China’s “dual circulation” development paradigm, a major strategy championed by Chinese President Xi Jinping and featuring domestic and overseas markets reinforcing each other with the domestic market as the mainstay, is under the spotlight during the country’s ongoing annual “two sessions.”
The 14th Five-Year Plan (2021-2025), a draft outline of which has been submitted to the country’s top legislature and political advisory body for deliberation and discussion, will further clarify how China will implement the “dual circulation” strategy and achieve high-quality development.
Unleashing domestic demand is crucial to driving China’s growth, but this new development paradigm does not mean China will backpedal on its opening-up, officials and experts have said.
In May 2020, the leadership of the Communist Party of China made a strategic decision to foster a new development pattern where domestic and foreign markets can boost each other, with the domestic market as the mainstay.
“Making the domestic market the mainstay does not mean we are developing our economy with the door closed,” Xi told a symposium of entrepreneurs in July last year. By giving full play to the potential of the domestic market, both domestic and foreign markets can be better connected and utilized to realize robust and sustainable development, he said.
China will follow the new development philosophy, foster a new development paradigm, and pursue high-quality development by staying committed to deepening reform and opening wider to the world, Xi said when delivering a speech via video at the third Paris Peace Forum in 2020.
He stressed that China will also work with the rest of the international community to keep the global industrial and supply chains stable and to foster an open world economy.
China on Friday unveiled a draft blueprint for economic and social development over the next five years and clarified the long-range objectives through the year 2035, setting policy priorities for a new development stage that is crucial for the country to achieve socialist modernization.
The draft outline includes comprehensive and targeted measures echoing China’s new development philosophy, said Xin Ming, a professor at the Party School of the CPC Central Committee (National Academy of Governance).
Jochen Goller, chief of BMW Group Region China, said China’s new development pattern of “dual circulation” is an effective strategy customized to the strength of the Chinese domestic market.
“‘Dual circulation’ puts a parallel emphasis both on domestic and international circulation. A high-level opening up certainly serves this end, brings win-win outcomes both for Chinese and multinational companies,” he noted.
Alexander Lomanov, deputy director at the Institute of World Economy and International Relations of the Russian Academy of Sciences, said the transition to the “dual circulation” model is an important stage in the development of China’s economic policy.
“It has its own internal logic and the Chinese leadership has stressed the importance of domestic demand for years,” he noted.
Dual circulation is seen as a strategic and win-win choice for China to reshape its international cooperation and new competitive edge, said Justin Yifu Lin, former World Bank chief economist and honorary dean of the National School of Development at Peking University.
“China’s economy has been deeply integrated into the global economy. As China enters the new stage of development, its ties with the world economy will get even closer,” said Ji Zhiye, former head of China Institutes of Contemporary International Relations who is also a member of the National Committee of the Chinese People’s Political Consultative Conference.
Ji said the international capitals are optimistic about the Chinese market thanks to the country’s business environment and economic resilience.
Zarko Obradovic, member of the Serbian parliament and president of the Friendship Group with China, said China’s new development pattern featuring “dual circulation” would help the country take advantage of the development of the domestic market and make China an ideal economic partner.
Boga Thura Manatsha, senior lecturer at the Department of History of University of Botswana, said that China needs the world for its economy to continue growing and the global economy also needs China to make a sustained comeback.
“It is basically a win-win scenario,” he said, noting that as the whole world, especially developing countries, has been hit hard by COVID-19, China has a critical role to play in reviving the world economy.