upgrade

The outline of China's 14th Five-Year Plan called for "steadily expanding institutional opening-up in rules, regulations, management, and standards." This was not merely a policy adjustment but a systematic strategic upgrade.

Key components included aligning with high-standard international economic and trade rules, expanding the opening-up of the service sector, refining systems such as export controls and the unreliable entity list to balance development and security, and placing greater emphasis on the modernization and international alignment of systems.

Why has China made institutional opening-up a priority?

The fundamental reason lies in the shift of the global competitive landscape from competition in goods to competition in rules. At the same time, as China's economic development enters a high-quality stage, there is an urgent need to use opening-up as a catalyst for triggering deeper reforms, breaking institutional and mechanistic barriers, and stimulating innovation.

Amidst the once-in-a-century changes, replacing temporary preferential policies with stable and predictable institutional environments can more effectively attract high-end global factor resources and ensure the security and resilience of industrial and supply chains.

Under the grand national blueprint for opening-up, Yunnan's 14th Five-Year Plan integrated its own development into the national strategy. Yunnan's planning focused on the core strategic positioning of "accelerating the construction of China's pivot of opening-up towards South and Southeast Asia."

The first was repositioning. Yunnan redefined itself as a "pioneer" and "hub" for opening-up, and it is no longer a geographical "periphery" and "passage", as was traditionally viewed in the past.

The second was platform development. The China (Yunnan) Pilot Free Trade Zone was upgraded to be a core engine, empowering it with a "pioneering and piloting" mission. The focus was on institutional innovation in areas such as facilitating investment and trade, financial opening and innovation, and socioeconomic development in border regions.

The third was path clarification. Yunnan emphasized on the "soft connectivity", which was to be realized through "institutional innovation" and "policy coordination." While advancing "hard connectivity" (e.g., the China-Laos Railway), the province paid greater attention to aligning rules and standards with neighboring countries.

Notably, the cross-province cooperation has fostered a community of opening-up. For instance, the Shanghai-Yunnan industrial park co-development mechanism was a great success. Under the mechanism, the two places jointly operated the China-Laos Railway international freight service. The mechanism brought into full play Shanghai's market economy strengths and Yunnan's logistical advantages, allowing them to explore markets in South and Southeast Asia together.

Prospects for Yunnan's role in the next five years

During the coming 15th Five-Year Plan period, China's advancement of institutional opening-up will get deeper, characterized by higher standards, broader fields, and deeper alignment. The country will likely access the CPTPP and DEPA, while actively participating in global rule-making in emerging areas like the digital economy, green and low-carbon initiatives, and intellectual property rights.

In the 14th and 15th Five-Year Plan periods, institutional opening-up has been and will be the strategic choice for China to respond to changes of the era of uncertainty and shape new development advantages.

With its unique regional location, Yunnan plays an irreplaceable role in China's landscape of new opening-up. By precisely aligning with national strategies and leveraging institutional innovation as a core driver, Yunnan has not only served the broader agenda for national opening-up but has also lifted its own open economy to a high-quality development stage.

Looking ahead, deepening institutional opening-up will remain fundamental for Yunnan to be the height of opening-up and to achieve high-quality development.

Writing by Shen Yuliang (Researcher at the Institute of World Economy, Shanghai Academy of Social Sciences); Editing by Zhang Ruogu, Han Chengyuan and Huang Yixian; Translating by Wang Shixue