“Dual circulation” has become increasingly prominent in recent weeks as the top focus of China’s macroeconomic policy, reported Caixin.
Prominent economist Yu Yongdingspokeat a Sunday event on the topic organized by the China Wealth Management 50 Forum, and the state-run Economic Daily newspaper on Wednesday published afront-page article on it, indicating an authoritative interpretation of the theory. That article concluded with a specific reference to its importance as the 14th 5-year plan approaches.
Both Yu’s talk and the Economic Daily article are fairly long and heavy on jargon, but the buzz is a clear signal of the concept’s importance, which ICBC International economists Wang Yuzhe and Cheng Shi recently argued it’s based on three key trends.
The first is relying on the scale of China’s domestic economy and available policy space and putting existing economic resources to better use. The second is domestic consumption and industrial upgrading forming a more closed loop, helping create a new growth engine against the background of shifting global trade patterns and value chains. And the third is reform and opening up, particularly in terms of factor markets enhancing resource allocation efficiency and financial sector opening helping actively link internal and external “cycles”.