China rebalancing with ‘dual circulation’

Ever since Chinese President Xi Jinping set markets abuzz in May by raising the idea of a “dual circulation” economy, observers have been exploring the potential of this new economic model for China which has knock-on effects for the rest of the world.

“Dual circulation” refers to two forms of internal and external economic activity, with the former referring to the domestic cycle of demand, consumption, innovation and production of goods, while the latter refers to the export-led strategy that China has championed for the last few decades.

This model aims to reduce China’s dependence on foreign markets and has been touted as a viable strategy to build up resilience to external shocks, especially important during post-pandemic times and ongoing US-China tensions.

While no additional details have been announced, the “dual circulation” strategy is likely to feature…