In its Asia Power Index for 2021 released on Sunday, the Sydney-based Lowy Institute said that while China has improved on some indicators of resilience, its influence in Asia has waned with its ‘isolationist’ shift as well as problems. structural factors such as the aging of the population and heavy indebtedness.
Since China proposed a new development model characterized by “dual circulation”, there have been various doubts and exaggerated fears that the Chinese economy is turning in on itself. But biased interpretations such as “decoupling theory”, “closing the doors” to the world market, and “isolationism” are just other examples of a misperception of China’s development trajectory and its development. its role in globalization.
It is undeniable that the Chinese economy will be more dependent on domestic demand. Influential Chinese economist Huang Qifan told a forum on Saturday that China’s dependence on foreign trade or exports will decrease as the Chinese government focuses on increasing domestic consumption.
Importantly, China’s focus on internal circulation within its economy has been put forward against the backdrop of rising global protectionism. The devastating COVID-19 has hit the global economy hard and has led to growing uncertainties over external demand. This is an appropriate and necessary adjustment that China has made to its development model in light of the changing landscape.
To begin with, China has a very large market to support the internal circulation of its economy. In the past, with its weak economic base, China’s domestic demand was limited, so the expansion of the foreign market to stimulate economic growth corresponds to China’s development pattern in this period. With the expansion of its middle-income consumer base, there will also emerge an overwhelming trend for domestic demand to play a greater role in China’s economic growth.
In addition, strengthening internal circulation is not at odds with China’s policy of openness.
The dual role played by China as a “world factory” and “world market” is clear proof that China is not an isolated economy. And his support for global supply chains as well as openness efforts during the pandemic all indicate that he doesn’t have isolationist tendencies either.
China’s overall trade grew even during the pandemic, with total imports and exports surging 22.2 percent year-on-year to 31.67 trillion yuan ($ 4.89 trillion) in the first 10 months of this year, according to official data.
Apparently, China’s growing economy will continue to benefit from the global division of labor, while the global economy will also benefit from the spillover effects of the very large Chinese market.
While many can see the temporary impact of the US chip containment, few realize that China’s manufacturing base remains strong and cannot be replaced by any other country. Even during the pandemic, Chinese manufacturing remains an integral part of the global production chain. In addition, China is doomed to move up the industrial chain and break American containment.
Western commentators have never tired of making various grim predictions about China’s development path and its structural problems, but this only reveals their biased and mistaken understanding of the Chinese economy. If they cannot paint a precise picture of the Chinese economy, it is because they are worried about China’s development and competitiveness, which are linked to its political system. They are one-eyed fanatics of Western economic experience and theories in analyzing issues related to China’s economic development, leading to pessimistic views on the Chinese economy.
While Western elites live under the illusion of “isolating China”, China is working on a plan to build a new development path.