China’s ‘Dual Circulation’ Strategy: Urgent Needs for Greater Economic Self-reliance

Abstract

China’s rapid development, huge economic output, national strength, and improvement of people’s living standards are the remarkable results of the transformation from being an isolated economy to a highly globalized one since 1978. In recent years, China’s economy has undergone profoundchallenges from the international environment such as rising protectionism, economic stagnation, and the COVID-19 pandemic. In such a context, the dual circulation strategy (DCS) has been introduced by the Chinese Communist Party (CCP) as a new economic model for the next five years and beyond, aimed at boosting China’s domestic demand and simultaneously creating favourable conditions for domestic and overseas markets to complement each other. This study emphasizes the necessities of transforming to DCS because of both prominent contradictions in the internal economy as well as complex changes in the international economic environment. It also affirms that China’s new economic model is towards a more sustainable economy to hedge against external risks.