WEBVTT X-TIMESTAMP-MAP=LOCAL:00:00:00.000,MPEGTS:0 00:00.450 --> 00:02.214 You may have missed the Fifth Plenum 00:02.220 --> 00:03.690 of the 19th Communist Party of 00:04.019 --> 00:05.669 China's central committee held 00:05.670 --> 00:07.059 recently. Who can blame you? 00:07.080 --> 00:08.159 It sounds a bit dry. 00:08.520 --> 00:10.259 What came from that was a radical 00:10.260 --> 00:12.029 new economic plan, which could have 00:12.030 --> 00:13.859 a huge effect not only in China's 00:13.860 --> 00:15.840 economy, but Australia's, too. 00:16.540 --> 00:18.179 It could also mean China will be 00:18.180 --> 00:19.979 able to brush off its increasingly 00:19.980 --> 00:21.780 acrimonious trade wars with the US 00:22.080 --> 00:24.089 and become a global leader in 00:24.090 --> 00:25.260 many vital industries. 00:25.950 --> 00:27.567 At the heart of the new five year 00:27.690 --> 00:29.760 plan are to inoffensive words, 00:30.000 --> 00:31.289 duel circulation. 00:31.980 --> 00:33.695 That may not mean much now, but the 00:33.740 --> 00:35.609 next few years the phrase may 00:35.610 --> 00:37.139 become as well known as Belt and 00:37.140 --> 00:39.029 Road, another major economic and 00:39.030 --> 00:40.590 diplomatic initiative from Beijing. 00:41.460 --> 00:42.929 Dual circulation means effectively 00:42.930 --> 00:44.309 splitting the Chinese economy into 00:44.310 --> 00:45.584 two parts one domestic and 00:46.320 --> 00:47.320 one international. 00:47.880 --> 00:49.589 The engine of Chinese growth will be 00:49.590 --> 00:51.030 the domestic circulation. 00:51.330 --> 00:53.149 The overriding aim is to become 00:53.160 --> 00:54.729 far more self-sufficient. 00:55.350 --> 00:57.119 The uncomfortable truth for Beijing 00:57.270 --> 00:58.379 is that while the world may be 00:58.380 --> 01:00.119 addicted to products, it makes from 01:00.120 --> 01:01.169 TVs to Tick-Tock. 01:01.350 --> 01:02.999 China is also dependent on 01:03.000 --> 01:05.449 commodities and overseas soybeans 01:05.450 --> 01:07.019 from the US, semiconductors from 01:07.020 --> 01:08.819 Taiwan and the US, steel and steak 01:08.820 --> 01:09.996 from Australia, and with 01:10.650 --> 01:12.089 relations with China and developed 01:12.090 --> 01:14.069 nations deteriorating, it's having 01:14.070 --> 01:15.389 trouble getting supplies of these 01:15.390 --> 01:16.629 vital components. 01:17.100 --> 01:18.599 Beijing believes if it can create 01:18.600 --> 01:20.579 more of these products, particularly 01:20.580 --> 01:22.319 advanced tech components at home, 01:22.530 --> 01:24.149 it will be less vulnerable to trade 01:24.150 --> 01:25.290 and diplomatic shocks. 01:26.040 --> 01:27.569 And that's a problem for Australia 01:27.570 --> 01:29.285 with China being our largest export 01:29.670 --> 01:31.079 partner. If China is more 01:31.080 --> 01:32.609 self-sufficient, you'll need less of 01:32.610 --> 01:33.610 our resources. 01:34.110 --> 01:35.159 The other aspect is the 01:35.160 --> 01:36.420 international circuit. 01:36.600 --> 01:37.769 This is the part of the economy 01:37.920 --> 01:38.999 which will engage with the rest of 01:39.000 --> 01:40.000 the world. 01:40.080 --> 01:41.459 The two circulation's may 01:41.460 --> 01:42.460 intertwine. 01:42.600 --> 01:43.589 You should still be able to buy 01:43.590 --> 01:45.305 Aussie wine and Italian handbags in 01:45.360 --> 01:46.259 Shanghai. 01:46.260 --> 01:47.669 But because they are separate, it 01:47.670 --> 01:48.869 means of international relations 01:48.870 --> 01:50.699 sour. Further, the domestic economy 01:50.700 --> 01:51.700 will be more resilient. 01:52.350 --> 01:53.771 Some China watchers said that 01:53.790 --> 01:55.739 Beijing also hopes that if nations 01:55.740 --> 01:57.390 are attracted to engage in China, 01:57.690 --> 01:58.859 pressure can be put on them to 01:58.860 --> 02:00.477 acquiesce to Beijing's bidding or 02:00.810 --> 02:02.909 risk losing valuable market access. 02:03.810 --> 02:05.525 There is still far to go on China's 02:05.610 --> 02:07.260 dual circulation strategy, 02:07.740 --> 02:09.119 but if it can pull it off, it may 02:09.120 --> 02:10.688 not only shield China from trade 02:10.919 --> 02:12.509 spats and countries blocking supply 02:12.510 --> 02:13.931 chains, it may also see China 02:14.550 --> 02:15.824 build advanced industries. 02:16.020 --> 02:17.309 And that could give the country the 02:17.310 --> 02:19.199 edge over the West for decades to 02:19.200 --> 02:19.530 come.