Why is open economy inevitable?

China is celebrating the 40th anniversary of Deng Xiaoping’s “reform and opening up” policy. Deng’s reform is crucially important that it has changed the Chinese economic structure and improved a significant number of people’s living conditions and China’s world political status. Moreover, Deng’s reform should be appreciated by the world, as his policy successfully pulled a substantial proportion of the world population out of poverty.

Open economy is important that no country should close its economy and isolate itself from the outside world. Isolation is not rare to see throughout our human history that there were some governments which voluntarily decided to close their countries and isolate themselves from the rest of the world. Why were these countries able to isolate themselves from the rest of the world? Firstly, in the past, people did not have necessary level of technology to have sufficient access to the outside world. Secondly, people were living in a relatively self-sufficient environment. When people were self-sufficient, they did not have the need to get an access to the rest of the world. Thirdly, information asymmetry was another important reason of isolation. In the past, people did not know about the outside world, then it was too risk for them to access to the outside world.

However, things have changed. The inventions of new technology, especially the Internet and transportation, have corrected the factors mentioned above. People are no longer able to be self-sufficient, as people are needing much more than they were in the past. Overall, isolating oneself from the rest of the world is no longer an option.