Editor's note: The article is part of  CGTN's series called "A New Vision for China's Economic Future", in which global economists and eminent academics share their personal views and insights on China's economic development. Shi Yulong is director of Research Center on Xi Jinping's Economic Thought. The article has been translated and edited for brevity and clarity. It reflects the author's opinions and not necessarily the views of CGTN.

Accelerating the construction of a new development paradigm featuring dual circulation with domestic circulation as the mainstay reinforced by international circulation, is a strategic decision made by the CPC Central Committee to achieve the second centenary goal and coordinate the country's development and security. 

Domestic circulation can enhance the internal driving force and reliability of the country's development while consolidating a strong economic foundation. It is the "stabilizer" of China's economy. Meanwhile, mutually reinforcing dual circulation can greatly expand the room for development and build up the capacity for global resource allocation, serving as the "booster" of China's economy. 

The construction of a new development paradigm conforms to the laws of economic development of big countries and periodic features of the country's development, and is necessary for big economies to realize modernization. By doing so, the economy gets a head start in consolidating and shaping new competitive and cooperative advantages, and staying ahead of future development trends. 

We should maintain a problem-oriented and systematic framework, expand domestic demand and deepen supply-side structural reforms, accelerate China's technological self-reliance, build a modern industrial system and advance the coordinated development of urban and rural areas to promote high-quality development of China's economy.

Expand domestic demand and deepen supply-side structural reforms

Big economies are generally led by domestic demand with smooth domestic circulation. Research (Huang et al., 2021) has shown that the larger the size of an economy, the smaller the proportion of GDP that depends on international circulation. Hence, there is "big internal circulation for big countries". The development gap between large economies such as the United States, Brazil, Japan and India is not small, but over 90 percent of their GDP is attributed to domestic circulation. 

Since the 18th National Congress of the Communist Party of China, China has been implementing the strategy of expanding domestic demand, especially consumer demand, to drive development. China's dependence on foreign trade has dropped from its peak of 67 percent in 2006 to about 32 percent of GDP in 2020, and the final consumption expenditure in China was close to 55 percent of GDP in 2021. 

On one hand, China has more than 1.4 billion people, including a middle-income group of over 400 million, and boasts a giant market with huge potential. On the other hand, with the increasing demand for high-quality products and services, the imbalance between supply and demand requires urgent attention. 

In the new era, it is necessary to strategically integrate supply-side structural reforms with expansion of domestic demand in adapting to changes in people's needs, removing obstacles that restrict economic circulation and building a competitive and orderly modern market system to achieve a superior equilibrium of demand guiding supply and supply creating demand.

Accelerate China's technological self-reliance

To ensure smooth domestic circulation and build up China's new advantages in international circulation, the key lies in strengthening China's technological self-reliance. New advantages in international competition are increasingly reflected by innovation ability. China is making leaps in scientific and technological strength toward systematic improvements. 

Scientific and technological innovation is the key to realizing economic modernization and the biggest contributor to high-quality development. In the new era, we should maintain innovation as the core of China's path to modernization, strengthen key competencies in science and technology, lay a solid foundation for core technologies, maintain deep integration of innovation chain, industrial chain and talent chain, and accelerate the formation of a top talent center and innovation hub.

Build a modern industrial system

To ensure the domestic market as the mainstay and enhance its driving force in the international circulation, there is an urgent need to build an independent, controllable, safe and efficient industrial chain and supply chain to bolster the resilience and competitiveness of the industrial chain. 

A modern industrial system is an important pillar of high-quality economic development. Industrial powers have always been supported by manufacturing industries, especially advanced manufacturing industries, of a certain scale and composition. 

Currently, China has the most complete industrial system in the world. However, it is also characterized by a weak industrial base and industrial chain, with a long way to go to raise the resilience and safety levels to that which meet the requirements of high-quality development. 

In the new era, we should continue to focus on the real economy. The chain should be strengthened by facilitating weak industries, extended with strong industries, upgraded with traditional industries, and built upon with emerging industries. Additionally, we should optimize the configuration of productivity, further integrate domestic and foreign industries to ultimately, build a modern industrial system that is independent, controllable, safe, reliable and competitive.

Promote the coordinated development of urban and rural areas

We should work to facilitate smooth economic circulation between urban and rural areas across regions, which is an important measure to improve the quality of domestic circulation across the board. It is also a key factor to ensure a sound relationship between domestic and international circulation. 

Urbanization has not only created a large pool of demand but also increased effective supply, which is a key driving force for promoting the coordinated development of urban-rural integration. 

China's urbanization is still underway, with 290 million rural laborers and more than 70 million floating population moving between cities and towns in China. There is still great potential in advancing agricultural and rural modernization, and new urbanization. 

Removing regional barriers and promoting the coordinated development of regional integration are important steps to smoothen the healthy movement of people. 

Europe has set an example. After World War II, the European Common Market expanded from coal and steel trade to many other fields of the real economy, implemented a series of policies such as the Rome Treaty, Brussels Treaty and Schengen Agreement, and devoted itself to building a common market in all areas to realize a smooth cross-border circulation of goods, factors, personnel, services, capital, currency and technology. 

EU member states have continuously expanded the open fields and promoted economic prosperity through integrated markets. In recent years, the proportion of trade volume within the EU has been maintained at about 60 percent of total EU trade volume. 

In the new era, we should promote comprehensive rural revitalization, make continued progress in urbanization with county towns as carriers, integrate regional coordinated development strategies, major regional strategies and main functional area strategies, speed up unification of national market and promote the rational flow and efficient agglomeration of various elements to smoothen domestic circulation.