Dual circulation is set to reorient China’s economy as Beijing rethinks how it will engage with the world.

In early March, Premier Li Keqiang announced that China is targeting GDP growth of “about 5.5%” this year. That would be ambitious even without Russia’s war against Ukraine and the attendant increases in global energy and food prices. Back in January, for example, the International Monetary Fund forecast that the Chinese economy would grow by only 4.8% in 2022. And in 2019, the last full year before the COVID-19 pandemic, GDP increased by just under 6%.

Punishments of Russia cut both ways for the West and may even be self-defeating. The European and U.S. economies are suffering a backlash in rising energy prices, shrinking corporate profits and inflation-induced economic hardships.

Recently, the IMF downgraded global growth prospects, due to projected slowdowns in the U.S. and China. Negative prospects could be overcome with the right policies, such as trade cooperation. The current ones support stagflation.

The global pandemic no longer holds the world hostage as it did in 2020 - yet it’s effects and deadly consequences are still present along with the lingering threat of war and economic collapse.

The new Covid-19 variant, Omicron, is throwing a wrench into the recovery of an already strained global supply chain.

The 20th anniversary of China’s accession to the World Trade Organization on December 11 has once again highlighted long-standing debates about how well China has lived up to its WTO obligations, and whether any deviation from its commitments boosts or slows its economic growth. This discussion affects many countries’ views on whether the current global trading system should be built up or pulled down.

Containment or isolation of the Chinese economy makes little sense because it means all countries will lose out from the reversing of globalization.

The global pandemic’s impact on the economy was an issue that governments worldwide had to deal with, amid changing ways that people manage their money. Digital currency may be the next avenue for market stimulation in China, and beyond.

China’s friction with the West has led to retaliatory economic jabs in going both directions, yet for all the posturing and saber-rattling, trade between China and its Western partners is not easily replaced.