Standing at the historical juncture of the world’s major changes unseen in a century, looking forward to the “14th Five-Year Plan”, we will build a complete domestic demand system and gradually form a new development pattern with the domestic cycle as the main body and the domestic and international dual cycles reinforcing each other, becoming We plan the key contents of the next phase of China’s economy.
How to correctly understand the hot word “double cycle”? How to solve the problem with the domestic circulation as the main body?
1 What is “double loop” ?
“Double circulation” is a very important hot word recently.
Mainly refers to the gradual formation of a new development pattern with the domestic cycle as the main body and the domestic and international dual cycles reinforcing each other.
On July 30, 2020, the Political Bureau meeting of the Central Committee emphasized the policy idea of ”dual circulation”. The meeting pointed out that “the current economic situation is still complex and severe, with great uncertainty. Many of the problems we encounter are mid- to long-term and must be understood from the perspective of a protracted war. We must accelerate the formation of a domestic macrocycle as the main body and a domestic and international dual cycle.” A new development pattern that promotes each other and establish a medium- and long-term coordination mechanism for epidemic prevention and control and economic and social development.” This meeting further clarified that the “dual cycle” development pattern is not a short-term consideration, but “from the perspective of a protracted war. understanding”. This also means that “dual circulation” will become the overall guiding idea of medium- and long-term economic policies, and will especially have an important impact on the economic work deployment during the “14th Five-Year Plan” period.
Source: Financial Magazine
However, “double cycle” It is not that there is an inside without an outside, nor that there is an outside without an inside. Taking the domestic circulation as the main body means focusing on opening up all links of domestic production, distribution, circulation, and consumption, giving full play to China’s ultra-large-scale market advantages, and meeting domestic demand as the starting point and foothold of economic development.
The domestic and international dual cycles promote each other, emphasizing that the domestic economic cycle is the main one, and it is by no means “self-enclosed”. The purpose of this is to better connect the domestic market and the international market by tapping the potential of domestic demand, and use both international and domestic markets and resources to achieve stronger and sustainable development.
2 Why has “dual circulation” become a new proposition?
The proposal of the new development pattern of “dual circulation” is not only the inevitable result of changes in the external environment, but also the only way for the transformation of domestic development stages.
In the uncertain external environment, “we must give full play to the advantages of the domestic ultra-large-scale market and add impetus to China’s economic development by prospering the domestic economy and smoothing the domestic cycle.” “Cultivation of new advantages for China’s participation in international cooperation and competition under the new situation”, enhancing China’s resilience and initiative in the process of opening up, and thus forming a “new development pattern of dual cycles that promote each other.”
The sudden outbreak of the new coronavirus has caused a severe setback in the world economy, shrinking global demand markets, and an unprecedentedly complex international situation. According to the latest World Economic Outlook Report released by the International Monetary Fund, the global economy will shrink by 4.9% in 2020, of which developed economies will shrink by 8%, and emerging market and developing economies will shrink by 3%.
At present, my country’s economy is already very large and has become a major economy with obvious spillover effects on the world economy. Under such an external background, simply relying on participation in the international economic cycle is no longer enough to continue to support long-term sustainable economic development.
3 How to solve the problem with the domestic circulation as the main body?
With domestic circulation as the main body, as the world’s second largest economy, China can unleash huge potential.
China has the world’s most complete and largest industrial system, strong production capacity, and complete supporting capabilities. It has more than 100 million market entities and more than 170 million people who have received higher education or have The ultra-large-scale domestic demand market formed by talents with various professional skills and a population of 1.4 billion, including more than 400 million middle-income groups, is in the stage of rapid development of new industrialization, informatization, urbanization, and agricultural modernization, and has great investment demand potential. Huge… This is our national reality and our advantage.
Overall, in the first half of the year, our country gradually overcame various unfavorable factors, and the momentum of steady economic recovery continued to consolidate. The National Bureau of Statistics announced on July 16 that China’s economy grew by 3.2% year-on-year in the second quarter. The latest data from the General Administration of Customs of China showed that from April to July, textile and clothing exports achieved growth for four consecutive months. As the global epidemic gradually eases and the demand for anti-epidemic materials declines, the growth rate of textile exports in July slowed down compared with the previous period. The purchase demand for clothing in major markets has rebounded, and clothing exports have improved, with the decline significantly narrowing compared with the previous period. From January to May 2020, my country’s industrial textile industry exported a total of US$34.29 billion in various commodities, a year-on-year increase of 202.62%. Among the main export products, the export value of masks reached US$22.56 billion and the export value of non-woven protective clothing was US$2.06 billion, accounting for 65.78% and 6% of the industry’s total exports respectively.
The positive changes in these data,�, my country’s per capita clothing consumption in 2019 was 36.6 pieces, lower than the consumption level in the United Kingdom and the United States, and there is still room for growth in the future.
The competitive landscape of my country’s apparel industry is still relatively fragmented. my country’s No. 1 clothing brand company, Lingzhi Group, had a market share of only 1.5% in China in 2019, while GAP and Fast Retailing, the top clothing brand companies in the United States and Japan, had a market share of 1.5% in their respective countries. 4.3% and 15.2%. Compared with the market share of clothing brands in developed countries, the market share of major domestic clothing brands is expected to continue to increase.
Benefiting from the improvement of competitiveness and the rise of national trends, Chinese clothing brands have great potential in the future. The gap between domestic brands and foreign brands has narrowed, and overseas brands have withdrawn from the Chinese market. Domestic brands are improving their capabilities in terms of brand, product, design, channel, supply chain and retail management. At the same time, they have achieved rapid development by leveraging the rising trend of national trends. Some domestic brands have begun to compete for the original share of international brands, such as the rapidly growing MJSTYLE, UR, China Li Ning, Bosideng, Peacebird, etc.
Among the world’s top five economies, only the top 10 brands in my country’s clothing market do not produce more than 50% of their products domestically. The top 10 brands in my country’s clothing market in 2019 are Adidas, Nike, Anta, Uniqlo, Heilan House, Skechers, Li Ning, FILA, Balabala, and Xtep. Among them, there are a total of 5 completely domestic brands, accounting for 50%, namely Anta, Heilan Home, Li Ning, Balabala, and Xtep. Among the top 10 clothing brands in the United States, 8 are domestic brands; in Japan, there are also 8; in Germany, 6 (7 in Germanic terms). Domestic brands among the top 10 clothing brands in other countries cover multiple clothing sub-fields such as sports, leisure, fashion, and underwear. Although Chinese sports brands have become popular again in recent years, they are still in their infancy, and consumers in the mid-to-high-end market still prefer Choose Nike adidas. There is still a gap between local sports brands and international brands in concept creation and marketing; in addition, sports brands account for 7 of the top 10 brands, indicating that domestic casual fashion brands have development potential and have great potential in the future. </p
