Opinion | China’s long-term economic security relies on it being integrated with the rest of the world

Every country should pay attention to its own economic security, and China – as a rising power – has every reason to study its vulnerabilities with extra vigilance.

But in studying this issue, there’s an unhealthy tendency in China to confuse security with isolation. It is often taken for granted that China will be safer if the country has fewer demands from outside its borders. If this theory is correct, then China should pursue absolute self-sufficiency – particularly in the areas of grain, energy and chips – as it will be 100 per cent safe by cutting external reliance to zero.

The belief in self-sufficiency is deeply rooted in Chinese history and tradition. In millenniums of agrarian society, the safe and good way of living was to rely on your village or town for everything. Merchants were regarded as necessary evils and untrustworthy, particularly in foreign trade.

China’s self-sufficiency drive in modern history stems from its hostile surroundings. In 1939, Chairman Mao Zedong called upon the army and people to “produce ample food and clothing with our own hands” after supplies were cut off during Japan’s war against China. In 1949, the People’s Republic was born under Western sanctions, so an inward-looking policy was almost the only option.

Some policies under Mao, including the Great Leap Forward with its target of boosting steel output, and a farming policy aimed at increasing grain output, shared the same mentality; the economy would be safer if China could produce enough of its own key materials.

Public discussion on economic security gained prominence in recent years, after the US trade war against China and Washington’s technology restrictions laid bare the risks of relying on key supplies from unfriendly hands. Western sanctions imposed on Russia following its invasion of Ukraine have further rung alarm bells.

But China should never try to seek security by going back to isolationism, no matter how “safe” it may look on the surface. In 1968, the Chinese government proudly told its people that the country did not have a penny of external debt or a penny of domestic debt, citing the health and security of an isolated economy. But in retrospect, China’s debt reduction efforts also cut financial links with the rest of the world, resulting in a lot of missed chances.