China has vowed to deepen its reform to create a new development pattern featuring dual circulation, under which the country will strive to improve the allocation of resources, pursue coordinated regional development and open up the economy further.
Presiding over the 15th meeting of the central committee for deepening overall reform on Tuesday, Chinese President Xi Jinping stressed that accelerating the establishment of a new development pattern featuring dual circulation, which takes the domestic market as the mainstay and allows domestic and foreign markets boost each other, is a systematic deep-level reform concerning the overall situation of the country.
On top of previous calls for the expansion of domestic demand with supply-side structural reform as a foothold, the meeting covered details on the overall design of the new development pattern.
To build a new development pattern, the country needs to accelerate reforms that help increase the efficiency of resource allocation, and reforms that help improve growth quality and efficiency, said Xi, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission.
Key to keeping the wheels turning in the domestic market is letting the market play a decisive role in the flows of factors including capital, talent, information, technology and land, so that resources can be best allocated, wrote Zhang Xueliang, a professor at the Shanghai University of Finance and Economics, in a co-authored article.
To that end, China in early April unveiled a guideline on improving the market-based allocation mechanism for production factors, outlining specific approaches to maintain the free and orderly flow of each factor.
Tuesday's meeting also emphasized the need to link the construction of a new development pattern with the implementation of a strategy for coordinated regional development and the construction of pilot free trade zones (FTZs).
Coordinated regional development strategies including western development and the revitalization of northeast China can help remove market barriers to ensure domestic circulation, said Zhang.
China's pilot FTZs attracted robust foreign investment and trade in the first seven months of the year despite challenges from the COVID-19 pandemic, playing a positive role in stabilizing foreign trade and investment amid a sluggish international market.
The country's six pilot FTZs launched in August 2019 in the regions of Shandong, Jiangsu, Guangxi, Hebei, Yunnan and Heilongjiang, as well as Shanghai's Lingang Area, a new section of the Shanghai pilot FTZ, attracted 13.11 billion yuan (about 1.9 billion U.S. dollars) of foreign investment during the January-July period, official data showed Wednesday.
The country will continue to pursue the high-quality development of the pilot FTZs and grant them more space to advance reform and opening-up so that they can take the lead in forming the dual circulation, said Tang Wenhong, an official from the Ministry of Commerce.
While calls to establish the new development pattern have been high on authorities' agendas since it was first introduced in May, analysts say Tuesday's meeting reaffirmed its critical role in the country's long-term planning.
With the meeting emphasizing the new development pattern's importance as both a "strategic decision" and a "systematic deep-level reform," it is foreseeable that dual circulation will feature prominently in the country's blueprints for future development, such as the 14th Five-Year Plan (2021-2025), said Liu Yuanchun, vice president of Renmin University of China.
Liu Yuanchun is vice president of Renmin University of China.
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