Xi Jinping focuses on domestic consumption to overcome economic crisis and dispute with US
The Chinese president relies on a group of economists to develop the 14th Five-Year Plan (2021-2025). The “dual circulation” strategy confirmed. The state still at the helm of the economy. Multilateralism invoked, but the US and Europe criticize Beijing’s blocks closures. Chinese experts are calling for greater urbanization and attention to migrant workers. Analysts: Xi's formulas are outdated and have never worked.
Beijing (AsiaNews) - China will rely more on itself without closing itself off to the world. These are the indications that have emerged in recent days during a meeting between Xi Jinping and a group of nine economists. The Chinese president is committed to finalizing the 14th Five-Year Plan (2021-2025), which will be adopted in October by the 5th Plenum of the Central Committee of the Chinese Communist Party.
Following the sessions with the academics, Xi confirmed that the country will follow a "dual circulation" strategy to limit the fallout from the possible economic "decoupling" (separation) from the US and the Covid-19 pandemic.
The trade war with the United States coupled with the coronavirus pandemic have altered the global scenario. A recent Bank of America study stated that the pandemic crisis has destroyed 80% of global supply chain, with China the main manufacturing hub. This has prompted 75% of companies operating in foreign markets - especially those from the US, the European Union, Taiwan, Japan and India - to expand their efforts to bring industrial activities back to their countries of origin.
The Chinese leadership continues to opt for an economy strictly controlled by the state. However, according to Zhang Yuyan, head of the Institute of International Politics and Economics at the Chinese Academy of Social Sciences, China must maintain a multilateral approach in international trade: a response to the "unilateralism" of the United States.
Analysts note that this course of action risks aggravating conflicts with Washington and the European Union. For some time, the US and Europe have accused Beijing of invoking multilateralism on the one hand, and of violating the rules of the World Trade Organization on the other.
To overcome the economic crisis, Lu Ming, a professor at Jiao Tong University in Shanghai, proposed that the government encourage greater urbanization in the country. In his view, large cities are aggregators of economic forces.
However, as noted by Cai Fang, vice president of the Chinese Academy of Social Sciences, urban development cannot fuel economic growth if migrant workers - about 290 million individuals, mostly from rural areas - cannot transfer their residence to the urban centers where they are employed, and are not adequately trained.
Many observers have expressed doubts about Xi's "dual circulation" strategy. They see it as a reinterpretation of the policies of former premier Zhu Rongji and Wen Jiabao, who tried - unsuccessfully - to reduce the country's dependence on exports, betting on domestic consumption as a driving force for the economy.