The new development pattern—sometimes translated by Chinese state media as the new development dynamic—describes a proposed structure for the Chinese economy that was first introduced to the Party in the early stages of the coronavirus pandemic and subsequently adopted as a guiding principle in the China’s Fourteenth Five Year Plan (2021-2025). As a blueprint for China’s future development, the new development pattern imagines a country whose economic growth and technological progress is not dependent on fickle global markets or foreign HOSTILE FORCES. While urging China towards self-reliance, the new development pattern is not a call for autarky. Instead, Xi Jinping instructs cadres to engineer a pattern of growth where “the domestic cycle is the mainstay, with the domestic cycle and international cycle providing mutual reinforcement.” (Xi 2022, p. 178). Under this “dual cycle” or “dual circulation” [双循环] formula, China is expected to contribute to and benefit from global markets even as it transitions towards an economic model whose near-term growth primarily flows from domestic demand for Chinese goods and whose long term promise rests on China’s indigenous capacity for scientific and technological innovation.
Chinese economists first began characterizing China’s economic development in terms of “large scale cycles” [大循环] in the era of Deng Xiaoping. In 1987 Wang Jian, an economist then working for the State Planning Commission, proposed that China’s future growth could be best guaranteed by securing a place in the “large-scale international cycle” of trade and capital. Burdened with decaying heavy industry and a surplus pool of labor, Wang argued that China could reverse these trends by developing light industries like textiles and consumer appliances. The slogan “two ends extending abroad, with a high-volume of imports and exports” [两头在外, 大进大出] captured the logic of the proposed development pattern. Under this schema, Chinese firms would first purchase raw materials for production from foreign markets (one of the two “ends extending abroad”), exploit China’s surplus labor to manufacture goods at low cost, and then sell the finished products in the global marketplace (the other “end” of the slogan). Trade would occur at volumes high enough to accumulate foreign exchange, which in turn could be used to purchase the new machinery needed to revitalize China’s out-of-date heavy industries. Enmeshing China in the “large-scale international cycle” of trade and capital flows outside of China would thus create a virtuous cycle of climbing wealth and growing industry inside China.
This strategy was openly endorsed by General Secretary Zhao Ziyang; under his successors Jiang Zemin and Hu Jintao the integration of the Chinese economy with the global market would continue apace. There was a quiet geopolitical calculation behind this development strategy. The “two ends extending abroad” approach took economic interdependence as a prerequisite for China’s continued growth. This required a period of time where China could safely leverage the gains of integration without provoking opposition from foreign powers alarmed by its growing strength and wealth. Party leaders concluded that globalization would offer China such a PERIOD OF STRATEGIC OPPORTUNITY—a period they predicted would last through the first two decades of the 21st century.
These predictions proved prescient: globalization's assigned role in Chinese economic growth was downgraded as the 2010s came to a close. Two developments would undermine the choice position of global integration in Chinese development planning. The first was a waning commitment to economic growth as the be-all and end-all of the Party’s work. When Xi Jinping came to power, the negative consequences of the Party’s growth-at-all-costs mindset were apparent: noxious pollution, rising class tensions, regional wealth disparities, massive debt on local government ledgers, and a ubiquitous culture of corruption all undermined the Party’s quest for national rejuvenation. To address these problems Xi Jinping incorporated a new intellectual framework for economic development inside the Thirteenth Five Year Plan (2016-2020). This framework, dubbed the NEW DEVELOPMENT CONCEPT, instructed cadres to prioritize “high quality development” [高质量发展] over narrower metrics of GDP growth. The concept called for the Party to achieve these aims by transitioning away from growth driven by fixed asset investments and cheap foreign exports to growth driven by domestic consumption and high end manufacturing at the edge of the technological frontier.
Parallel to these changes in development philosophy was the transformation of Chinese security theory. Under the auspices of Xi Jinping’s TOTAL NATIONAL SECURITY PARADIGM, Chinese security officially began to blur existing distinctions between hard and soft power, internal and external threats, and traditional dividing lines between the worlds of economics, culture, and diplomacy. From this viewpoint, emerging problems in any of these domains might threaten the Party’s hold on power and thus must be viewed through the lens of regime security. Viewed from this perspective, the economic gains that international integration promised must be balanced against increased exposure to hostile forces from the outside world.
These two streams—economic planning and security strategy—began to merge as American export controls and tariffs placed pressure on the Chinese economy. The high-tech development strategy envisioned by the New Development Concept assumes access to crucial technological components that Chinese firms do not yet have the capacity to manufacture. Party leaders began to worry that without the capacity to manufacture these components at home, China’s ADVANCE TO THE CENTER OF THE WORLD STAGE might be held hostage by hostile foreign powers. These anxieties were only reinforced by the dramatic drop in global demand for Chinese goods and equally dramatic rise in global anti-China sentiment caused by the 2020 pandemic. The lesson was clear: the PERIOD OF STRATEGIC OPPORTUNITY was closing. Chinese development was dangerously dependent on foreign powers. In this environment China could no longer afford a development pattern that prioritized economic growth and global integration over self-reliance.
“We have become more aware that security is a prerequisite for development and development guarantees security,” Xi concluded in a Politburo study session in October 2020. “Our country is exposed to the risk of various problems and dangers now and in the future, and risks – both foreseeable and unforeseeable – are on the increase” (Xi 2022, p. 133). To mitigate these risks, China needed to “integrate the planning of security and development” [统筹发展和安全].
In April 2020 Xi Jinping laid out what a “secure” development pattern must look like. Chinese development can no longer take the “large-scale international cycle” as its foundation. Instead, the Party must construct a “large-scale domestic cycle” [国内大循环] to serve as the mainstay of future growth, with the “international cycle” [国际循环] serving as a supplement. As much as possible, planners should locate both the materials used as inputs for Chinese manufacturing and the consumers of China’s manufactured goods (the “two ends extending abroad” in the old slogan) within China’s own borders.
This development strategy has both macroeconomic and security rationales. Chinese observers note that from a macroeconomic standpoint, raising domestic consumption promises to right an economy that has long been described as “unbalanced.” As Chinese wages rise and the labor supply shrinks, China can no longer maintain a growth model premised on low-end manufacturing for the global market. Intentional investment in emerging technologies and key strategic industries is one route around the feared “middle income trap.” It is also a way to escape technological dependence on hostile foreign powers. Xi Jinping describes the drive for technological self-sufficiency as “vital to the survival and development of [the] nation” (Xi 2021, p. 204). By reshoring technological supply chains, as well as key economic inputs like food and energy, the new development pattern promises to secure China against sanction or blockade.
However, the new development pattern is less a bid for autarky than a plan for “hedged integration” with the global economy (Blanchette and Polk 2020). Chinese economists expect that rising Chinese consumer demand will fuel economic growth for exporters across the globe; if China successfully pushes forward the technological frontier, Chinese firms expect to export their new products to every corner of the earth. As one manual designed to teach cadres about the strategy concludes: “Constructing a new development pattern is... a forward-looking gambit for seizing the initiative of future growth.” The ultimate goal of self-reliance is not to cut China off from the world, but to make China more central to it. If realized, the new development pattern will “allow us to attract essential resources from across the globe, become powerful competitors in a fierce international competition, and become a powerful driving force in the allocation of the world’s natural resources” (Office of the Central National Security Commission 2023).
See also: ADVANCING TOWARDS THE CENTER OF THE WORLD STAGE; GREAT REJUVENATION OF THE CHINESE NATION; INITIAL STAGE OF SOCIALISM; NEW DEVELOPMENT CONCEPT; SOCIALISM WITH CHINESE CHARACTERISTICS; TOTAL NATIONAL SECURITY PARADIGM;
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