The concept, dual circulation economy, has two equally strong components: "internal circulation," the domestic economic activities, and "external circulation," China's economic links with the outside world.

Analysts say that the reason the Chinese economy is recovering faster than other countries is the large levels of consumption. To extend the economic recovery into 2021, China will need to increase people's income and boost efficient consumer spending. And the capital market could be helpful in achieving that.

On the one hand, analysts say effective and efficient capital market can help the consumers better manage their wealth in this special period.

"On the other hand, technology companies, when they run their research and development, they will probably need to raise funds in the capital market," said Jimmy Zhu, chief strategist at Fullerton Research.

Zhu added that the funds raised in the capital will be helpful to prevent corporate layoffs in China.

The capital market in China will be an addition to bank lending to provide enough cash and capital for Chinese companies suffering from the global economic hardship.

Total social financing is expected to expand in 2021. The reason, Zhu said, is that many companies under the economic downturn will use more market-based ways to get their loans in the current low-interest-rate environment. The capital market is also vital for funding the real economy.

"China is working on providing adequate financial support to companies, especially small companies, as most of the innovation comes from small companies. They can also provide a huge amount of employment for the society," said Chen Jiahe, chief investment officer at Novem Arcae Technologies.

Economists believe the country should welcome more foreign capital into its financial system, with the opening of China's stock and bond markets, to better serve both sectors of the dual economy.

"For the international side, China is working on becoming the world's financial center with large cities such as Shanghai and Hong Kong. When everyone is interested in Chinese assets and is willing to get listed in China, the dual circulation will be much better implemented," Chen told CGTN.

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