Increasing economic interdependence and globalization are in common interest of all and outweigh ideological differences

Deng Xiaoping began a tour of southern China on Jan 18, 1992, just after the collapse of the former Soviet Union, delivering speeches that gave fresh impetus to the country's reform and opening-up. Two decades have passed since then and new challenges have emerged. It is time to learn from the past and adapt to the new circumstances.

The world has completed a transition - from war and revolution to peace and development. A country can now source its resources from across the world to expedite its development if it succeeds in adapting to the new circumstances, but it will decline and be marginalized if it fails to do so. Unfortunately, many countries are having problems adapting to the new situation.

Some Western countries, despite their close ties with China, regard it as a threat and attempt to contain its peaceful rise and thus maintain their huge military spending. This harms their economic and social development.

Even some people in China question the wisdom of reform and opening-up, clinging to the old rhetoric of resisting the "peaceful evolution" plotted by the West, and hence, politicize and bestow ideological color on economic problems.

Such outdated views can be attributed to some people's inability to see the changes that have taken place over the past two decades and their inability to relinquish a Cold War mentality. They fail to understand that they should move beyond ideological confrontation to seek common interests and confront common challenges.

The world experienced two world wars and one Cold War in the 20th century and there have been regional wars and conflicts since 1992, including the Iraq and Afghanistan wars and the Libyan civil war, but none of the regional wars and conflicts represent an all-out confrontation between capitalism and socialism.

Increasing economic interdependence and much-improved productivity because of economic globalization have crossed the barriers of ideological and institutional differences and are the common interests of all countries. Likewise, the need to confront common challenges, including climate change, terrorism and financial crises, has shown how important it is to eliminate institutional differences. The new circumstances require all countries to shelve their ideological differences and join together to work out better ways to tackle global issues.

Economic globalization has been advancing since the end of the Cold War. While some countries have taken the initiative to become part of the global economy, others were already conditioned to do so. Many developing countries have shifted from agricultural to industrial economies or from industrial to service-based economies, and developed countries have further upgraded their service industry.

Take China for instance. Its per capita GDP has increased dramatically since reform and opening-up began more than three decades ago, especially over the past two decades. The country's per capita GDP jumped from less than $400 in 1992 to more than $4,000 in 2010, and it has lifted hundreds of millions of people out of poverty.

China's social structure has changed with its rapid pace of economic development, and the class conflict between the proletariat and the bourgeoisie has evolved into disagreements among varied social groups. This requires the country to innovate its social management to suit the changing times, for instance, by combining the use of the Internet and modern communications technologies.

Faced with new social conflicts, Chinese policymakers should deepen their understanding of the changes and balance the interests of different social groups. It is important to allocate more resources to help grassroots people to realize social equity and justice.

Lending ideological color to economic management has been the general problem with socialist countries in the past. This is because socialist countries, which grew out of capitalism or feudalism, tended to not only emphasize the advantages of socialism over capitalism, but also politicized and lent an ideological color to economic problems.

The truth is a country's macro-economy, industries and companies have their own laws of development, and to relate economic success in all its aspects to the superiority of socialism over capitalism goes against the law of economic development.

The time of war and revolution is over. So the ideological color that was splashed on economics should be washed off. If the confrontation between capitalism and socialism was the external factor that lent ideological color to economics, the current phase of less-than-important ideological differences should signify the beginning of ideologically free economics.

In times of peace, while pushing forward with its development in political, economic, cultural and other fields, China will encounter some problems that will require scientific assessment.

This is the time, therefore, for all countries to go beyond their ideological differences and make concerted efforts to resolve international issues and remember that riding against the tide of peaceful development will only leave a country marginalized.

The author is director of the Multinational Corporation Research Center at the Chinese Academy of International Trade and Economic Cooperation.

(China Daily 01/31/2012 page8)