Atmanirbhar China - Dual Circulation
The global pandemic has exacerbated the trend across the world wherein countries have moved away from globalization and started looking inwards. In India, too, we have announced Atmanirbhar Bharat to signal a renewed stress on self-reliance and indigenous production.
- However, what is interesting, according to former Foreign Secretary Shyam Saran, is that China, too, appears to have adopted its own brand of atmanirbhar economic strategy under the intriguing label of “dual circulation”.
- Dual circulation is defined as “taking the domestic market as the mainstay while letting domestic and foreign markets boost each other”.
- Over the past few years, China has been shifting from an investment and export-led growth strategy to one based on domestic consumption and services. Consumption has risen to 56 percent of GDP today as compared to about 35 percent a decade ago. Exports were 36 percent of GDP in 2007 but constituted only 18 percent in 2019.
- There is a realization that the US-China confrontation is structural and likely to persist irrespective of who occupies the White House next year. China would therefore have to rely more on domestic drivers of growth.
- In a recent statement, President Xi Jinping has said that “dual circulation” is by no means a closed domestic loop and reaffirmed that opening up was a fundamental national policy.
- What is also interesting is that the ambitious Belt and Road Initiative (BRI), Xi Jinping’s signature project, has barely been mentioned in the context of dual circulation.
- Reports indicate that as a result of the pandemic, the initiative has stalled in most countries and there are major cost over-runs and delays in implementation.