As the world’s second largest economy, China’s domestic consumption has a major influence on the global economy. The Chinese government has said that its focus is on boosting China's domestic economy and consumption. But how should it go about achieving it? Researcher Ding Ke says it depends on the kind of society China wants to build.
Researcher Ding Ke looks at the US’s Chip 4 alliance initiative and its implications for China’s semiconductor industry. With the US seemingly intent on containing China’s high-tech industries, it will take a lot of effort for China to keep this sector going and growing, especially if the Chip 4 alliance works out.
China’s 20th Party Congress signalled that the government is focused on dual circulation, in particular domestic circulation. However, that does not mean that China has the intention for implementing a closed-door policy. In fact, a healthy domestic circulation will boost China's ecosystem for innovation and growth and help China further open up.
Researcher Ding Ke believes that the Chinese government is making efforts in using innovation to drive further development of the country and avoid the middle-income trap. But this would prove difficult amid heightened China-US tensions and the trend of economic decoupling.