Domestic circuit, shutting down the country?

An expression has invaded economic discourse in recent days, 内循环 nèi xúnhuán, interior circuit. These three characters are used, for example, to refer to the circuit followed by an air-conditioning system inside a car.

The Chinese President began to raise the subject on 23 May in a speech stressing the importance of the internal market, “We must respond to the demands of the domestic market and make it the starting and finishing point of development, 我们要把满足国内需求作为发展的出发点和落脚点” while specifying that “a new development model will gradually take shape, in which the large domestic circuit will be the pillar, and the domestic and international circuits will stimulate each other, 逐步形成以国内大循环为主体,国内国际双循环相互促进的新发展格局.”
Many have retained only the first part, “emphasizing the domestic market.” Some circles inside and outside China, who have been noticing a vocabulary worthy of the Cultural Revolution for some months now, even fear a return to the past, the closing of China, the era of food stamps, high shortages, independence, reliance on oneself 自力更生 and a planned economy. A concern that forces some economists to step up to the plate.

economy in china

In an article entitled, the Zhigu consultancy firm writes, in an article entitled, “The domestic circuit is coming, China will once again be a closed country? “内循环 “来了,中国要重回闭关锁国了吗?, “calls such inferences an error in judgment. The fact that China is a country with a large trade surplus has not changed, and it is also true that the goods trade surplus with the United States accounts for 70% of China’s total surplus over the past six years. At the same time, China’s services trade deficit with the United States has been growing rapidly since 2008. China needs foreign currency; it cannot afford to give up” external circulation, 外循环. »
The economic crisis, brought on by the epidemic, does not allow us to wait with our arms folded. It has to cope with business failures, rising unemployment, falling incomes, and a chain reaction. China must first rely on its strengths. Moreover, the internal market’s focus is not a new directive, but this policy has already been in place since 2018. Much ado about nothing!

I can only agree with Zhigu’s remarks about the impossibility of closing the country down. On the other hand, the reactions and concerns expressed reflect the feeling of part of the population regarding the tightening of power in recent years. Where are we going? The political struggle that began in 2013, under the guise of anti-corruption, has taken its toll, and business people in private do not unanimously display that obligatory smile of beautiful pictures.

The article of Zhigu

12 August 2020

Posted on Categories Economy

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