External Publication

What is behind China’s Dual Circulation Strategy?

China's dual circulation strategy should not be dismissed as a buzzword: its implementation will entail major consequences.

By: Date: September 7, 2021 Topic: Global economy and trade

This piece was originally published by China Leadership Monitor.

Dual circulation may sound like a buzzword without much relevance, but it is not. It actually enshrines China’s long-standing ambition to become self-sufficient. Such an ambition was made known to the world in 2015 after the launch of China’s industrial policy masterplan, Made in China 2025, even though the world at the time was still in full engagement with China. Since Trump’s push for a trade and technology war against China, the Chinese leadership has been relying on a dual circulation strategy to support China’s growth. This basically means insulating the domestic market from the rest of the world by eliminating any bottlenecks, whether in terms of natural resources or technology, so as to vertically integrate its production and achieve self-reliance served by China’s huge domestic market. A relevant consequence for the world, though, is that China will no longer need to import high-end inputs, with obvious negative consequences for major exporters of technology, such as Germany, Japan, South Korea, and the U.S. As if this were not enough, the second aspect of dual circulation, boosting external demand, in a context of Western containment, will increase the importance of the Belt and Road Initiative (BRI) to ensure open markets in the emerging world. In essence, dual circulation is part of China’s masterplan to become self-reliant in terms of resources and technology but also in terms of demand through its huge market as well as through third markets available through the BRI.

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Opinion

Xi, Biden switching strategies for dominance

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Is China’s private sector advancing or retreating?

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Speakers: Reinhard Bütikofer, Nicolas Véron and Alicia García-Herrero Topic: Global economy and trade Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 18, 2022
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Is the private sector retreating in China? Not among its largest companies

Though private ownership does not free companies from the pervasive influence of the Communist Party, China’s private and state sectors are not equivalent; China’s largest firms are growing faster than their state-owned counterparts.

By: Tianlei Huang and Nicolas Véron Topic: Global economy and trade Date: April 5, 2022
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Working Paper

The private sector advances in China: The evolving ownership structures of the largest companies in the Xi Jinping era

This paper documents recent structural changes in China’s corporate landscape, based on company level data, providing a complementary perspective to that of official Chinese statistics.

By: Tianlei Huang and Nicolas Véron Topic: Global economy and trade Date: April 5, 2022
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By: Alicia García-Herrero Topic: Global economy and trade Date: April 1, 2022
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Top official makes rare intervention to reassure investors but progress to resolve problems will be difficult.

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