0312 GMT September 23, 2020
The country's leaders have proposed a so-called ‘dual circulation’ model of growth to steer the economy, the sources said, which would prioritize ‘internal circulation’ to boost domestic demand and be supplemented by ‘external circulation’. No details have been given on the strategy, channelnewsasia.com reported.
Policy insiders and government advisers said the emphasis signals a strategic shift to local demand and technological development although domestic supply chains would be built partly with the help of foreign investment.
"The Chinese leadership raised the 'internal circulation' concept as the situation has become grim, although complete (reliance on) 'internal circulation' is unlikely," said a policy insider, declining to be named due to the sensitivity of the matter.
China had already been trying to rebalance its economy towards consumption-led growth from exports and investment. Last year, total exports and imports accounted for 32 percent of gross domestic product (GDP), down from a peak of 64 percent in 2006, according to government data.
"We will rely more on domestic demand as foreign trade will decline, and the United States is imposing a tech blockade," said a second policy insider.
The ‘dual circulation’ strategy could become a key priority in the government's 14th five-year plan (2021-2025), which is expected to be discussed and endorsed by top leaders at a key Communist Party conclave in October, policy sources said.
The plan is likely to be unveiled during the annual parliament session in early 2021, they said.
The current five-year-plan, which ends this year, focuses on moving away from traditional and polluting industries, boosting technological innovation, and building a moderately prosperous society.