Trade Competitiveness of The Chinese Economy Following the Dual Circulation Strategy

Abstract

Purpose | This study aims to conduct a comprehensive analysis of China’s trade com petitiveness within the framework of the fundamental assumptions underpinning the Dual Circulation Strategy. Specifically, it endeavors to determine whether, and to what extent, the implementation of this strategy influences the trade competitiveness of the Chinese economy. Research method | The traditional and widely used Balassa’s Revealed Comparative Advantage analysis method was applied to assess the trade competitiveness of the Chinese economy from 2010 to 2021. Results | The Dual Circulation Strategy has the potential to not only sustain China’s existing comparative advantages in the international trade of industrial goods (particu larly in the category of medium-tech and, to some extent, high-tech goods) but also to enhance its trade competitiveness in high-tech goods. However, this process is unlikely to be either swift or straightforward, given the complex array of internal (domestic) and external (international) determinants at play. Originality / value / implications / recommendations | While the issue of China’s economic competitiveness is present in the contemporary economic literature, there is a notice able lack of papers dedicated to the impact of the Dual Circulation Strategy on China’s trade competitiveness. This paper aims to fill that research gap.