{"id":12740,"date":"2023-07-24T06:30:45","date_gmt":"2023-07-24T06:30:45","guid":{"rendered":"https:\/\/focus.cbbc.org\/?p=12740"},"modified":"2025-04-23T09:08:00","modified_gmt":"2025-04-23T09:08:00","slug":"what-is-the-dual-circulation-strategy-and-what-does-it-mean-for-business","status":"publish","type":"post","link":"https:\/\/focus.cbbc.org\/what-is-the-dual-circulation-strategy-and-what-does-it-mean-for-business\/","title":{"rendered":"Xi Jinping’s economic strategies, explained"},"content":{"rendered":"

The media often throw around terms like \u2018Dual Circulation Strategy\u2019, \u2018friendshoring\u2019, and \u2018Xiconomics\u2019 in relation to China’s economic policies, but what do they actually mean? And how could they affect your business in China? Paul French speaks to the authors of a new book that explores these crucial questions<\/span><\/h2>\n

Andrew Cainey and Christiane Prange\u2019s Xiconomics: What China\u2019s Dual Circulation Strategy Means for Global Business<\/em> (Columbia University Press) is perhaps one of the first books to do a serious deep-dive on Xi Jinping\u2019s economic strategies \u2013 as they were, as they are and as they are evolving.<\/p>\n

Cainey has been advising businesses and governments on China for over twenty years, is a senior associate fellow at the Royal United Services Institute and a founding director of the UK National Committee on China. Christiane Prange is a Professor of Strategy and International Business with universities in Europe and globally. She previously taught at Tongji University and Jiaotong University (Antai College) in China. She also advises multinational companies on their internationalisation and agility strategies.<\/p>\n

Paul French caught up with Cainey to talk dual circulation strategies, friendshoring, the National Unified Market, localisation and, crucially, where Xiconomics is headed.<\/p>\n

\"launchpad<\/a><\/p>\n

What is Xiconomics, and how is it being implemented? How is the Dual Circulation Strategy a part of that?<\/h4>\n

Xiconomics is an English language term that Chinese state media have been using since the 19th<\/sup> Party Congress in 2017. The word is a sign really of the personal imprint Xi is putting on economic policy \u2013 a domain previously more handled by the Premier than the President. It reflects the more formal term in Chinese: \u2018Xi Jinping Economic Thought on Socialism with Chinese Characteristics for a New Era.\u201d<\/p>\n

In 2020, Xi announced the Dual Circulation Strategy<\/a>, which is important as both a framework and as a strategy. Taken as a framework, Dual Circulation is a simple view of the world economy that marks out a clear dividing line between the domestic economy (\u2018internal circulation\u2019) and the rest of the world (\u2018external circulation\u2019). It then describes how the two domains should interact (\u2018mutual reinforcement\u2019).\u00a0 This framework is a change. In the late 1980s, China talked of \u2018entering into the great international circulation\u2019. \u00a0Now the focus has shifted to two distinct \u2018circulations\u2019 that are to be managed differently.\u00a0 In China, Xi Jinping has declared the Party \u2018leads everything\u2019. Overseas it does not.<\/p>\n

This framework sets up strategic choices. \u00a0Is the internal or the external more important? What does internal circulation look like, and how does it operate? How do the two relate to one another? Since 2020, Xi has articulated a consistent strategy. The \u2018internal is to be the mainstay\u2019, with a greater role for domestic demand and a focus on technology<\/a> upgrading. This reduces China\u2019s reliance on critical imports and increases China\u2019s own capabilities. Of course, things do not always work out quite as planned. And exports have played a stronger role in the economy recently in the face of weakened domestic demand.<\/p>\n