China pushes 'dual circulation' to power growth in new development stage

Domestic loop

The domestic circulation will be key to the new development pattern, with detailed measures to be rolled out to expand domestic consumption and smoothen supply chains.

The country will remove impediments to the rational flow of production factors, and create a higher-level dynamic equilibrium where supply and demand boost each other, according to the draft outline.

The draft plan also called for efforts to expand the middle-income group in order to unleash the consumption potential.

With its per capita GDP above $10,000 and a middle-income group exceeding 400 million, China is already an upper middle-income economy by the World Bank standard.

The number is likely to double by 2035 amid government efforts to push urbanization, making China the biggest consumption market in the world, said Li Daokui, an economist with Tsinghua University and a national political advisor.

A smooth domestic economic cycle also requires advancement on the supply side, lawmakers and political advisors said, calling for more policy measures to boost innovation.

The country should move faster to support the upgrade of companies so that they can tackle the bottlenecks constraining their growth, said Liu Yonghao, chairman of China's agricultural conglomerate New Hope Group and a national political advisor.

The domestic farming industry, for example, still depends on overseas imports in terms of breeding animals including pigs and poultry, and research on new breeding varieties could reduce external reliance and boost profitability, Liu said.

The draft outline has identified self-reliance in science and technology as a strategic underpinning for national development. For the next five years, China's research and development spending will grow by over 7 percent annually, it said.