Xi Jinping’s grand economic strategy was born out of China’s new perception of the world
- China’s dual-circulation policy, with a greater focus on domestic consumption and production, has paid off in the short term but will continue to be tested
- Disruptions in cross-border trade flows prompted a strategic economic rethink at the highest level
A man’s behaviour is often shaped by his perceptions of the world around him. He may feel relaxed in a safe and comfortable environment, but turn alert and defensive in a hostile one. A country’s chosen strategies and decisions, to some extent, are also a reflection of policymakers’ impression of the world.
The situation helped him conclude that “the circumstances have become very different”, and that the old model of importing massive amounts of materials to process for re-exports is no longer workable. As such, Xi determined that China must rely less on the outside world.
Xi’s explanation reflected the tactical and strategic thinking of China’s leadership – that relying on the domestic market was essential while fighting a two-front war to restart the national economy and keep the coronavirus at bay.
China’s economic trajectory in the following months proved that Xi’s tactic has worked. Successfully controlling the coronavirus at home helped fuel the country’s economic rebound while strengthening China’s role as the world’s primary production base.
“As long as we can stand on our own and be self-reliant, and maintain a vibrant flow of goods and services domestically, then we will be invincible no matter how the storm changes internationally,” Xi said. “We will survive and continue to develop, and nobody can beat us or choke us to death.”
This is a strong perception that China has no other choice but to rely more on itself in a dangerous world.