Creating New Economic Miracles Using the New Development Dynamic
China is entering a new stage of development in which the overarching strategy of national rejuvenation and once-in-a-century changes in the world situation are deeply intertwined. The whole nation is confronting a more complex situation, arduous tasks, and unprecedented opportunities and challenges. Against this backdrop, the CPC faces the major test of determining how to seize opportunities and explore new horizons to produce new economic miracles.
Gaining experience of high-quality development
China's new development dynamic was not conceived out of thin air; rather, it was devised based on practical experience of socialist economic development and experimentation in responding to risks and challenges by the CPC Central Committee with Xi Jinping at its core. Since the global financial crisis in 2008, China's economy has shifted toward a development model dominated by the domestic market. This is reflected in a fall in China's current account surplus as a percentage of GDP, from 9.9% in 2007 to less than 1% now, and the contribution of domestic demand to economic growth exceeding 100% in seven nonconsecutive years. As socialism with Chinese characteristics has entered a new era, so has the Chinese economy, shifting from a stage of rapid growth to one of high-quality development. Unimpeded economic flows are an important sign of high-quality development. At the 2017 Central Economic Work Conference, President Xi Jinping talked about the meaning and requirements of high-quality development, emphasizing that it should facilitate an unimpeded cycle of production, circulation, distribution, and consumption. In recent years, the CPC Central Committee has formulated strategies to ensure unimpeded economic flows, which have promoted continual economic progress and long-term stability.
The sudden outbreak of the Covid-19 pandemic in 2020 caused profound changes to the world economy, particularly by impeding economic flows. Regarding coordinating virus containment and economic and social development efforts, President Xi has said on numerous occasions that the focus should be on clearing blockages, shoring up weaknesses, and eliminating obstructive factors, to guarantee unimpeded economic flows throughout society. At a meeting of the Political Bureau of the Central Committee on February 21, 2020, President Xi explained the objective of facilitating unimpeded economic flows. At the seventh meeting of the Central Committee for Financial and Economic Affairs on April 10, he outlined the strategic goal of creating a new development dynamic that focuses on internal circulation and features positive interplay between internal and external circulation (dual circulation). The Fifth Plenary Session of the 19th CPC Central Committee set out more detailed plans in this regard, including clearly defined targets, requirements, and practical approaches. These plans entail significant improvements to China's economic development strategy and approaches during the 14th Five-Year Plan period (2021-2025) and beyond. They are important tactical arrangements aimed at securing China's long-term development and stability, and they encapsulate and elevate China's strategic thinking and policies on economic development since the introduction of reform and opening up and particularly since the dawn of the new era. These arrangements will have a profound and far-reaching impact on China's high-quality economic development and on global economic prosperity.
Strategic improvements to China's economy
The new development dynamic was chosen by the CPC Central Committee based on China's new development stage, environment, conditions, and advantages. In terms of development stage, China is already in the stage of high-quality growth, which means there has been a substantial change in the factors underpinning its development, and it needs to foster a vigorous domestic market to achieve intensive growth driven by innovation. Regarding the development environment, China needs to be more self-reliant to safeguard its national economy due to an increasingly unfavorable external environment, characterized by an ever-more complex international situation, a backlash to economic globalization, prevailing unilateralism and protectionism in some countries, turbulent changes around the world, weakened traditional international flows, and disruption to global industrial chains and supply chains. Concerning development conditions, China has the largest and most complete industrial system in the world. It has developed enormous production and industrial support capabilities, and its vast domestic market and immense investment potential are stimulating internal circulation more with each passing day. As for development advantages, China boasts sound institutions, solid material foundations, effective governance, and a stable society, and it is still in an important period of strategic opportunities. Since the CPC's 18th National Congress, major reforms have been introduced to implement China's new development philosophy, promote high-quality growth, and increase China's openness to the outside world. These have led to theoretical, institutional, and practical results that have spurred the construction of its new development dynamic.
Double development dynamic
It is vital that China prioritizes internal flows in the new development dynamic, as domestic flows are the foundation of the double development dynamic and a discernible strength of major economies. As a developing socialist country, China has long been committed to development characterized by independence and self-reliance and to achieving development on its own terms. To construct a new development dynamic, China must pursue a higher level of self-reliance amid new conditions. In the process, it should be borne in mind that the key to preventing and mitigating risks and hazards and responding positively to challenges posed by the changing external environment lies in handling domestic affairs well. Adherence to this principle and self-reliance means China has been able to absorb external risks and shocks since the launch of reform and opening up. Given the unstable and unpredictable global situation, China can guarantee high-quality economic development and seize the initiative by exploiting its enormous market, strengthening its capacity for independent development, and boosting the internal economy.
Interplay between internal and external economic flows should be stressed in the course of constructing the new development dynamic. It has been asked whether prioritizing internal flows means closing China's doors. The answer is no. The objective is not to close China's doors again; it is to strike a better balance between openness and independence, as well as between domestic and international considerations, and open the Chinese market further. As the international market is an extension of the domestic one, smoother macro development in the domestic economy will cause more global resources to gravitate toward China, helping to meet domestic demand, improve China's industrial technology, and give China a new edge in international economic cooperation and competition. Given the recent increase in protectionism, downturn in the world economy, and contraction of the global market, China should take full advantage of its enormous market and use its economic prosperity and unimpeded internal flows to drive economic development domestically and contribute to global economic prosperity.
(Originally appeared in Qiushi Journal, No. 24, 2020. Shortened from the original Chinese version.)