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China: Protectionism by any other name

China’s new ‘dual circulation’ economic system aims to slash imports while keeping export growth high. Analysts say it is simple protectionism and will only lead to more trade conflicts.

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The first details about China’s new “dual circulation” economic strategy are emerging.

Beijing will deny it, but its new plan is another nail in the coffin of multilateralism, and yet more evidence of the desire of the great powers to put the needs of their own market above everyone and everything else.

“It’s protectionism, plain and simple,” says Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis.

The new model will be unveiled next month at a meeting of the Chinese Communist Party’s central committee.

All the signs suggest China will set out medium-term plans to be more internally reliant while remaining an export powerhouse. In short, it’s a brash and bold attempt by Asia’s largest economy to get the best of both worlds.

Some analysts scoff at the new dual-circulation model. They say Beijing is tying itself in knots to formulate a strategy that it can claim to have invented itself, rather than plucked from a foreign playbook or textbook.

Two tenets

Yet it is it underpinned by two fairly simple and fundamental tenets.

First, it wants to radically reduce its dependence on imports – particularly in areas such as advanced manufacturing.

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