But then came the interesting part. “Since the beginning of this year, I have said on many occasions that we must promote the formation of a new development pattern, in which domestic and international cycles are the mainstay, and the domestic and international dual cycles promote each other,” Xi said. To an outsider, this might seem unremarkable, cloaked as it is in the elliptical phraseology that often marks Chinese economic ideas. But the “dual circulation” strategy Xi outlined actually represents a radical new understanding of globalization and of China’s place within it.
More than just a buzzword, dual circulation describes the deeply pessimistic worldview that has settled over Beijing. Once China’s leaders saw opportunity in globalization. Now, they expect the U.S. and its allies to deny China the technology it needs to build “a modern socialist country” by mid-century, meaning a wealthy superpower fit to rival the U.S. Although likely to be less pugilistic, Beijing rightly believes an incoming Biden administration will also press forward with policies designed to stop advanced technologies finding their way into Beijing’s hands. Chinese thinking has long valorized self-reliance, dating back to ideas developed by former Chinese leader Mao Zedong during the country’s civil war, which ended with the foundation of the People’s Republic of China in 1949. Now, Trump’s tariffs, as well as his campaigns against companies like Huawei and TikTok, have given new impetus to the modern form of self-reliance Xi dubs “internal” development.
Many experts have noted a changing Western consensus on China, as leaders in Washington abandoned the idea that economic modernization would inevitably lead to political liberalization in Beijing. But there has been a comparable shift in China’s internal conversation on the West too. Beginning with semiconductors but potentially expanding to all manner of other areas, China now expects it will have to develop technologically on its own. Xi’s new theory now sits at the heart of the country’s 14th five-year plan, which covers development from 2021 to 2025, and was unveiled in draft form in October. The result will accelerate China’s decoupling from the West, while also increasing the importance of trading links forged with other parts of the world — for instance, via Xi’s signature Belt and Road Initiative. Put more bluntly, while the world was distracted by the drama of the U.S. presidential election, Xi quietly unveiled an economic strategy fit for a new Cold War. Both for China and for globalization itself, the results are likely to be profound.
Read it all (my emphasis).
— Branko Milanovic (@BrankoMilan) December 12, 2020