Beijing is doubling down on efforts to create a stronger domestic market, as it focuses on reducing China’s vulnerability to external tariff shocks even amid a tentative ceasefire in the country’s trade war with the United States.
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Premier Li Qiang said on Thursday that China would continue to anchor its development strategy in bolstering “domestic circulation” – a concept that refers to strengthening the country’s economic self-reliance by creating a robust, unified domestic market – according to the state-run news agency Xinhua.
The country should harness the economy’s “internal stability and long-term growth potential” to “offset rising global uncertainties and keep China’s development on a steady course”, Li stressed at a State Council meeting chaired by Vice-Premier Ding Xuexiang.
Beijing and Washington agreed a temporary deal on Monday to drastically scale back tariffs on each other’s products for the next 90 days, as the world’s two largest economies continue negotiations over a deal to end their protracted trade war.
But the confrontation with Washington appears to have added urgency to China’s efforts to boost domestic demand and reduce the economy’s dependence on overseas trade, analysts said.
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“I think the government has realised China can no longer rely on exports as the dominant growth driver, given the current deglobalisation trend,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.