<p>Institutional openness is critical for advancing high-level external openness and significantly contributes to the transition of “Made in China” within the global value chain. This paper examines the impact of institutional openness on the export products quality using micro-level data from Chinese manufacturing firms. The findings show that institutional openness enhances export product quality. The effects are more pronounced in eastern regions, ongoing firms, non-state-owned enterprises, and those engaged in mixed trade. Further analysis indicates that institutional openness improves export product quality by reducing transaction costs, boosting technological innovation, and deepening the division of labor. Informal systems can have a debilitating effect on this effect. Additionally, it promotes value chain elevation by increasing the variety of imported intermediate goods and improving firms’ positions in the GVC production chain. These conclusions provide practical implications to maximize institutional openness effects on global value chain upgrading.</p>