International Open Access Journal Platform

1 Introduction

In today’s world, the wave of globalization is evolving in depth, and the economic and social development of all countries is deeply intertwined and interdependent, forming an inseparable community of shared future for humanity. The Fourth Plenary Session of the 20th Central Committee of the Communist Party of China made a major strategic deployment to “expand high-level opening-up and create a new landscape of win-win cooperation.” General Secretary Xi Jinping pointed out that “China has always adhered to the basic national policy of opening-up and has promoted the building of an open world economy through concrete actions.” Mutual benefit, win-win results, and coordinated cooperation have become inevitable choices in accordance with the trend of the times, and opening up has thus become a fundamental path for a country to achieve high-quality development. High-level opening-up is by no means a unprincipled passive accommodation, nor a coerced incorporation driven by external forces; rather, it is an opening-up based on a country’s own development reality and characterized by grasping the initiative. Looking back at history, the question of why old China was passively incorporated into the capitalist world market, and what internal mechanisms lay behind this process, has become a key issue for understanding the importance of initiative in opening-up, urgently requiring in-depth analysis guided by Marxist world market theory. In Marx and Engels on China, Marx and Engels profoundly analyzed the historical circumstances in which modern China was passively incorporated into the expanding capitalist world market, revealing the predicament and suffering old China faced due to the loss of initiative in opening up. This humiliating history is not only a mirror of modern China’s development, but also provides profound enlightenment for contemporary China’s opening-up practice: only by adhering to the independent status of opening-up and firmly grasping the initiative of the process of opening-up can a country achieve the organic unity of its own development and global win-win outcomes in the course of deeply integrating into the world market.

2 World Market Theory and the Analysis of Incorporation Modes

2.1 A Brief Analysis of the Concept of the World Market

In Marxist theory, the world market is not merely an international trade market, but a global market system relative to a country’s domestic market; it closely links the peoples and civilizations of all countries, and “large-scale industry established the world market, which has closely linked the peoples of all countries, especially the peoples of the civilized countries, so that each country’s people are affected by what happens in another country.”(Marx, & Engels, 2012) The academic community further divides the world market into two levels: narrow and broad. In the narrow sense, the world market is the arena and exchange relations of commodity exchange formed by countries through foreign trade and economic cooperation; “it is a commodity exchange place established by the countries of the world through mutual foreign trade and economic cooperation; it is not only a factor in the international circulation process, reflecting international commodity exchange relations, but also an extension of the domestic markets of all countries.”(Tang, 1995) In the broad sense, it encompasses the overall global market that transcends national borders, and even “the totality of capitalist economic relations on a world scale or the sum of bourgeois society.”(Zhang, 2016) In short, the world market is a complete world system of “production-division of labor-exchange” formed under the conditions of capitalist development and based on universal intercourse.

In terms of its generative logic, the formation of the world market is a systematic historical process jointly driven by the development of productive forces, the expansion of the division of labor, and capital expansion (Sun, 2006). The leap of productive forces promotes the expansion of the division of labor and the expansion of the scope of intercourse, thereby breaking through the boundaries of the domestic market; the improvement of transportation and communication conditions further accelerates the market globalization, and “the development of transportation and communications tools and the transport industry such as the telegraph, railways, and steamships became the material basis and important driving force for the formation of the world market.”(Yang, & Wang, 2018) At the same time, capital’s internal impulse to expand for profit and its search for outlets to crises continuously push outward the boundaries of the market; historical conditions such as the opening of new sea routes and colonial development further caused the scope of exchange to expand from regional markets to the world market.

At the same time, the world market contains significant internal contradictions. On the one hand, the world market uses universal intercourse as a link, breaking down geographical isolation and national barriers, promoting the deep exchange of production division of labor, trade contacts, and technological diffusion among countries, and providing historical opportunities for the global development of productive forces and the overall evolution of human civilization (Li, & Lin, 2025). On the other hand, the world market takes capital as the competing subject, and the profit-seeking nature of capital and the competitive mechanism are very likely to generate structural problems such as global development imbalance, hegemonic domination, and exploitation and dependence; at the same time, the deep interweaving of the economies of all countries makes capitalist crises break through regional limitations, showing stronger world character and spillover character, further aggravating the instability of the global economy. Therefore, in understanding and applying Marxist theories related to the world market, it is necessary to grasp its historical role of “promoting universal intercourse and the development of productive forces,” and also to prevent its structural risks of “imbalanced development, crisis spillovers, and rule hegemony”. In practice, it is even more necessary to employ higher-level opening-up governance—such as multilateral cooperation, fairness of rules and order reshaping, promoting balanced development and enhancing systemic resilience—to guide the world market to operate in a more fair, equitable, inclusive and open direction.

2.2 Typological Analysis of Incorporation Modes

In research related to the world market, if analysis is limited only to superficial descriptions of whether a country “enters” the world market or the “degree of entry”, it is often difficult to reveal the power asymmetry that different countries face when incorporated into the world market system and the structural consequences derived from them. Based on this, it is necessary to further shift the analytical focus from the factual judgment of “whether to enter the world market” to the mechanism analysis framework of “in what way to be incorporated into the world market”, so as to deepen the understanding of the logic of participation in the world market and the quality of opening-up.

This analytical framework can be elucidated from three interrelated dimensions. The first is rule status, which refers to whether a country has rule-making power and bargaining power in the world market. Relevant research points out that the commodity exchange system and rules of the world market have long been constructed under the dominance of developed capitalist countries, forming the old international economic order and potentially harming the interests of developing countries. Thus, “whether it can participate equally at the level of rules” becomes the primary indicator to measure the mode of incorporation. At the same time, in contemporary world market competition, rule power is also manifested through the use of rule tools such as intellectual property rights, standards, and agreements, making rule-making power an important lever for shaping the development space of other countries. The second is the exchange structure, which refers to the specific form of trade structure, industrial position, and benefit distribution within the global division of labor system. Even if a country “enters” the world market, it may still be locked at the low end of the value chain, obtaining a limited value share, thereby forming a dependent development pattern and structural inequality. This requires us to concretize the “mode of incorporation” by inspecting the position in the industrial chain, the way value is realized, and the degree to which domestic development capacity is cultivated. It also requires us to note whether developing countries can cultivate domestic market mechanisms while utilizing the world market and achieve effective integration with the international market. The third is risk transmission, which refers to the systemic vulnerability brought about by crisis spillovers and financial and trade shocks. The high connectivity of the world market makes a single market crisis likely to be transmitted globally with a domino effect. The worldwide spread of crises not only impacts growth but also weakens the risk-resisting capacity of developing countries. Therefore, the connotation of “mode of incorporation” should also extend to a country’s degree of risk exposure, risk buffering capacity, and crisis governance capacity in the face of external shocks, with the core being to examine how a country reduces the impact of external risks on the domestic economic system through institutional design and mechanism construction.

This enlightens us that for contemporary countries to promote opening-up, the key lies not in simply expanding the scale of opening-up, but in improving the independent status of opening-up. This involves enhancing participation and negotiation abilities in rules, promoting the optimization of division-of-labor position and benefit structure, and building resilience and risk management systems oriented toward external shocks in governance, so as to realize high-quality and sustainable integration into the world market.

2.3 The Historical Narrative of Old China’s Passive Incorporation into the World Market in Marx and Engels on China

In Marx and Engels on China, Marx and Engels took the drastic changes in Sino-foreign relations before and after the two Opium Wars and the shift in the pattern of trade with China as their entry point, revealing the passivity, coerciveness, and inequality of old China’s incorporation into the world market. This “incorporation” was not derived from old China’s active opening-up and autonomous integration based on its own development needs, but rather resulted from Western powers incorporating it into the capitalist world market by means of military aggression and unequal treaties. Under the dual heavy pressure of external power and rules, old China’s existing economic and social structure suffered a profound shock. The traditional small peasant economy and its related production and living order were continuously disintegrated, state sovereignty and institutional regulatory space were also significantly reduced, and it was thus locked into a dependent position within the international division of labor system.

The core of “passive incorporation” is that old China lost the right of autonomous choice to participate in the world market, and Western powers severely compressed its institutional development space. Marx and Engels pointed out that old China long utilized the mode of production combining a small peasant economy and household handicrafts as the foundation of its entire social structure. As a huge empire, China in the late Qing period long stayed in a closed and self-secluded state, “a great empire, with a population amounting to nearly one-third of the human race, pursued a closed-door policy, and thus tried to deceive itself with a delusion of celestial perfection”(CCTB, 2018: 70). Therefore, the backward economic structure and limited degree of commodification, as well as the late Qing government’s closed-door policy, weakened old China’s contact with the world market; as Marx and Engels pointed out, this state of “insulating itself from the world” made it difficult for China to form an autonomous space of choice in the face of the expansion of the world market. After Western powers broke the closure with force, China did not obtain the right of equal participation. Instead, under the constraints of unequal treaties, it lost key economic sovereignty, such as tariff autonomy. The original foreign trade management system was distorted and even disintegrated, and the institutional development space shrank sharply, thus demonstrating passive incorporation into the world market.

3 Analysis of the Three Mechanisms of Old China’s Passive Incorporation into the World Market

Building upon the clarification of the world market’s core connotation and the construction of a typology for a country’s incorporation paths and a mechanism analysis framework, one can rely on the historical narrative and critical analysis in Marx and Engels on old China’s forced incorporation into the world market. This allows for a focus on the historical circumstances of the late Qing government’s corrupt rule and the loss of state sovereignty, leading to a deep analysis of the internal logic and practical forms of old China’s passive incorporation into the world market, and subsequently refining its three core mechanisms: the mechanism of coerced opening-up, the mechanism of distorted exchange, and the mechanism of risk spillover. The systematic analysis and historical reflection on these three mechanisms can not only profoundly reveal the destructive essence of the passive incorporation model to the national economic structure, sovereignty, integrity, and social development, but also provide a valuable historical mirror for contemporary China’s opening-up. “Taking history as a mirror, one can know the rise and fall.” Only by clarifying the gains and losses of modern China’s opening-up and seeing through the deep predicament of passive incorporation can historical wisdom and practical enlightenment be injected into consolidating the foundation of socialist modernization, comprehensively improving the level of opening-up, continuously promoting high-quality development, and realizing the dialectical unity of opening-up and autonomy, development and security.

3.1 The Mechanism of Coerced Opening-Up

Old China’s passive incorporation into the world market manifests as a mechanism of coerced opening-up, whose essence is a non-voluntary opening-up model in which political oppression and military coercion are the core forms in the process of capitalist world market expansion. This coercive opening-up is not the result of friendly and mutually beneficial trade, but rather a predatory mechanism built upon violent wars and unequal treaties. Britain and other Western powers took the expansion of trade with China (opium smuggling and the dumping of manufactured goods) as the initial demand. They relied on the developmental advantage of industrial civilization over traditional agricultural civilization and the absolute imbalance in the power to formulate international rules, breaking the closed pattern of old China through two Opium Wars and other “aggressive wars”(CCTB, 2018: 95). Subsequently, they used unequal treaties such as the Treaty of Nanjing and the Treaty of Tianjin as institutional tools, employing predatory clauses such as the opening of treaty ports, tariff agreements, and consular jurisdiction, to complete the vicious cycle from simple trade demands to rigid institutional constraints. Marx clearly pointed out that this war was “an extremely unjust war” and occurred “under a pretext which will not bear scrutiny”(CCTB, 2018: 54), profoundly exposing its colonial aggression nature and confirming the unjust and predatory core of the mechanism of coerced opening-up.

The external driving force of the mechanism of coerced opening-up stems precisely from the internal impulse of capitalism to expand toward the world market. After the Industrial Revolution, “Britain needs to open up new markets or expand old markets”(CCTB, 2018: 8) to absorb excess capacity. China’s huge population base and potential market space happened to meet Britain’s strategic demand for overseas market expansion, making it the core target of Britain in global market competition. Marx pointed out that the premise for the operation of this mechanism lies in the huge disparity in comprehensive national strength between China and Britain, as well as the extreme inequality in international discourse power. China’s “handicraft industry cannot withstand the competition of machinery”(CCTB, 2018: 133). Moreover, the commodity exchange system and rules of the world market have long been constructed under the dominance of developed capitalist countries, and the international economic order formed in this background will inevitably directly harm the fundamental interests of old China.

The direct result of the operation of this mechanism is that old China’s sovereignty was severely damaged: territory was ceded, tariff autonomy was lost, and it was forced to accept unequal rules dominated by the powers. Consequently, the process of opening up was completely shaped by external forces. More importantly, this process clearly confirms that opening up does not equate to equality and mutual benefit. The opening-up dominated by the powers had distinct class characteristics (serving the colonial expansion demands of the bourgeoisie) and predatory characteristics (relying on military force). Engels bluntly stated that Britain and other powers were “civilization mongers who shoot red-hot shells into defenseless cities, kill men and rape women”(CCTB, 2018: 64), and their so-called “trade” is essentially plunder. The institutional imprint left by this passive incorporation was particularly far-reaching. The long-term lack of rule-making power always placed old China in a dominated position within the world market. As Marx pointed out, “the closed-door policy was the primary condition for the survival of traditional China, and when this state of isolation was violently broken by Britain, what followed was inevitably a process of disintegration”(CCTB, 2018: 8). Unable to establish an independent trade and development system that conformed to its own interests, it thus fell for a long time into a predicament of passive opening-up and inability to develop autonomously, profoundly affecting the trajectory of modern China’s development.

3.2 The Mechanism of Distorted Exchange

Old China’s passive incorporation into the world market manifested as a mechanism of distorted exchange, whose essence was an unequal exchange system dominated by predatory accumulation logic under the expansion of the capitalist world market, which completely distorted China’s trade structure and development path. The powers took the opium trade as the core, supplemented by unequal commodity exchange, which completely deviated from the principle of equivalent exchange. Marx clearly pointed out that Britain’s opium trade “whether in respect to the miserable conflicts of which it may be said to form the pivot, or in respect to the effects it has produced on all relations between the East and the West, is quite unparalleled in the records of history”(CCTB, 2018: 69). This unequal trade was fundamentally destined to result in China’s passivity and loss. Unlike normal development-oriented trade based on mutual benefit and win-win results, the distorted trade of old China precisely denied this. The powers completely controlled the trade dominance; the Qing government had neither pricing power nor the power to formulate trade rules, and could only passively accept hegemonic pricing determined by Western powers; the trade content served the predatory demands of the Western powers, with opium becoming the core trade commodity; the distribution of trade gains was extremely uneven, with China bearing all losses and the powers taking excess profits. This winner-takes-all pattern formed by one-way plunder destroyed the possibility of mutually beneficial exchange.

The powers claimed that opening China’s door would realize the dividend of commodity dumping. Still, the actual situation was that “since the conclusion of the treaty of 1842, the amount of British manufactured goods imported into China has, on the whole, remained stagnant”.(CCTB, 2018: 77) The collapse of this speculative expectation did not make the powers give up plunder. Instead, it further strengthened their dependence on the opium trade, because “the Chinese cannot buy both goods and poison; under present conditions, to extend the trade with China is to extend the opium trade.”(CCTB, 2018: 69) This distorted exchange structure became increasingly entrenched. The direct economic consequence of distorted trade was currency disorder and a fiscal crisis. The opium trade “year after year fills the British Exchequer by destroying lives and corrupting morals”, causing China to experience “a large-scale silver outflow, a shortage of silver reserves and an empty national treasury, so that the whole country fell into a fiscal crisis and the economy approached collapse”(CCTB, 2018: 54); the monetary imbalance of the appreciation of silver and depreciation of copper coins increased the burden on people’s livelihood, and peasants and handicraftsmen suffered double exploitation, further disintegrating the domestic economic foundation; fiscal emptiness forced the Qing government to increase taxes, “the old taxes became heavier and more difficult to bear, and new taxes were added in addition to the old taxes”(CCTB, 2018: 7), forming a vicious cycle of trade deficits, fiscal crisis, and livelihood deterioration.

The deeper structural trap was that the more passive the opening-up, the more difficult it was for the country to break free from the shackles of a dependent development pattern. This passive opening up did not bring development opportunities. Instead, it continuously dismantled old China’s traditional economic foundation and governance system through distorted trade, blocking the possibility for old China to pursue an independent path to modernization. The root of all this was the predatory essence inherent in the mechanism of distorted exchange and the asymmetry of the power structure under the internal logic of capitalist world market expansion. Under this mechanism, old China, passively incorporated, was bound to be unable to obtain equal development opportunities and could only become a sacrifice for the primitive accumulation of the powers.

3.3 The Mechanism of Risk Spillover

Old China’s passive incorporation into the world market manifested as a mechanism of risk spillover, whose core was the inherent crisis nature and interconnection of the world market. The world market was a volatile system full of cyclical fluctuations, speculative bubbles, and violent shocks. The internal contradictions of capitalist expansion inevitably led to crisis outbreaks, and old China, passively incorporated, was destined to become the object of capitalist crisis spillover. The essence of this linked crisis was the multidimensional transmission of trade, finance, and politics. At the trade level, demand fluctuations and price shocks in the world market directly impacted old China’s foreign trade structure; at the financial level, the disorderly flow of silver destroyed the monetary system and undermined fiscal stability; at the political level, persistent domestic unrest triggered by external shocks further weakened the country’s state governance capacity and formed a risk cycle.

The operation of the risk spillover mechanism follows a complete logic chain of “external crisis first being transmitted through trade channels (such as commodity demand fluctuations and price shocks), then being amplified through deterioration of financial conditions (such as silver outflows and currency disorder) to intensify domestic contradictions, and finally completing comprehensive risk diffusion through political turmoil”. This risk spillover was not a one-way transmission; it also had a significant reverse impact on capitalist countries. China’s social unrest, in turn, impacted the international pattern and the contradictions of major countries. Marx predicted that “the Chinese revolution will throw the spark into the combustible mine of the present industrial system, and explode the long-prepared general crisis”(CCTB, 2018: 11), which breaks the powers’ stable expectations of the global market and intensifies the internal contradictions of European capitalist countries. From the perspective of historical consequences, this mechanism caused China to completely fall into the abyss of a semi-colonial and semi-feudal society; the disintegration of the natural economy and the stunted development of national industry occurred simultaneously, and it was unable to form an economic foundation to resist external risks. This process profoundly reveals the cruel reality that “incorporation means exposure”. A country passively incorporated into the world market, due to the lack of autonomous choice regarding the pace of opening up and risk buffering mechanisms, inevitably showed high vulnerability in its economic and social system. Old China had neither the ability to resist the impact of foreign commodities nor to respond to financial risks such as silver outflows and crisis transmission, and was even less able to resolve the social and political turmoil caused by this. Therefore, risk governance capacity must be embedded in the process of opening up. Only by grasping the initiative of opening up and building an autonomous economic system and rule system could a country resist external risks while participating in the world market.

3.4 The Coupling Logic and Systemic Consequences of the Three Mechanisms

In Marx and Engels on China, the three mechanisms of old China’s passive incorporation into the world market were not an isolated parallel relationship, but rather showed a deeply coupled relationship of premise, core, and result, jointly constructing the development trap of passive dependence for old China. Its systemic consequences completely reshaped the historical trajectory of modern China, confirming the essential judgment of Marxist world market theory regarding capitalist expansion.

The coupling logic of the three mechanisms showed distinct progression. The mechanism of coerced opening-up was the premise and foundation of the coupling. It utilized violent means of war and unequal treaties to break the closed state of old China and open up the institutional channel for the operation of subsequent mechanisms. The mechanism of distorted exchange was the core and link of the coupling. It transformed the institutional arrangements of coercive opening-up into concrete economic predation, and at the same time provided a carrier for the mechanism of risk spillover. The mechanism of risk spillover was the result and amplifier of the coupling. It transformed the structural contradictions caused by economic distortion into systemic crises, and in turn intensified the strength of the first two mechanisms. The three finally form a vicious cycle of coerced opening-up, solidifying distorted exchange, distorted exchange breeding systemic risks, and systemic risks strengthening coerced control, constituting a path dependence that is difficult to break.

The coupled operation of the three mechanisms has produced far-reaching, deep-seated systemic consequences, destroying the possibility of old China’s autonomous development. At the level of sovereignty, the mechanism of coerced opening-up directly led to territorial occupation, the loss of tariff autonomy, and the establishment of consular jurisdiction, reducing China to a semi-colonial and semi-feudal country. “The imperial authorities, customs officials, and all officials were made morally corrupt by the British.”(CCTB, 2018: 71) The impairment of national sovereignty rendered China unable to build an autonomous development system. The loss of sovereignty hampered the possibility of the development of productive forces in old China. The mechanism of distorted exchange destroyed the traditional natural economy and national handicrafts. The massive outflow of silver caused the Qing government to experience a serious fiscal crisis. Old China was locked at the bottom of the international division of labor, becoming a source of raw material plunder and an opium dumping ground for Western powers. The three mechanisms jointly led to the absence of rules and the failure of governance. The unequal rules dominated by the powers replaced China’s original governance system, and the corruption bred by distorted trade further weakened the state’s governance capacity. At the level of the development path, the dependent trap formed by the coupled mechanisms completely blocked the process of old China’s autonomous modernization. The more passive the opening-up, the more difficult it was to realize autonomous development. Old China could neither accumulate capital through foreign trade nor foster an independent national industry, and was even less able to build a risk defense system. It could only sink into a vicious cycle of “passive opening-up leading to national decline”.

The coupling of the three mechanisms is precisely the concentrated manifestation of capitalism’s world market expansion logic. In order to realize capital appreciation, the bourgeoisie “must necessarily use violence to break down regional barriers and forcibly incorporate developing countries into their world system”. This incorporation is essentially “pursuing economic interests at the expense of the legitimate rights and interests of the oppressed nations”(CCTB, 2018: 6). This profoundly enlightens that the core of opening-up lies not in “whether to enter” the world market, but in “how to enter autonomously”. Only by grasping the initiative of opening up, constructing an equal rule system, and cultivating endogenous risk governance capacity can one avoid becoming a sacrifice for capitalist expansion. This also provides an extremely precious historical reference for contemporary China’s opening-up.

4 Contemporary Implications and the Path of Opening-Up in the New Era

The essence of old China’s “passive incorporation” into the world market is that the country lost the right of autonomous choice to join the world market. Under the military coercion of Western powers and the constraints of unequal treaties, the institutional development space was severely compressed, and external forces completely shaped the development path. As revealed in Marx and Engels on China, this incorporation was not an autonomous choice based on one’s own development needs, but a coerced result of capitalist world market expansion, ultimately leading to the loss of national sovereignty, the collapse of the economic structure, and falling into the predicament of a dependent development pattern. The core turn of “active participation” lies in breaking the superficial cognition of “whether to enter the world market” and shifting the focus to the in-depth exploration of “how to enter autonomously”. This turn is, on the basis of profoundly grasping the duality of the world market, to realize the change from passive accommodation to active shaping through institutional design and capacity building. Taking the three mechanisms of old China’s passive incorporation—coerced opening-up, distorted exchange, and risk spillover—as lessons, correspondingly building the rule capacity, structural capacity, and governance capacity required by contemporary opening-up provides practical guidance for high-level opening-up.

4.1 Proactively Grasp the Rules of Opening-Up

From the perspective of historical mechanisms, the core of the mechanism of coerced opening-up was that Western powers utilized violent tools to break the closed state of old China, resulting in the impairment of national sovereignty and the severe squeezing of institutional development space. This historical predicament still exists in a covert form in the contemporary era. Against the backdrop that international rules have long been dominated by developed capitalist countries, external pressure, unreasonable rule constraints, and a mismatch in the rhythm of opening-up may lead some countries to again fall into the trap of “passive opening-up”. At present, unilateralist forces in the international arena, in the name of rule reconstruction, forcibly promote standards and agreements that conform to their own interests, thereby attempting to compress the institutional development space of developing countries. This situation bears an essential similarity to the rule hegemony faced by modern China.

To cope with this risk, it is necessary to consolidate the independent status of opening-up and grasp strategic initiative in the process of opening-up. First, strengthen institutional supply to stabilize market expectations. The core of opening-up lies in constructing an institutional system for opening-up that is “predictable, enforceable, and adjustable”. Through clear legal norms, transparent policy processes, and scientific adjustment mechanisms, it not only protects the legitimate rights and interests of foreign-funded enterprises but also ensures that the process of opening-up always advances within an independent and controllable framework. Second, adhere to strategic overall planning to control the pace of opening up. The scope, timing and combination of opening-up tools need to be independently determined based on the country’s development reality, rather than passively catering to external demands. According to different fields’ industrial competitiveness, national security needs, and development stages, differentiated opening-up strategies should be formulated. Third, take domestic development as the fundamental footing. The ultimate purpose of opening up is to serve the goals of socialist modernization. It should always adhere to transforming opening-up dividends into the driving force for domestic industrial upgrading, technological innovation, and people’s livelihood improvement, and avoid falling into the misorientation of opening-up for the sake of opening-up.

4.2 Construct a Fair Exchange Structure

The historical mechanism of distorted exchange is, in essence, an unequal exchange system under the expansion of the capitalist world market, whose core features are a distorted trade structure and unbalanced returns. In contemporary times, some countries that pursue one-sided opening-up only focus on trade scale expansion, ignoring industrial structure upgrading and the cultivation of core capabilities, resulting in problems such as industrial hollowing, technological dependence, and value chain lock-in. Some developing countries have long relied on the export of low-value-added primary resource-intensive products and lack the capacity for industrial chain extension and technological innovation. Although they have entered the world market, they have always been in a weak position in the distribution of returns and are unable to realize substantive development.

To break this predicament, it is necessary to improve the quality of opening-up and rationalize the income distribution structure through structural upgrading. First, take moving up in the industrial chain position as the core goal. Strive to achieve breakthroughs in key and core technology fields, and promote industries to climb to the middle and high-end links of the global value chain. By increasing R&D investment, improving the scientific and technological innovation system, and cultivating innovative enterprises, competitive advantages can be formed in strategic emerging industries such as high-end manufacturing, digital economy, and biomedicine, thereby changing the long-term situation of being in low-end links such as processing and assembly. Second, consider upgrading the way of value realization as an important approach. On the one hand, actively participate in the formulation of international rules and standards, transforming China’s technological advantages and industrial characteristics into international standards, and enhancing the right to speak in the formulation of rules for the global value chain. On the other hand, cultivate independent brands with international influence, raising the added value of products through independent brand building, and ensuring that gains from opening up are retained domestically to a greater extent. Third, consider the in-depth integration of the domestic great cycle and opening-up as the guarantee. Give full play to the advantage of China’s super-large domestic market, closely combine opening-up with domestic market cultivation and industrial upgrading, and transform opening-up dividends into endogenous development momentum for domestic industries.

4.3 Enhance the Resilience of Risk Governance

The core of the historical risk spillover mechanism is that the crisis linkage of the world market continuously weakens old China’s risk-resisting capacity and triggers governance failure through multidimensional transmission of trade, finance, and politics. In contemporary times, the volatility of the global economy has increased markedly, and the influence of this risk spillover mechanism is more prominent. Risks such as supply chain disruptions, financial market volatility, and geopolitical conflicts are intertwined, posing higher requirements for the systemic resilience of China’s open economy.

To cope with this challenge, it is necessary to embed risk governance awareness and mechanisms into the process of opening up and ensure high-level opening up with systemic resilience. First, establish a sound, normalized and institutionalized risk identification and early warning system. Conduct regular risk exposure evaluation and analysis, and comprehensively inventory risks in China’s opening-up process in fields such as industrial security, financial stability, and technological dependence. Second, improve the risk buffering, emergency response and disposal mechanism. Establish a defense system against external shocks and enhance systemic risk resistance. By improving the social security system, establishing a national strategic material reserve system, and optimizing the structure of foreign exchange reserves, we can enhance the shock-bearing capacity of the national economy and society. By diversifying trade partners, optimizing industrial chain layouts, and expanding financial cooperation networks, dependence on a single market and a single channel can be reduced. Furthermore, establish cross-departmental and cross-regional crisis response and coordination mechanisms, clarify the division of responsibilities and procedural norms of emergency risk disposal, and improve the overall efficiency of crisis response and disposal. Third, promote the coordinated development of opening-up and security. While expanding opening-up, continuously improve the national security system and mechanisms, especially strengthening capacity building in areas such as economic security, science and technology security, and cyber security. By improving institutional systems such as foreign investment security review, anti-monopoly supervision, and cross-border data flow management, security risks that may arise in the process of opening-up can be prevented, and it can be ensured that the process of opening-up is always aligned with the bottom-line requirements of national security.

5 Summary

We are in an era of great changes unseen in a century. The international situation is complex, the global economic recovery remains sluggish, turbulence is intensifying, unilateralism and protectionism are on the rise, and the restructuring of global supply and industrial chains has brought many uncertainties. This poses unprecedented new challenges to the quality, sustainability, resilience and initiative of China’s opening-up drive. Looking back at history, the humiliating historical experience of old China’s passive incorporation into the capitalist world market is still fresh in our memory. The painful lessons of losing the right of independent choice, having institutional development space squeezed, and being subject to external control over the development path profoundly warn us that the core of opening-up lies in adhering to independence and self-determination. Facing the future, we must learn from history, firmly grasp historical initiative, resolutely abandon the opening-up model of passive accommodation, and unswervingly promote an opening-up drive based on China’s actual development conditions and guided by the principle of grasping strategic initiative and grasps strategic initiative. In the complex and changing international environment, we must always adhere to the bottom line of national security in the process of opening up and maintain firm confidence in promoting opening up, gather strong development synergy through high-quality, well-governed, independent opening-up, and lay a solid foundation for comprehensively building a great modern socialist country and for realizing the Chinese Dream of national rejuvenation.

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