What it is
China's dual circulation strategy, introduced in 2020, aims to rebalance its economy by emphasizing two interconnected "circulations": internal and external. The internal circulation focuses on strengthening domestic production, consumption, and innovation to drive growth. The external circulation involves maintaining trade and investment ties with the global economy but with a reduced dependency on foreign markets and technology, especially in critical sectors.
This policy has significant implications for global supply chains and international trade, often appearing in discussions about U.S.-China relations. News coverage analyzes how it encourages domestic brands and technologies, potentially reducing demand for foreign imports and impacting multinational corporations operating in China. Investors monitor the strategy's implementation for shifts in China's industrial policy, foreign direct investment rules, and the performance of companies reliant on either China's domestic market or its export sector.
Why it matters
Dual circulation affects global supply chains, market access for foreign companies in China, and the long-term growth trajectory of the Chinese economy.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice