China spells out Dos and Don'ts for "Dual Circulation"

Ever since first publically appearing in a CPC Central Committee Politburo meeting in May 2020, dual circulation has become a guiding strategy for economic development in China.

Recently, two senior finance officials bylined essays in the People’s Daily to offer the party’s latest thoughts and visions of the strategy going ahead. This newsletter provides a translation of the two pieces.

On domestic circulation, the official listed challenges facing China and called for

▲ Better balancing of expanding domestic demand and deepening of supply-side structural reform

▲ Improving technology independence

▲ Modernizing China’s industrial system

▲ Forging a unified domestic market

On international circulation, the official warned against

▲ An enclosed domestic singular circulation

▲ Passively absorbed into an international circulation

▲ A low-quality international circulation

I

加快构建新发展格局必须增强国内大循环内生动力和可靠性

Boosting the dynamism and reliability of domestic circulation is necessary for accelerating the creation of a new development pattern

祝丹涛, 中央财经委员会办公室经济二局局长

Zhu Dantao, Director, Second Economic Bureau, The General Office of the Central Committee for Financial and Economic Affairs

Accelerating the establishment of a new development pattern is a strategic decision made by CPC Central Committee to realize the Second Centenary Goal and ensure both development and security. The domestic circulation, which plays a major role in the new development pattern, is of great significance to boost the momentum of development and grasp the initiative. In recent years, positive progress has been made in enhancing domestic circulation. However, it is important to note that there are still many obstacles in our work to bolster the domestic market. We should follow President Xi’s instructions on strengthening the dynamism and reliability of the domestic circulation to optimize policies and further smooth domestic economic cycle.

加快构建新发展格局是党中央立足实现第二个百年奋斗目标、统筹发展和安全作出的战略决策。国内大循环是新发展格局的主体，对于形成内生发展动能、掌握发展主动权意义重大。近年来，经过各方面共同努力，畅通国内大循环取得了积极进展。但也要看到，国内大循环还存在不少堵点、卡点、断点，实际工作中还有一些认识和行为偏差。我们要深入贯彻落实习近平总书记关于增强国内大循环内生动力和可靠性的重要指示要求，深化认识，优化政策，改进方法，紧抓重点任务和关键环节，进一步畅通国民经济循环。

增强国内大循环内生动力和可靠性，要更好统筹扩大内需和深化供给侧结构性改革，防止单打一、顾此失彼

Bolstering the dynamic and reliability of domestic circulation dicates better balancing of expanding domestic demand and deepening of supply-side structural reform

Supply and demand are two integral parts of economic development. Dynamic balance and healthy interactions between the two ends are main logic of keeping economic circulation unobstructed. China has effectively responded to 1998 Asian financial crisis and 2008 global financial crisis by expanding domestic demand. As China’s economy had reached a new norm and now facing a complex situation of “Three overlapping layers”①, we have implemented supply-side structural reform since 2015, correcting supply-demand imbalances.

供给和需求是经济发展的一体两面，供需两端动态平衡、良性互动是经济循环畅通无阻的主逻辑。我国通过扩大内需有效应对了1998年亚洲金融危机、2008年国际金融危机冲击。面对经济发展进入新常态和“三期叠加”复杂局面，我们抓住主要矛盾，自2015年起实施供给侧结构性改革，使供需失衡得到矫正。

In recent years, due to the impact of COVID-19, Chinese economy has been faced with triple pressures from shrinking demand, supply shocks and weakening expectations. That means insufficient aggregate demand has been the prominent problem of economic performance, unreasonable income distribution system has restricted growth of consumption, and private investment is expected to grow unsteadily and slowly. At the same time, the supply of products cannot meet the diversified demands of market. Therefore, over expansion of demand will only lead to overcapacity.

近年来受新冠肺炎疫情冲击等因素影响，我国经济面临需求收缩、供给冲击、预期转弱三重压力，总需求不足成为经济运行的突出矛盾，收入分配格局不合理制约居民消费增长，民间投资预期不稳、增长缓慢。同时，供给结构仍不能适应需求结构变化，产品和服务的品种、质量难以满足多层次、多样化市场需求，如果简单扩张需求只会造成产能过剩、需求外流。

For now and the years to come, we must combine expanding domestic demand with deepening supply-side structural reform, creating a dynamic balance at a higher level, in which demand drives supply and supply creates demand. On the one hand, we should expand high-quality demand, form a complete domestic demand system, and strive to expand demand supported by income and investment demand with reasonable returns. That means we should establish long-lasting mechanism that promotes consumption and stimulate the vitality of private investment. On the other hand, we should continue to deepen supply-side structural reform, promote scientific and technological innovation and institutional innovation, so as to meet existing demand with independent, controllable and high-quality supply, and create new demand.

当前和今后一个时期，必须从供需两端发力，既扩大有效需求，又推动生产函数变革调整，把扩大内需战略同深化供给侧结构性改革有机结合起来，形成需求牵引供给、供给创造需求的更高水平动态平衡。一方面，要扩大高质量需求，培育完整内需体系，扩大有收入支撑的消费需求、有合理回报的投资需求。要建立扩大消费长效机制，让老百姓能消费、敢消费、愿消费；健全多元化市场化投融资机制，提高储蓄向投资转化效率，持续激发民间投资活力。另一方面，要继续深化供给侧结构性改革，持续推动科技创新、制度创新，着力突破供给约束堵点，以自主可控、优质有效供给满足现有需求，创造引领新的需求。

①San Qi Die Jia: to deal simultaneously with the slowdown in economic growth, making complex structural adjustments, and absorbing the effects of the previous economic stimulus policies.

增强国内大循环内生动力和可靠性，关键在实现科技自立自强，坚决防止被别人“卡脖子”

Realize Self-Reliance in Science and Technology to prevent “chokeholds“ is crucial to improving the dynamic and reliability of domestic circulation.

Innovation is at the heart of China’s modernization drive. For a major developing country like China, self-reliance in science and technology is not only a question of development but also a matter of survival.

创新在我国现代化建设全局中居于核心地位。对我们这样的发展中大国，科技自立自强是必需品而非奢侈品，不仅是发展问题，更是生存问题。

Science and technology have always been an arena for competition among major powers. In recent years, the escalated conflicts in core technology industry between China and U.S. has intensified, laying bare China’s insufficient innovation capacity and efficiency. The main obstacles are 1. absense of core technology and know how; 2. inadaquete and ill-structured R&I input that undermine orginality; 3. Research institutions insulate themselves from the market and produce papers of little actual use; 4. Businesses yet to become the main driver of innovation, overemphizing on business model innovation while overlooking tech innovation; 5. A tech-industry-finance tri-sector cycle is yet to emerge, restraining return on tech investment.

科技历来是大国博弈的主战场，近些年美国对华科技遏制不断升级，最近出台的一系列法案和管制措施更是变本加厉，我国创新体系整体效能不高、创新能力不足问题凸显。主要是，关键核心技术受制于人，“卡脖子”问题亟待破解；基础研究投入总量不足、结构不优，原始创新能力较弱，缺少从0到1的原创性成果；高校、科研院所科研活动存在脱离经济主战场而自我循环现象，做科研、写论文是为评职称、拿“帽子”，最后上了书架、进了柜子，钱变纸（论文）易、纸变钱难；企业还没有成为科技创新主体，大量停留在商业模式、实用技术创新，“硬科技”创新少；“科技—产业—金融”循环存在堵点，科技投入产出效率不高。

Addressing those problems has become a top priority. The obstacles that we must overcome are lacking of innovation and high-level self-reliance in scientific and technology, and the stranglehold some countries have tightened on China's development of core technologies. To tackle those problems, we should fully take advantage of our whole-of-country capabilities as supported by China’s market economy with socialist characteristics, give more investment in basic research, build up our country’s strategic scientific and technological strengths and ensure better allocation of innovation-related resources to achieve breakthroughs in core technologies in key fields. We should ensure the leading role of enterprises in scientific and technological innovation, and promote closer business-led collaboration between industries, universities, and research institutes to develop innovation-oriented enterprises with sustained competitiveness. We must rely on talents to pioneer and to propel development, and create an enabling environment for talents to work and start their own businesses, attracting the brightest minds from all over. We need to speed up the development of a high-quality education system, stimulate students’ creativity and strengthen their practical ability in order to enable education to better serve innovation.

解决这些问题已经成为当前的头等大事。加快科技创新和高水平自立自强步伐，加快攻克重要领域“卡脖子”技术，这是必须要爬的坡、要过的坎。要充分发挥社会主义市场经济条件下的新型举国体制优势，加强基础研究，强化国家战略科技力量，优化创新资源配置，打好关键核心技术攻坚战。要确立和强化企业科技创新主体地位，加强企业主导的产学研深度融合，发展出一大批有持续竞争力的创新型企业。要学会在斗争中求合作，稳住和拓展国际合作，形成具有全球竞争力的开放创新生态。要坚持人才引领驱动，为人才干事创业创造良好环境，让顶尖人才愿意来、留得住、干得好。要加快建设高质量教育体系，守护好奇心，鼓励探究本源，激发创造力，增强实践力，促进教育更好为创新服务。

增强国内大循环内生动力和可靠性，必须加快建设现代化产业体系，改变大而不强局面

Speed up the establishment of modernized industrial system is necessary for improving the dynamic and reliability of domestic circulation

The foundations of a well oiled domestic circulation are the establishment of modernized industrial system and integration of all sectors in national economy. The key to developing modernized industrial system is to ensure that the system is independent, under control, safe, reliable, competitive, adaptive to advanced technology and offers enhanced manufacturing capability and quality service, supporting efficient production and high-level national income.

建设现代化产业体系，实现国民经济各产业有机链接、高效畅通是国内大循环畅通的基础。建设现代化产业体系关键是做到自主可控、安全可靠、竞争力强，利用先进适用技术，增强制造和服务能力，有力支撑高效率社会生产和高水平国民收入。

At present, China’s industrial chain still lies in the middle and low end of the international division of labor. In general, 1. China’s industrial chain is large in scale but short in competitiveness; diverse in variety but limited in participation of the supply chain, complete in terms of sectors but falling short of the higher end; 2. China’s industrial chain is quite weak, with basic parts, basic material, basic processing skill, basic industrial technology exposed to the risk of severing supply chains and decoupling; 3. China’s industrial chain is under outflowing pressure, namely, returning of the medium-high end of industry chain to developed countries and the diversion of the medium-low end to developing countries; 4. China’s industrial chain is repetitive and chaotic investment in emerging industries; 5. Large enterprises are not strong enough to lead industrial development and set standards while SMEs are weak in competitiveness and upgrading ability and enterprises that use special and sophisticated technologies to produce novel and unique products are quite few.

当前，我国产业链还处于国际分工体系的中低端，总体上大而不强、宽而不深、全而不精；产业基础能力薄弱，基础零部件、基础材料、基础工艺、产业技术基础存在“断链”“脱钩”风险；产业链面临中高端向发达国家回流、中低端向一些发展中国家分流的两头受挤压力；新兴产业培育存在一哄而上、低水平重复建设问题；世界500强企业数量虽居首位，但大企业引领发展与产业系统定义能力还不强，中小企业数量庞大，有活力，但市场竞争力弱、升级能力不足，单项冠军、专精特新企业偏少。

In the future, we should modernize the industrial system in an all-round way. 1. We will consolidate our leading position in industries where we excel, promote the integrated development of advanced manufacturing and modern service industries, and focus on moving the manufacturing sector toward higher-end, smarter, and greener production. 2. We should boost emerging strategic industries such as integrated circuits, lathe machines, new energy and biopharmaceuticals. 3. We should invest in industries of the future, such as quantum computing, aerospace technology, brain science and brain-like intelligence. 4. We need to develop digital economy, build internationally competitive digital industry clusters.

未来一个时期，要站稳脚跟、练好内功、逆势而上，全面提升产业体系现代化水平。要巩固提升传统优势产业领先地位，推动先进制造业和现代服务业融合发展，重点提升高端化、智能化、绿色化水平。要发展壮大战略性新兴产业，做强做大集成电路、工业母机、新能源、生物医药等产业。要前瞻布局未来产业等新赛道，加快量子计算、空天技术、脑科学与类脑智能等前沿技术和产业发展应用。要大力发展数字经济，打造具有国际竞争力的数字产业集群，支持平台企业在引领发展、创造就业、国际竞争中大显身手。

增强国内大循环内生动力和可靠性，必须加快建设全国统一大市场，防止出现局部小循环

Accelerate the forming of a national unified market and break up localized circulation

Domestic circulation is for the whole country. It means that we should build a national unified market and prevent local self-circulation and barriers between provinces, cities, and counties. Only in this way, can we further expand trade scope, explore the depth and breadth of market, deepen the division of labor, and increase economic efficiency, unleash the growth potential of China’s economy.

国内大循环是针对全国范围而言的，是要建设全国统一的大市场，各地不能各自为政、封闭运行，不能搞省内、市内、县内的自我小循环。唯有这样，才能进一步扩大交易范围、拓展市场深度和广度、深化分工体系、提高经济效率，才能有效释放中国作为超大经济体所蕴含的规模和范围经济巨大空间。

In reality, some local governments are concerned that if they integrate into domestic market, local revenes and local economic resources may sapped by developed regions. As a result, 1. some local governments manipulate government purchasing process and invent countless schemes to protect local businesses. 2. In some regions, cutthroat competition frequently appears when attracting investment and shell companies are conjured up to cheat subsidies; 3. There is an absence of cross-region development coordination mechanism so that resources cannot be allocated across the country to achieve greatest efficiency; 4. Human resources, land and captial flow in single direction from rural to urban regions, while the flow in opposite direction face institutional obstacles. These various types of local circulation are harmful to both regional and national economy.

现实情况是，一些地方担心纳入大循环会使当地市场被外地企业占领、资源被发达地区掏空、税源流失；一些地方为了实现买本地产品、用本地企业，政府采购、招投标等领域“外招内定”“明招暗定”行为屡禁不止，行政干预和地方保护手段多样、层出不穷，差别化监管和执法现象较多；一些地方招商引资乱象频出、恶性“内卷”，甚至出现“皮包公司”骗补；跨区域协调联动发展机制欠缺，资源要素全国范围合理高效配置受到制约；乡村的人才、土地、资金等要素持续单向流出，但城市资源要素“下乡”还有不少体制机制障碍。出现这些各式各样的自我小循环，看似局部正确、短期可行，但实质上是以低层次自我循环取代高水平全域循环，不仅弱化自身长期发展竞争力，也不利于国家经济发展全局。

In the future, 1. We will strengthen economic ties between urban and rural areas, smooth economic circulation between urban and rural areas, and promote integrated urban and rural development; 2. We will promote deeper integration of the strategies for coordinated regional development, major regional strategies, and functional zoning strategies and optimize the distribution of major productive capacity; 3.We will formulate indiscrimitory unified market access requirements, rules of competition and the supervision and law enforcement systems to stimulate vitality of business entities; 4.We must get rid of regional blockades and trade monopolies to allow free movement and efficient allocation of goods and production factors across the country.

未来一个时期，要增强城乡经济联系，畅通城乡要素流动，推动城乡融合发展。推动区域协调发展、区域重大战略、主体功能区战略等深度融合，优化重大生产力布局。加快构建无歧视性的统一的市场准入要求、竞争规则和监管执法体系，激发经营主体活力。坚决打破区域封锁和市场分割，促进商品和要素自由流动和高效配置，为增强国内大循环内生动力和可靠性提供统一开放、竞争有序、富有深度和广度的雄厚市场基础。

China has the world’s largest industrial system and complete industrial supporting capacity, with strong ability of technological innovation and industrial production. As the further industrialization and urbanization, the huge Chinese market has unlimited potential and the country has the conditions and capabilities to promote sustainable economic increase relying on domestic industrial division and domestic demand. We should maintain strategic focus and strengthen systematic perspective to overcome obstacles that restrict domestic circulation by implementing reform. We need to give full play to the role of entrepreneurs and fully mobilize the initiative of all sectors to smooth the circulation of all production elements and promote  coordinated development. We will reinforce the mainstay of domestic circulation and continuously increase attraction and driving force for the international circulation to open up new prospects for high-quality development.

中国拥有全球最完整、规模最大的工业体系和完善的产业配套能力，具备较强的技术创新能力和强大产业生产能力，工业化、城镇化仍处于深入发展阶段，市场空间和潜力巨大，具备依靠国内产业分工和国内需求驱动经济长期合理增长的条件和能力。要保持战略定力，强化系统观念，明确方向、把握重点、辩证施策，以改革的办法着力破除制约国内经济循环的堵点卡点，有效发挥企业家作用，充分调动各方面积极性，释放需求潜力，增强供给能力，提高保障能力，使生产、分配、流通、消费各环节，科技—产业—金融、城乡、区域各方面畅通循环，进一步夯实国内大循环在国内国际双循环中的主体地位，不断增强对国际循环的吸引力、推动力，开创高质量发展新局面。

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II

Improving the quality and the level of international circulation is a must to build a new development pattern

加快构建新发展格局必须大力提升国际循环质量和水平

Zhao Peng, Director, Fifth Economic Bureau, General Office of the Central Committee for Financial and Economic Affairs

赵  鹏 中央财经委员会办公室经济五局局长 

Building a "dual circulation" development pattern is a major medium and long-term development strategy proposed by General Secretary Xi Jinping at the meeting of the Central Committee for Financial and Economic Affairs in April 2020②. It has global guiding significance for promoting high-quality development and building a modern socialist country in an all-around way.

构建以国内大循环为主体、国内国际双循环相互促进的新发展格局，是习近平总书记2020年4月在中央财经委员会会议上提出的中长期重大发展战略，对于推动高质量发展、全面建设社会主义现代化国家具有全局性指导意义。

The international economic cycle, like the domestic one, is an important and indispensable part of the new development pattern, and the two are closely linked to form an organic whole. The 20th Party Congress proposed " boosting the dynamism and reliability of the domestic circulation while boosting the quality and scale of the international circulation." We must fully and accurately grasp the intrinsic link between the two and accelerate the construction of a new development pattern in the new journey of the new era.

国际经济循环同国内大循环一样，都是新发展格局不可或缺的重要组成部分，二者紧密联系，是一个有机的整体。党的二十大提出“增强国内大循环内生动力和可靠性，提升国际循环质量和水平”。我们要全面准确把握好二者的内在联系，在新时代新征程上加快构建新发展格局。

② The phrase first appeared publically in May 2020 but was first coined in a speech by Xi at the 7th meeting of the Central Committee for Financial and Economic Affairs in April 2020, which was not made publically available immediately after the meeting. Qiushi later published the April speech in November 2020.

Build an open dual circulation, avoid closed single domestic circulation

构建新发展格局需要打造开放的国内国际双循环，不能搞封闭的国内单循环

Under the conditions of a market economy, the market size determines the degree of labor division, and the degre of labor division determines the level of productivity and income. The most fundamental feature distinguishing a modern economy from a pre-modern one is the organization of production, resource utilization, and exchange of commodities in an ever-expanding market scope, which in turn futher deepens the labor division and improves efficiency. The wider range a country develops markets and utilizes resources in, the stronger its economy will be and the higher its income level will be.

在市场经济条件下，市场规模决定分工深度，分工深度决定生产力水平和收入水平。现代经济区别于前现代经济最根本的特点，就是在不断扩大的市场范围中组织生产、利用资源、交换商品，从而持续深化分工、提高效率。越是能够在更广范围内开拓市场、利用资源的国家，其经济也就越强大，收入水平越高。

Modern world history's experiences and lessons repeatedly show that closeness leads to backwardness and openness brings prosperity. Countries that have successfully modernized have all achieved sustained economic growth and rising per capita income levels by leveraging their comparative advantages and actively participating in international circulation. From our own development experience, actively participating in the international circulation is a decisive factor for the miraculous long-term rapid economic development since the reform and opening up. It is the basis on which we must firmly participate and continuously improve the international economic cycle.

世界近现代史正反两方面的经验反复说明，封闭导致落后，开放带来繁荣。成功实现现代化的国家，全都是通过发挥比较优势、积极参与国际循环来实现经济持续增长和人均收入水平提升。从我国自身发展经验看，改革开放以来之所以能取得经济长期快速发展的奇迹，积极参与国际大循环是一个决定性的因素，这是我们必须坚定参与并不断提升国际循环的根本依据。

China's economy has been deeply integrated into the world economy, with close industrial and market linkages with countries worldwide. The domestic and international demand markets are interdependent and mutually promote each other. Emphasizing the leading role of the domestic economic circulation is not to abandon or weaken the international economic circulation, but to give full play to China's economic advantages as a large country, and to better integrate and develop the dual circulation.

当前，我国经济已经深度融入世界经济，同全球很多国家有着紧密的产业和市场关联，内外需市场本身就是相互依存、相互促进的。强调以国内大循环为主体，绝不是不要国际循环或弱化国际循环，关起门来封闭运行，而是要发挥大国经济优势，使国内大循环和国际循环在更高层次上实现结合和互动，增强国内国际两个市场两种资源的联动效应，为全面建设社会主义现代化国家提供物质支撑。

Since the international financial crisis in 2008, the worldwide trend of anti-globalization has risen. Unilateralism and protectionism have risen significantly, and economic globalization has encountered a counter-current. Especially in recent years, under the influence of the pandemic and geopolitical factors, global problems have intensified. And the world has entered a new period of turbulent change. However, we must see that the international division of labor and trade still benefits the economic development of all countries, and economic globalization is still the general direction to develop the productivity of the modern world. The potential of global trade and division of labor is far from depleted, and there is still broad space for countries to achieve joint development through the international division of labor and trade.

2008年国际金融危机以来，世界范围内逆全球化思潮抬头，单边主义、保护主义明显上升，经济全球化遭遇逆流，特别是近几年在世纪疫情和地缘政治等因素影响下，全球性问题加剧，世界进入新的动荡变革期。但必须看到，这些变化并没有改变国际分工和贸易有利于各国经济发展的基本逻辑，经济全球化仍是现代世界生产力发展的大方向。全球贸易和分工的潜力远远没有耗尽，各国通过国际分工和贸易实现共同发展的空间仍十分广阔。

China's development cannot be separated from the world, and vice versa. Some countries are undermining the established international economic order for their own interests. They try to use their powerful status to decouple or sever supply chains, and build up high fences in their small economic yard, trying to kick China out of the global market and industrial system, and shape "globalization without China." This is contrary to the direction of historical progress and the objective laws of economic development, and is impossible to achieve.

中国的发展离不开世界，世界的发展也离不开中国。有的国家从一己私利出发，破坏既有的国际经济秩序，企图利用其强势地位，搞脱钩断链、小院高墙，试图把中国从全球市场和产业体系中切割出去，塑造“没有中国的全球化”。这种做法违背了历史进步的方向和经济发展的客观规律，是不可能实现的。

In the face of the complicated international environment, we must adhere to opening up to the outside world and constinously improve the quality and scale of the international circulation. In the new development pattern, the domestic economic circulation is the basis and plays the leading role, and participation in the international economic circulation indispensible to participate in globalization and the international industrial labor division.

面对纷繁复杂的国际环境，我们必须“不畏浮云遮望眼”，认清大势，坚定信心，排除干扰，坚守正道，坚持高水平对外开放，不断提升国际循环质量和水平。在新发展格局中，国内大循环是基础和主体，参与国际循环则是经济全球化和国际产业分工格局下的必然要求。

Facing obstacles in international circulation, we promote the formation of a macro and well functioning domestic economic circulation. Strengthening the leading role of the domestic economic cycle is conducive to stabilizing domestic economy and enhancing economic resilience. On the other hand, it can better drive and vigorate the international economic circulation, provide more market opportunities for other countries, attract high-quality global resources to China, meet domestic demand and enhancing industrial and technological development, bolstering advantages in international economic cooperation and competition, and making the dual cycles mutually beneficial and complementary.

在国际循环受到干扰的情况下，我们推动形成宏大顺畅的国内经济循环，强化国内大循环的主体地位，一方面有利于稳定国内经济基本盘，增强经济发展韧性，与时俱进提升我国经济发展水平，另一方面能更好带动和激活国际循环，为各国提供更多市场机会，使我国成为吸引全球优质要素资源的强大引力场，在满足国内需求的同时提升我国产业技术发展水平，形成参与国际经济合作和竞争新优势，使国内循环和国际循环相互促进、相得益彰。

The dual circulation does not compromise opening up, but rather promotes it. Looking ahead, the scale of China's import and export, foreign capital utilization and foreign investment will continue to expand, and its position in the international economy will continue to rise.

构建新发展格局绝不意味着对外开放地位的下降，而是意味着更高水平的对外开放。我们必须把握好国内国际两个循环的辩证关系，协同推进扩大内需、供给侧结构性改革和高水平对外开放。展望未来，我国外贸进口和出口、利用外资、对外投资的规模将会持续扩大，在国际经济中的地位也会继续提升。

Better balance openness and security, avoid passively being absorbed into the international circulation

构建新发展格局需要更好统筹开放和安全，不能陷入消极被动的国际循环

With the changes in the international environment and the continuous development of our economy, the role of China in the global economic system is undergoing profound changes. China will inevitable encounter various challenges and will be compelled to adjust the way of participating in the international circulation.

随着国际环境变化和我国经济不断发展壮大，我国在全球经济体系中的角色正在发生深刻变化。在全面建设社会主义现代化国家的新征程上，不可避免要遇到来自外部的各种干扰和阻碍，会遭遇风高浪急甚至惊涛骇浪的考验，参与国际循环的方式必然要进行相应调整。

In the face of the new challenges and uncertaintie, we must balance development and security, and avoid passive falling into an international circulation that is characterized as dependent solely on external demand, overly reliante on external technology and resources, and lacking security risk prevention and control mechanisms.

构建新发展格局，就是党中央针对我国发展环境条件变化，准确识变、科学应变、主动求变，着眼全局和长远提出的重大战略部署。面对新的充满挑战和不确定性的发展环境，我们必须统筹发展和安全，主动谋划，积极作为，在开放中把握战略主动，塑造积极可控的主动型国际循环，避免陷入单纯依靠外需拉动、过度依赖外部技术和资源、安全风险防控机制缺失的被动型国际循环。

The market is a scarce resource worldwide. As a super-sized country, China has a large domestic market that many countries do not have, which is the material basis of the "dual circulation" and is the unique advantage for China to proactively shape the international circulation now.

市场是全球的稀缺资源。中国作为超大规模国家，拥有很多国家所没有的巨大国内市场，这是“双循环”的物质基础，是我国在新的历史条件下主动塑造国际循环的独特条件和优势。

Currently, China's economy accounts for more than 18% of the global total and contributes around 30% to global economic growth. China ranks first in the world in terms of trade of goods and services, and is a major trading partner of more than 140 countries and regions. With more than 1.4 billion people, China accounts for nearly one-fifth of the world's population, more than the combined population of existing developed countries. China's GDP per capita is close to the threshold of high-income countries. The overall advancement of more than 1.4 billion Chinese into a modern society means replicating a market almost the size of the existing developed countries combined, with vast business opportunities.

目前，我国经济总量占全球比重超过18%，对全球经济增长的贡献在30%左右，货物和服务贸易规模居世界第一，是140多个国家和地区的主要贸易伙伴。中国有14亿多人口，占全球的近1/5，超过现有发达国家人口总和。中国的人均国内生产总值接近高收入国家门槛，14亿多中国人整体迈进现代化社会，意味着几乎再造一个相当于现有发达国家规模总和的市场，这个过程将创造十分巨大的商业机会。

The combination of a massive domestic market and an open international market has brought many significant advantages to China's economic development. Among them, the most prominent advantages are the scale economy, innovation, development, and the ability to resist shocks. Relying on these advantages, China has formed the world's largest and most complete manufacturing system, a strong supply capacity to meet diversified international and domestic needs, an industrial ecology rich in creative vitality, and a relatively stable macroeconomic environment. This provides a solid foundation for Chinese enterprises to participate in international labor division and competition, and creates a highly favorable industrial and market environment for enterprises worldwide to invest in China.

超大规模国内市场加上开放的国际市场，给中国经济发展带来很多显著优势，其中最为突出的是规模经济优势、创新发展优势和抗冲击能力优势。依靠这些优势，中国形成了世界上规模最大、门类最齐全的制造业体系，形成了满足国际国内多样化需求的强大供给能力，形成了富于创造活力的产业生态，形成了较为稳定的宏观经济环境。这为中国企业参与国际分工和竞争提供了坚实基础，也为各国企业投资中国创造了极为有利的产业和市场环境。

We should fully play our comparative advantages and actively shape a high-level international circulation. Once the domestic cycle has a strong domestic demand market, self-sustaining and self-improving science and technology, complete and sound industries, and strong resource supplies, we will be capable of withstanding the impact of various extreme situations. In this way, we can also expand the opening up, become more confident when participating in international cooperation and competition, be more capable of restraining various protectionist and unilateralist behaviors, and better promote international circulation. A well functioning international circulation will bring more high-quality resources and more diversified and stable market demand to the domestic circulation, promote the improvement of the market mechanism, and facilitate the development and growth of a modern domestic economic system.

我们要发挥好自身比较优势，不断巩固提升我国在全球分工体系中的地位，提升抵御各种风险挑战的能力，积极塑造高水平的主动型国际循环。主动型国际循环以强大稳健的国内大循环为基础。有了内需市场强劲、科技自立自强、产业完备健全、资源要素保障有力的国内大循环，我们就能够抵御各类极端情况冲击，扩大对外开放、参与国际合作和竞争就更有底气，也更有能力抑制各种保护主义、单边主义行为，能够更好地促进国际循环。畅通的国际循环会给国内大循环带来更加丰富的高质量要素资源、更加多元稳定的市场需求，促进市场机制的完善，有利于国内现代化经济体系发育成长。

Over the past three years, China's economy has grown steadily despite the considerable impact of protectionism and the pandemic on the global economy and trade. China's foreign trade has still grown significantly, with total imports and exports growing more than 10% at an average annual rate and exports at 11.6%. This shows that as long as we proactively respond to changes, adopt the right strategies and play to our own strengths, we can overcome the impact of various adverse factors and proactively shape the international circulation to promote domestic economic development and common global prosperity.

过去3年，尽管全球经济贸易受到保护主义和世纪疫情的巨大冲击，但中国经济稳定发展，对外贸易逆势大幅增长，进出口总额年均增长超过10%，出口年均增长11.6%。说明只要主动谋变应变，采取正确策略，发挥好自身优势，就能够克服各种不利因素影响，主动塑造国际循环，促进国内经济发展和全球共同繁荣。

We must adhere to the right direction of economic globalization, continuously make new friends, work with all peaceful and progressive forces to promote building an open world economy, and maintain a diversified and stable international economic pattern and trade relations. We will actively participate in the reform and construction of the global governance system, adhere to true multilateralism, actively form and maintain various international economic and trade rules, oppose the exclusive small circles and camps of specific countries, and promote the WTO, APEC and other multilateral mechanisms to play a better role. Promote the high-quality development of the "One Belt, One Road", consolidate and strengthen the economic relations with developing countries and neighboring countries, and promote common prosperity and development. Promote the diversification and stabilization of overseas markets and supply chain systems, and improve the resilience and stability of the international cycle. Strengthen the construction of international circulation support systems in the fields of standards, laws, logistics, etc., and gradually promote RMB internationalization.

我们要坚持经济全球化正确方向，不断扩大朋友圈，同一切和平进步力量一道推动建设开放型世界经济，维护多元稳定的国际经济格局和经贸关系。积极参与全球治理体系改革和建设，坚持真正的多边主义，积极参与制定和维护各类国际经贸规则，反对搞针对特定国家的阵营化和排他性小圈子，推动世界贸易组织、亚太经合组织等多边机制更好发挥作用。推动共建“一带一路”高质量发展，巩固加强与发展中国家和周边国家的经贸关系，推动共同繁荣和发展。促进海外市场和供应链体系多元化、稳健化，提高国际循环的韧性和稳定性。加强标准、法律、物流等领域国际循环支撑体系建设，有序推进人民币国际化。

We must firmly defend our legitimate rights and interests in foreign trade and economic cooperation and oppose all forms of protectionism, unilateralism and bullying. Actively use internationally accepted economic and trade rules and dispute settlement mechanisms to safeguard business entities' legitimate rights and interests, including foreign-funded enterprises, in China. We should focus on overall and dynamic security, and comprehensively improve our ability to maintain national security under the opening up. Build up proper institutional arrangements for security reviews, anti-monopoly investigations and other internationally accepted arrangements. Scientifically set the level of openness to adapt to security protection capabilities, and promote the opening measures in a steady and orderly manner. Enhance the stability and security of international circulation, and effectively protect national sovereignty, security and development interests.

我们要在对外经贸合作中坚定维护自身正当权益，反对各种形式的保护主义、单边主义和霸凌行径，积极运用国际通行经贸规则和争端解决机制，以法律和经济手段维护包括在华外资企业在内的中国经营主体的合法权益。要着眼总体安全、动态安全，全面提高开放条件下维护国家安全的能力，健全安全审查、反垄断调查等国际通行的制度性安排，科学设定适应安全防护能力的开放水平，稳妥有序推进各项开放措施，提升国际循环稳定性安全性，有效维护国家主权、安全和发展利益。

Promote high-level openness, and prevent low-level expansion in the international cycle

构建新发展格局需要推动高水平对外开放的高质量国际循环，防止低水平数量扩张的低层次国际循环

China has experienced a period of continuous and rapid expansion of foreign trade in previous years, which has played a great role in economic development and improving people's livelihood. But there were also problems such as sloppy expansion, low-price vicious competition, excessive consumption of resources and environment, and an excessive trade surplus. To build a new development pattern, we need to promote a high level of openness, steadily expand system-based openness such as the rules, regulations, management, and standards, and effectively enhance the quality and efficiency of China's participation in the international circulation.

我国此前一些年经历过对外贸易持续快速扩张的时期，对经济发展和民生改善发挥过巨大作用，但也存在扩张方式粗放、低价恶性竞争、过度消耗资源环境、贸易顺差过大等问题。新时代新征程上构建新发展格局，需要推动高水平对外开放，稳步扩大规则、规制、管理、标准等制度型开放，有效提升我国参与国际循环的质量和水平。

We need to become a major trading country with high standards and better integrate ourselves in the global division of labor. Expand the worldwide network of high-standard free trade zones, actively seek joining CPTPP and DEPA, and take the initiative to deepen domestic reforms in related fields by relevant rules, regulations, management, and standards. Upgrade the trade in goods, innovate the trade in services, and vigorously develop digital trade. Improve the branding, quality and distribution channels of export products, make greater efforts to develop international markets, stabilize the scale of foreign trade and optimize trade structure.

我们要高标准建设贸易强国，培育国际经贸合作新增长点，在更高层次、更大范围深度参与全球产业分工和合作。扩大面向全球的高标准自由贸易区网络，积极推动加入《全面与进步跨太平洋伙伴关系协定》（CPTPP）和《数字经济伙伴关系协定》（DEPA）等高标准经贸协议，主动对照相关规则、规制、管理、标准，深化国内相关领域改革。推动货物贸易优化升级，创新服务贸易发展机制，大力发展数字贸易。加强出口产品品牌、质量、渠道等建设，更大力度开拓国际市场，稳定对外贸易规模，优化贸易结构。

We must actively create a market-oriented, law-based, and internationalized first-class business environment, and make greater efforts to attract and make good use of foreign investment. Further expand market access, reasonably reduce the negative list of foreign investment, and increase the opening up of the modern service industry. Fully implement national treatment for foreign-funded enterprises, promote fair competition, and protect the rights and interests of foreign investment and business in accordance with the law. Provide services for foreign-funded enterprises that accurately respond to their concerns, solve practical problems, provide maximum convenience for foreign investors to engage in trade and investment negotiations in China, and take effective measures to stabilize and retain enterprises that are pressured to leave China. Actively land landmark foreign investment projects, and pay more attention to attracting small and medium-sized foreign investment enterprises to invest in China.

我们要积极营造市场化、法治化、国际化一流营商环境，更大力度吸引和用好外资。进一步扩大市场准入，合理缩减外资准入负面清单，加大现代服务业领域开放力度。落实好外资企业国民待遇，促进公平竞争，依法保护外商投资和经营权益。有针对性地做好外资企业服务工作，积极回应外资企业关切，解决各类实际问题，为外商来华从事贸易投资洽谈提供最大程度的便利，采取有效措施稳定和留住有外迁压力的企业。积极推动外资标志性项目落地建设，更加注重吸引中小外资企业来华投资。

We should optimize opening-up of various regions, upgrade pilot free trade zones, and promote balanced and sustainable development of the domestic, and regional economy with the international circulation. Consolidate the pioneering position of opening up in the eastern coastal areas, improve the level of opening up the central, western and northeastern regions, accelerate the construction of new land-sea trade corridors in the west, and create a number of regional development hubs serving a high level of international circulation. Take advantage of the pilot free trade zone, Hainan free trade port, various development zones and free trade zones, and other open platforms. Under the premise of security, we should actively explore the rules, regulations, management and standards of the pilot high-standard economic and trade agreements, and continuously improve the quality and level of international trade and investment cooperation.

我们要优化区域开放布局，实施好自由贸易试验区提升战略，发挥国际循环对国内区域经济均衡可持续发展的促进作用。巩固东部沿海地区开放先导地位，提高中西部和东北地区开放水平，加快建设西部陆海新通道，打造一批服务高水平国际循环的区域发展枢纽。发挥好自由贸易试验区、海南自由贸易港、各类开发区和保税区等开放平台的先行先试作用。在确保安全前提下，积极探索试点对标高标准经贸协议的规则、规制、管理、标准，不断提升国际贸易投资合作质量和水平。

Note: This is an unofficial translation of the PD pieces and is for your reference only. Please refer to orginal article for the most precise meaning.