Dual-circulation remains best path forward

The strategy of establishing a new dual-circulation development paradigm, which focuses on the domestic economy while stressing a positive interplay between domestic and international economic circulations has an overarching significance in promoting high-quality development and building China into a modern socialist country in all respects.

International economic circulation is as indispensable and important to the new dual-circulation development pattern as domestic economic circulation, with the two closely connected to form an organic whole.

The report to the 20th National Congress of the Communist Party of China said the country will boost the dynamism and reliability of the domestic economy while engaging at a higher level in the global economy. We must fully and accurately grasp the intrinsic relationship between domestic and international economic circulations in order to accelerate construction of the new dual-circulation development pattern on the new journey of the new era.

China's economy has been deeply integrated into the world economy and the country has close relations with many other countries around the world in terms of industry and market demand, as the domestic and foreign markets themselves are interdependent and mutually reinforcing.

Taking domestic economic circulation as the mainstay by no means suggests avoiding or weakening connections with international economic circulation or closing previously opened doors.

Instead, it means giving play to the economic advantages of a big country, so that domestic and international economic circulation can interplay with each other at a higher level, enhance the linkage effect of domestic and international markets and resources, and therefore provide material support for the comprehensive construction of a modern socialist country.

Since 2008, anti-globalization sentiment has been on the rise. Fast-growing unilateralism and protectionism have led to backlash against economic globalization. In particular, under the influence of factors like the pandemic and geopolitical issues in recent years, global problems have become intensified and the world has entered a new period of turbulence and change.

However, we must know that those changes cannot downplay the basic logic that international division of labor and trade are conducive to the economic development of all countries, and economic globalization is still the trend in the development of productive forces in the modern world.

China cannot separate itself from the world in its growth trajectory and the world also needs China to develop. By going after their own selfish interests and undermining the international economic order, some countries attempt to take advantage of their strengths to decouple, damage industrial chains and adopt a "small yards with high walls" strategy. They try to exclude China from the global market and industrial system to pursue "globalization without China". Such a strategy runs counter to the direction of historical progress and the natural course of economic development and is impossible to achieve.

In the new dual-circulation development pattern, domestic economic circulation is the foundation and mainstay, while participating in international economic circulation is a must-do amid economic globalization and the international division of labor.

As international economic circulation is undergoing disruption, China's promotion of forming a huge and smooth domestic economic circulation system will strengthen the core position of such a system.

On the one hand, this strategy is conducive to stabilizing domestic economic fundamentals to enhance economic resilience and raise China's economic development level. On the other hand, it can better drive and activate international economic circulation and provide more market opportunities for all countries, make China strongly attractive to global high-quality production resources and lift China's industrial technology development level while meeting domestic demand.

Building the new development paradigm does not mean that opening-up becomes less important but rather aims at a higher level of opening-up. We must grasp the dialectical relations between domestic and international economic circulations and coordinate the expansion of domestic demand, supply-side structural reform and high-standard opening-up.

Looking ahead, China's imports and exports, as well as inbound and outbound foreign investment, will all continue to expand and its role in the international economy will continue to grow.

Facing the new development environment full of challenges and uncertainties, we must coordinate development and security, take the initiative in opening-up and have positive, controllable and active participation in international economic circulation to avoid passive participation in this regard — which features depending solely on external demand and excessively on foreign technology and resources, and lacking security risk prevention and control mechanisms.

Markets are a scarce resource worldwide. China has a huge domestic market that many countries do not have, which is the basis of "dual circulation" and forms China's unique conditions and advantages to actively shape its participation in international economic circulation under current historical conditions.

China's per capita gross domestic product is close to the threshold of high-income countries and, as China is building a modern socialist country in all respects with a population of more than 1.4 billion, a market of almost the combined size of the existing developed countries is to be created, which will create huge business opportunities.

Thanks to its enormous domestic market size and openness to international businesses, China has formed many advantages for economic growth, like a strong innovation capability and resilience against unforeseen impacts.

The country has the world's largest and most comprehensive manufacturing system, a strong supply capacity to meet international and domestic diversified demand, an industrial ecosystem featuring innovation vitality and a relatively stable macroeconomic performance.

That creates a solid foundation for Chinese enterprises to take part in the global division of labor, as well as an enabling industrial and market environment for foreign investors to invest in China.

We must give full play to our comparative advantages, continuously reinforce China's position in the global division of labor system, improve our ability to deal with risks and challenges, and actively shape high-level proactive international economic circulation.

With domestic circulation that features a robust domestic market, increasing self-reliance and strength in science and technology, complete industrial system and ample resources and production factors, we will be able to offset various impacts even from extreme cases to confidently expand opening-up and participate in international cooperation and competition.

We will also have more confidence to fight against protectionist and unilateralist behaviors, and promote international economic circulation.

A smooth international economic circulation will bring to our domestic economic circulation more high-quality production resources as well as more diversified and stable external market demand. It will also promote the improvement of domestic market mechanisms, which will be conducive to the development of China's modern economic system.

China has experienced a sustained and rapid expansion of foreign trade in the past years, which has played an important role in its economic development and people's livelihood enhancement. Yet there are also problems such as the extensive expansion model, vicious price competition, excessive consumption of resources that harms the environment and excessive trade surpluses.

It is necessary to promote high-level opening-up — in particular, steadily expanding institutional opening-up with regard to rules, regulations, management and standards in order to effectively enhance and improve the level and quality of China's participation in international economic circulation.

We expect China will build itself into a trader of quality, cultivate new growth points for international economic and trade cooperation, and participate in the global industrial division of labor and cooperation at a higher level and on a larger scale.

We should expand the network of high-standard free-trade agreements, take active steps to join high-standard economic and trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Digital Economy Partnership Agreement, and align with relevant rules, regulations, management and standards to actively deepen domestic reforms in related fields.

We can promote the optimization and upgrade of trade in goods, innovate the development mechanism for trade in services and vigorously develop digital trade.

We need to expand market entry processes, appropriately downsize the negative list for foreign investment and increase openness in the modern services industry, while ensuring national treatment for foreign-funded companies, promoting fair competition, protecting legitimate interests and rights of foreign investors, improving services for foreign-funded companies and facilitating the launch of signature foreign-funded projects.

We should also optimize the opening-up layout across regions, implement the strategy of upgrading pilot free trade zones, and give play to the role of international economic circulation in promoting a balanced and sustainable development of domestic regional economies.

The writer is an official at the Office of the Central Committee for Financial and Economic Affairs, the Communist Party of China.

The views don't necessarily reflect those of China Daily.