©2018 Institute of World Economics and Politics, Chinese Academy of Social Sciences
China & World Economy / 23–49, Vol. 26, No. 2, 2018
China’s Opening up after 40 Years: Standing at a
Historic Turning Point
Jiandong Ju, Xinding Yu*
This paper comprehensively reviews China’s openness since 1978 from three aspects:
trade, foreign investment and global production sharing. We point out that the economic
development of China is now standing at a historic turning point. Specically, economic
changes in China are discussed from four dimensions: (i) from China being a world
assembly line to a world manufacturing powerhouse; (ii) from China being a world
capital receiver to a world investor; (iii) from China being a world factory to a world
market; and (iv) from the situation of “made in China” to “innovated in China.” At
the same time, the global economic system has also reached a turning point. A “North
America–Europe–Asia” tri-polar system has formed, in which the USA, Germany and
China, respectively, serve as the regional core economies.
Key words: foreign direct investment, global production sharing, reform and opening-up
policy, trade, turning point
JEL codes: F10, F15, O10
Following the implementation of the reform and opening-up policy in 1978, China’s
“growth miracle” continued for the next four decades, with remarkable changes in terms
of economic size, economic structure as well as China’s role in the world economy.
The growth miracle of China has long been a hot topic in economic research (Lin et al.
1996; Feenstra and Wei, 2012). The opening up of trade and investment has provided
essential support for the development of China’s economy. As depicted in the two-
*Jiandong Ju, Professor, PBC School of Finance, Tsinghua University, China. Email: email@example.com;
Xinding Yu, Associate Professor, School of International Trade and Economics, University of International
Business and Economics, China. Email: firstname.lastname@example.org. We thank Yacheng Yang and Chunrui Liu from
Tsinghua University for providing very helpful research assistance. This work was supported by the National
Natural Science Foundation of China (No. 71503047), the Beijing Social Science Foundation (No. 15JGC162),
and the Fundamental Research Funds for the Central Universities of the University of International Business and
Economics (No. 16YQ02).
In this paper, “China” refers to “Chinese mainland.”