Open Door Policy

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An open-door policy basically implies that there are no barriers whatsoever to whatever activity is being proposed. With respect to businesses, it is used to imply that the bosses are open to people who are coming into his or her office so as to talk. Internationally, it implies that the entry into any particular country is easy, although that particular expression is usually only qualified to specify as to what or to whom it ultimately applies.

Open Door Policy

Open Door Policy

Here, we will be providing you a basic overview of the said policy.

  • This policy was adopted in the late 1970s by the then Chinese leadership which was headed by Deng Xiaoping.
  • To understand the nitty-gritty of an open-door policy, it is imperative to know what actually happened before that.
  • After the year 1949 when the CPC had won the civil war which was fought over the Nationalists, China ultimately became a communist state and it isolated itself from the West, although it generally had strong ties with all the socialist countries like the USSR and North Korea. The proposed long-term isolation of China from the West and the followed political turbulence had brought suffering and poverty of the Chinese people.
  • After Mao’s demise, Deng had come into power and he had called for a shift from Mao’s class struggle to fuel the economic development.
  • In December of 1978, the CPC had held a historic meeting out in Beijing which had formally announced that China will be putting the ideology aside and ultimately focus on economic development instead so as to improve the livelihoods of the Chinese people.
  • China’s door has hence been left open for over four decades and the new and current Chinese leadership has vowed repeatedly to let it continue to be the same and to keep the door open.
  • Under this open-door policy, the Chinese government has closely been working extremely hard so as to promote China’s current and future engagements with the rest of the world by more or less welcoming any foreign investment and supporting many study abroad programs.
  • It is vital to point out here that China’s opening up is a two-way lane, which means that it is not only encouraging the foreigners to come over to China for business but it also very encouraging for the Chinese people to go abroad, for purposes like business, trade, education, tourism, etc.

However, China’s open-door policy cannot be said to be completely open. For example, there seem to be certain restrictions for some foreign investments in certain business areas such as finance as well as electric power. Furthermore, many of the foreign internet services are blocked in China, particularly the ones such as Facebook and Google, despite Google being freely accessible before 2010.

Overall, the open-door policy of China has been very successful when we can consider the fact that China has ultimately become the world’s second-largest economy.

Read More: Monetary Policy

Amidst the widespread concern over the protectionism since USA’s President Trump’s inauguration, the role that China ultimately plays are vitally important to the entire global economy, and President Xi of China will also keep China’s door open, as he had reassured the foreign leaders and the investors in the Davos World Economic Forum held in January.

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