A look at China's "dual circulation" strategy. One way to interpret it: open economy to the outside world where that brings benefit; turn inward where that guards against vulnerability.

Might sound sensible for China. But it poses two basic problems (1/x) https://www.economist.com/china/2020/11/07/chinas-dual-circulation-strategy-means-relying-less-on-foreigners

First, the explicit (stated!) desire to make foreign firms dependent on China in order to gain international leverage isn't a winning diplomatic strategy. It's one big reason why Biden's policy towards China might resemble Trump's, albeit with different tactics/temperament. (2/x)

Second, there may well be a trade-off between making economy less vulnerable and making it bigger. S&P's base case for China for 2020s: avg annual growth of 4.6%. But if it overdoes the self-reliance? Closer to 3%. That adds up to a roughly $4trn "shortfall" in GDP by 2030. (3/3)