Third, we need to accelerate the creation of a new development dynamic.

The Recommendations for Formulating the 14th Five-Year Plan for Economic and Social Development and Long-Range Objectives through the Year 2035 defined the creation of a new development dynamic that focuses on domestic flow and features positive interplay between domestic flow and international engagement as a major strategic task that concerned China's overall development interests. This task must be correctly understood and actively promoted according to the overall situation.

In recent years, we have witnessed a backlash against economic globalization and profound adjustments to the circulation patterns in the international economy. The Covid-19 pandemic exacerbated the trend of deglobalization, and many countries have now become more inward-looking. When the epidemic was prevalent, I visited several provinces around the country to gain an in-depth understanding of the situation on epidemic containment and investigate the problems that had emerged in reopening the economy. During my visit to Zhejiang Province, I found that global industrial and supply chains had been partially disrupted due to the pandemic. This had directly impacted flows in the domestic economy. Many companies were forced to suspend operations because they could not bring in the raw materials and personnel they needed or send their goods overseas. I realized just how much things had changed; the environments and conditions that had facilitated largescale imports and exports were no longer in place. Given these new circumstances, we needed to come up with new thinking to steer development. Accordingly, in April last year, I proposed that we create a new development dynamic that focused on domestic flow and featured positive interplay between domestic flow and international engagement. At the Fifth Plenary Session of the 19th CPC Central Committee in October 2020, we made comprehensive arrangements for this task. The establishment of the new development dynamic is a strategic and proactive step for taking the initiative in development, a major historic mission that must be fulfilled in the new development stage, and an important measure for applying the new development philosophy.

As a socialist country with a large population and a vast market, China is certain to encounter various pressures and stern challenges in the process of modernization, the likes of which no other country will have ever experienced. In 1936, Mao Zedong made a remark that still holds true for us even today. He said, "No matter how complicated, grave, and harsh the circumstances, what a military leader needs most of all is the ability to function independently in organizing and employing the forces under his command. He may often be forced into a passive position by the enemy, but the important thing is to regain the initiative quickly. Failure to do so spells defeat. The initiative is not something imaginary but is concrete and material." If we can, by dint of our own efforts, ensure unimpeded domestic flow to effectively shield ourselves from harm, we will have the vigor and vitality to not only survive but thrive amid volatile international situations, making it impossible for anyone to keep us down or to back us into a corner. We must speed up our efforts to create a new development dynamic, so that no matter the challenges or difficulties we encounter, whether anticipated or not, we will be better able to survive, compete, and maintain sustainable development. This way, we can ensure the course of national rejuvenation is never delayed or interrupted.

In practice, there are some misunderstandings that we need to guard against. First, some people tend to only speak about the first half, or the domestic flow element as the main factor, of the new development dynamic, and call for China to sharply reverse its opening to the outside world. Second, some others speak only of the latter half, or the positive interplay between domestic flow and international engagement, and still subscribe to the old development dynamic of large-scale imports and exports with two ends of the economic process – markets and resources – being located abroad, despite the changes to the international landscape. Third, acting in one's own way and only focusing on one's own sphere of interest is also a mistake. Some are neglecting the task of building a unified national market and promoting overall domestic flow, preferring instead to focus on their own local or regional market. Fourth, some have equated unimpeded economic flow with smooth logistics and are focused only on this basic level of circulation. Fifth, in resolving technological bottlenecks, some people want to do everything themselves, which result in needless replication, or they carry out extravagant projects that ultimately fail because they don't take account of reality and the industrial base. Sixth, in working to expand domestic demand and boost the domestic market, some people have begun blindly handing out loans for investment and over-stimulating consumption, or even reverting back to energy-intensive, high-emissions projects. Seventh, some are concentrating on demand-side management at the expense of supply-side structural reform, making it impossible to achieve a higher-level, dynamic equilibrium at which supply boosts demand. Eighth, some think that the new development dynamic is a matter for the economic and technology departments and has little to do with themselves. All of these understandings are incomplete or even erroneous; we must guard against them and rectify them should they arise.

The key to building a new development dynamic is to ensure unimpeded economic flow, just the same as a healthy person needs to keep the blood vessels circulating freely to maintain a good balance of vital energy and blood. Economic activity requires the integration of various production factors at the stages of production, allocation, distribution, and consumption in order to realize a circular flow. Under normal circumstances, smooth economic flow will lead to increased material products, greater social wealth, improved wellbeing among the people, and enhanced national strength, giving rise to an upward spiral of development. When obstructions and breakages emerge, economic flow is disrupted. From a macroeconomic perspective, the economic growth rate drops, unemployment rises, risks build up, and the balance of payments falls into disequilibrium. At the microeconomic level, problems such as overcapacity, declining enterprise returns, and falling personal incomes arise.