Explainer: China's new 'dual circulation' development paradigm


A man works at a workshop of Hefei plant of Changan Automobile in High-tech Industry Development Zone in Hefei, east China's Anhui Province, Feb. 26, 2020. (Xinhua/Zhou Mu)

BEIJING, March 28 -- To sustain growth, China is pushing a "dual circulation" development paradigm, which has been mentioned as a guiding thought in a blueprint for its development in the next five to 15 years.

"China will advance the building of a strong domestic market and a strong trading nation in a concerted way, based on the domestic circulation," read the Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035.

What is the new development paradigm? Why did China put forward it in 2020? How will the country foster it? Here are some explanations.

-- What is the new development paradigm?

First floated by China's leadership in May 2020, the new development paradigm of "dual circulation" allows the domestic and overseas markets to reinforce each other, with the domestic market as the mainstay.

The key to building a new development pattern lies in unimpeded economic circulation and industrial connectivity, according to an article by Vice Premier Liu He expounding on the new paradigm.

The fundamental requirements are enhancing the creativity and connectivity of the supply system, removing various bottlenecks of development, and smoothing the circulation of the national economy, Liu wrote.

Workers make protective suits at a workshop of Hodo Group in Wuxi, east China's Jiangsu Province, Feb. 8, 2020. (Xinhua/Li Bo)

-- Why did China propose the new paradigm?

Despite the impact of the COVID-19 pandemic, the new development pattern comes not as a passive, short-term response, but as an active policy choice based on changes in the country's development conditions and demand for long-term high-quality growth.

Since the 2008 global financial crisis, Chinese authorities have put forward strategies including expanding domestic demand and supply-side structural reforms, suggesting the gradual shift toward internal circulation has long been underway, said Liu Yuanchun, vice president of the Renmin University of China.

Currently, protectionism and anti-globalization are on the rise, but the main driving force for the new development pattern is the shift in China's comparative advantage from a cheap labor force to huge domestic consumption potential, said Yao Jingyuan, a research fellow at the Counsellors' Office of the State Council.

It is a natural choice to focus on the domestic market as China's per capita GDP rises above 10,000 U.S. dollars and its middle-income population exceedings 400 million, entailing mass opportunities at home.

-- Will China close its door under the new pattern?

Making the domestic market the mainstay does not mean China is developing its economy with the door closed. By giving full play to the potential of the domestic market, both domestic and foreign markets can be better connected and utilized to realize robust and sustainable development.

Justin Yifu Lin, honorary dean of the National School of Development at Peking University, said that taking the domestic market as the mainstay doesn't mean a return to an inward-looking economy. He said it will not affect China's commitment to opening-up.

Despite the impact from COVID-19 last year, the country made strides in opening its market by unveiling three new pilot free trade zones. More notably, it signed the Regional Comprehensive Economic Partnership agreement in November 2020, which launched the world's biggest free trade bloc to date.

For the next five years and beyond, China will promote the liberalization and facilitation of trade and investment, and steadily advance institutional openness, which stresses rule-based, transparent regulatory models and business environment that better aligns with international norms, as outlined in the new five-year plan.

A customer selects drinks at a supermarket in Guiyang, southwest China's Guizhou Province, Sept. 16, 2020. (Photo by Zhao Song/Xinhua)

-- Why will China's new development paradigm be successful?

China's economic development over the past 40 years has laid a solid foundation for the country to forge the new development paradigm.

China has the world's most complete industrial system and largest middle-income population, and leads the world in terms of retail sales of consumer goods and total import and export volume. This makes it possible for the country to tap domestic demand for future growth.

China's ability to eradicate institutional obstacles through tireless reforms will support the operation of dual circulation as the market is playing a more decisive role in allocating resources and the country's business environment continues to improve.

According to a World Bank report, China's ease of doing business ranking rose to 31 last year, and it is also among the 10 economies that improved the most on the ease of doing business after implementing reforms.

-- How will China work to forge the new paradigm?

China's leadership has underscored that enhancing independent innovation capabilities and making breakthroughs in key and core technologies are vital to establishing the new paradigm.

For the next five years, China's research and development spending will grow by over 7 percent annually, according to the outline.

For domestic circulation, the outline noted that China will deepen its supply-side structural reform and innovate its modes of production to provide high-quality products and services. Other measures include rectifying resource misallocation and allowing the financial sector to better serve the real economy.

Meanwhile, the country will strive to become a strong magnet for global resources and production factors, promote the coordinated development of domestic and external demand, imports and exports, as well as foreign and outbound investment, according to the outline.

Western views of human rights don't represent int'l community: Chinese FM

ABU DHABI, March 28 -- Chinese State Councilor and Foreign Minister Wang Yi said on Sunday that the views of human rights held by some Western countries don't represent those of the international community.

He made these remarks in a meeting with his counterpart of the United Arab Emirates (UAE) Sheikh Abdullah bin Zayed al-Nahyan in the UAE capital Abu Dhabi.

The visiting Chinese foreign minister said that the situation of a country's human rights shall be judged by its people, rather than other countries' opinions.

"The world should listen to and absorb the views of developing countries so that the definition of human rights will be more comprehensive, diverse and balanced," Wang said.

He stressed that the rights to live and develop are as important as the political and social rights, and fairness and justice should be respected the same as democracy and freedom.

"It's normal that different civilizations and traditions in different development phases lead to different understandings and emphases. This is why we advocate communicating equally and learning from each other on the human rights issue," Wang said.

He reiterated that China opposes any form of interference in other countries' domestic affairs under the pretext of protecting human rights, and objects to slandering other countries by using human rights as a political tool.

"No country is superior to another in this world, and the standard of a single country should not be regarded as the international standard," Wang said, noting it would be the utmost injustice in human history if some Western countries keep using human rights as an excuse to suppress and contain developing countries and to deprive non-Western countries of the rights to develop.

China is keen to hold dialogue with the UAE over the human rights issue and jointly seek progress in protecting human rights in both countries and the world as well, Wang added.

For his part, Sheikh Abdullah said that the level of well-being and happiness of the citizens should be the criteria to judge the human rights situation in a country.

Forcing others to accept one's own values is hegemony, and many developing countries have suffered such kind of unfair treatment over the human rights issue, he noted.

The UAE is willing to enhance communication and cooperation with China on promoting and protecting human rights, he added.

Better roads lead to China's rural vitalization

-- As China advances rural vitalization following its eradication of absolute poverty, improved rural roads have helped farmers dispatch their goods and brought tourists and other resources, facilitating the development of industries including e-commerce, tourism and agriculture with local characteristics.

-- The country is not simply pursuing an increase in its rural road mileage, but strives to promote the integration of transportation construction, resource development and industrial development in rural areas to better serve rural vitalization.

-- The huge rural road network has strongly stimulated rural production and consumption and played a big supporting role in building a moderately prosperous society in all respects.

by Xinhua writers Lyu Mengqi, Gao Jianfei and Lyu Qiuping

BEIJING, March 28 -- The major road in Lingtou, a small village in north China's Shanxi Province, is named "Weishang," meaning small online shops. Many locals are engaged in e-commerce, including villager Zhang Xiaoying.

Zhang, 53, sells millet, beans, eggs, honey and other agricultural products both online and offline. With logistics services available at her doorstep, she brought home more than 100,000 yuan (15,290 U.S. dollars) in 2020.

In the same year, the cement road to her village was widened, allowing large trucks to enter. "My business wouldn't be as booming as it is without the road," Zhang said.

As China advances rural vitalization following its eradication of absolute poverty, improved rural roads have helped farmers dispatch their goods and brought tourists and other resources, facilitating the development of industries including e-commerce, tourism and agriculture with local characteristics.

Aerial photo taken on June 18, 2019 shows a road in Wuxiang County of north China's Shanxi Province. (Xinhua/Zhan Yan)

The total length of China's rural roads will stabilize at approximately 5 million km by 2035, and the quality of roads leading to townships and villages will be further improved, Wang Zhiqing, vice minister of transport, told a press conference on Wednesday.

Currently, China's rural roads total 4.2 million km in length. The country is not simply pursuing an increase in its rural road mileage, but strives to promote the integration of transportation construction, resource development and industrial development in rural areas to better serve rural vitalization.

After a section of the "Great Wall No.1 Tour Road" was built in Shanxi in 2018, tourists swarmed into Zhenbianbu, a formerly impoverished village at the foot of the Great Wall in Yanggao County.

Former migrant worker Zhang Yuewen, 25, has returned home and opened a small workshop selling homemade grain liquor to tourists.

"Despite the epidemic, I earned more than 70,000 yuan last year, twice my income as a migrant worker," he said.

In 2020, the per capita net income of villagers more than tripled from the level in 2014 to over 7,000 yuan.

Aerial photo taken on Aug. 3, 2020 shows mountain roads leading to Chenqiao Village, Zhouning County, southeast China's Fujian Province. (Xinhua/Jiang Kehong)

From 2016 to 2020, China's investment in its rural road network topped 310 billion yuan.

In Longxi County, northwest China's Gansu Province, a 7-km road connecting Liujiazhang Village to a nearby township was constructed in 2017, enabling villagers to sell their herbs with much lower transport costs.

Villager Li Yanjie said that before the new road was built, vehicles were reluctant to come as they were often stuck in the mud after it had rained. "Herbal plantation has become our pillar industry, partly because of the better road access."

According to the Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035, China will put forward a "road chief" system, in which specific personnel will be responsible for building, managing, maintaining and operating rural roads.

Aerial photo taken on Nov. 9, 2020 shows the Zhehong highway in Bulenggou Village, Dongxiang Autonomous County of northwest China's Gansu Province. (Xinhua/Ma Xiping)

The huge rural road network has strongly stimulated rural production and consumption and played a big supporting role in building a moderately prosperous society in all respects, said Yang Wude, vice president of Shanxi Agricultural University.

"Roads remain a priority for rural vitalization. More developed transportation will further stimulate the vitality of rural development and the market," said Yang.

False claims aim to hurt prosperity of Xinjiang

An autonomous crop-sowing vehicle plants cotton seeds on Friday in a high-yield demonstration field in Kuqa county in the Xinjiang Uygur autonomous region.

It has become clearer than ever that using fabrications to accuse the Xinjiang Uygur autonomous region of tolerating "forced labor" is just the first step for anti-China forces in Western countries to curb the development of the region's cotton and textile industry, as well as to inflict a heavy blow to the development of the region and the entire country, industry officials said.

Ultimately, the large number of vulnerable cotton growers and textile workers in Xinjiang, many from ethnic groups including the Uygur, Kazak and Uzbek, are the real victims. Many of them, particularly those from less developed southern Xinjiang, have just escaped from poverty as the labor-intensive textile industry has thrived in the region in recent years, the officials said over the weekend.

"We're considering laying off some workers because of poor sales of cotton yarn after some big international retail brands have chosen not to source cotton and yarn from Xinjiang over the so-called forced labor concerns," said a human resource officer with a cotton yarn factory near Korla, in southern Xinjiang's Bayingolin Mongol autonomous prefecture.

The chain of effects is obvious and happening now, said the officer, who would give only his surname, Ma."The suppliers of the retail brands no longer place orders with us. We then have to reduce production, which means many workers will be laid off," he said, adding that most of the workers are from rural areas.

"Also, factories like ours will purchase less cotton, which will cause the price of cotton to fall. Then the cotton farmers will suffer," he added.

Ma's factory is located in Tarim Basin, one of the largest cotton growing areas in China. Xinjiang manufactures more than 5 million metric tons of cotton annually-about 80 percent of the nation's total production. By the end of 2019, there were 808 cotton processing companies in Xinjiang, accounting for 84 percent of the country's total, according to the China Cotton Association.

The cotton textile industry has created jobs for more than 600,000 local people in Xinjiang. More than 50 percent of farmers in Xinjiang grow cotton, and over 70 percent of these farmers are members of ethnic minority groups including the Uygur, Kazak and Uzbek in southern Xinjiang. About 80 percent of their income comes from growing cotton, the association said.

"Such wrong acts (of excluding Xinjiang cotton and associated products from the supply chain) harm the legitimate rights of local farmers and workers who are entitled to improve their living standards by hard work," it said in a statement.

"It actually harms the human rights of Xinjiang people in the name of supply chain compliance," the association said.

Over the weekend, the Chinese public has continued voicing outrage on social media or in some cases staged protests starting on Wednesday after finding out that some big international retail brands, including H&M and Nike, had once issued statements saying they wouldn't work with any Xinjiang garment manufacturing factories, nor would they source cotton from the region.

The companies claimed that they were concerned about some Western media reports of "forced labor" in the region-an accusation that the Chinese central and local governments, as well as industry officials and local farmers in Xinjiang, have rebutted as groundless.

Dozens of Chinese entertainment stars have declared they would end commercial ties with the brands involved, and the products of some brands have been pulled off large online Chinese shopping platforms.

Ma said the biggest blow for Xinjiang's cotton and textile industry is yet to come. "We're still manufacturing with the cotton picked in 2018 and 2019. All we need to do now is to find new buyers," he said."But the situation will become more complicated and difficult for us and cotton growers in the next couple of years if the region's cotton and textile industry remains a target."

Ma said his factory received many inspections from national and local labor protection bodies in 2020 after some Western countries, especially the United States, constantly accused the region of using "forced labor". But no irregularity has been found.

"At first I thought the claim is only about politics, but now it has become clearer than ever that it was just their first step. Their true intention, to curb Xinjiang's development, has now been fully revealed," Ma said.

"The whole thing must be carefully orchestrated because they know how important the cotton and textile industry is to Xinjiang and how many people would be affected."