Analysis on Trade Gains from the Economic Dual Circulation in China

Abstract Accelerating the building of a new development pattern with domestic market as the mainstay and domestic and international markets reinforcing each other is a major decision made by the CPC Central Committee with Comrade Xi Jinping at the core in light of changes in the development stage, environment and conditions in China. Trade gains are an important indicator of the development trend of domestic and international circulations for a country. With the quantitative model of trade gains containing the multi-sectoral input-output relations, this paper estimates the trade gains from the economic dual circulation in China between 1987 and 2017, based on the kernel density estimation and Markov chain, and the main findings are as follows. (1) The trade gains from the domestic circulation in China showed a downward trend, while the trade gains from the international circulation presented a trend of first rising and then declining. But the former still outweighed the latter. (2) Compared with the international circulation, the continuity, spatial correlation effect and rising potential of the trade gains from China’s domestic circulation were greater. (3) There was no positive spatial correlation effect between the trade gains from the domestic and those from the international circulation. China should make overall plans for opening up both externally and internally, and unblock sticking points between the two circulations, so as to realize the positive interaction of the trade gains from the dual circulation, and accelerate the formation of a new development pattern with domestic market as the mainstay and domestic and international markets reinforcing each other.