China’s Liu He vows Beijing will not give up economic opening with ‘dual circulation’ strategy

Name: What happened at the Chinese Communist Party’s major policy meeting, the fifth plenum?
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Vice-Premier Liu He says China’s ‘dual circulation’ strategy does not mean reducing interaction with the outside world

China will continue to seek ‘wider, broader and deeper’ economic opening, while shielding itself from external uncertainty

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Vice-Premier Liu He says China’s ‘dual circulation’ strategy does not mean reducing interaction with the outside world. Photo: Bloomberg

Zhou Xin

Published: 8:15pm, 25 Nov 2020Updated: 9:35am, 26 Nov 2020

Vice-Premier Liu He, the top economic adviser to President Xi Jinping, has reiterated that China’s new focus on its domestic market and technological independence does not mean it is cutting links with the rest of the world.

Beijing’s “dual circulation” strategy, which will concentrate on domestic demand for future growth and work to promote indigenous technology innovation, has fanned speculation China is trying to reduce its interaction with the outside world. Chinese leaders, including Xi, have said the nation is not in favour of economic “decoupling” and remains committed to opening up its economy.

Liu, who argued against decoupling between China and the United States in January 2020 at the time he signed the phase one trade deal with US President Donald Trump, wrote Beijing was “by no means trying to close itself up or to achieve total self-sufficiency”.

“It’s impossible to do everything by yourself and to give up the international division of labour,” Liu wrote in an article published in the People’s Daily, a mouthpiece for the Communist Party, on Wednesday.

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What happened at the Chinese Communist Party’s major policy meeting, the fifth plenum?

As a result, China will continue to seek “wider, broader and deeper” economic opening as part of its new economic strategy, Liu said.

The comments come just days after China said it was considering joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which replaced the Trans-Pacific Partnership after the United States pulled out. It also follows the signing of the Regional Comprehensive Economic Partnership (RCEP), a 15-member Asian regional trade pact that includes China, but not the US or India.

Liu reiterated Beijing’s stance that China’s huge domestic market will provide “opportunities” to international businesses. At the same time, the nation will rely on its large domestic market to attract “global commodity and resource” inflows, which China will use to forge new “competitive advantages” internationally, he said.

China’s intended shift from an export-oriented economy is not new, but according to Liu the changes in the international environment over the last decade have made it necessary to reduce reliance on external markets and imported technologies.

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Liu He