Recently, there has been a lot of discussion on the new development pattern in which the domestic big cycle is the main body and the domestic and international double cycles promote each other. The market is very concerned about this new formulation, but there are also many differences in understanding, such as the meaning of internal circulation and external circulation and how they interact. How to understand? Double circulation promotes each other? Logical connection? Peng Wensheng, chief economist and director of research department of CICC, expounded these problems in the light of the new challenges brought by the COVID-19 epidemic.

The epidemic situation in COVID-19 has brought new challenges to the transmission efficiency of traditional macro-policies. Compared with the risk of predictable and quantifiable losses, COVID-19 brings more uncertainty of unpredictable and quantifiable losses. There are uncertainties in the evolution of epidemic situation, economic impact and policy response, which leads to the increase of preventive savings and inhibits the current consumption and physical investment of the private sector. Conventional monetary policy (interest rate cuts and RRR cuts) and unconventional monetary policy (QE and forward-looking guidance) are difficult to eliminate the trap of excess savings and liquidity, which is easy to bring financial risks, and the multiplier effect of traditional fiscal policies such as infrastructure investment will also be weakened. Therefore, to expand domestic demand, we need to break the inertia thinking, and we can consider unconventional fiscal policies aimed at the epidemic situation, eliminate uncertainty as much as possible, and increase the motivation of consumption and investment.

Because the economic cycle has both qualitative and quantitative attributes, so? Taking the domestic big cycle as the main body? This means expanding domestic demand by promoting consumption, which complements a higher level of opening up. Taking the domestic big cycle as the main body? In the meantime, should I pay attention? Double circulation promotes each other? . At present, China has entered a new economic era dominated by digital economy. The COVID-19 epidemic has expanded the application scenarios of digital economy and promoted the development of digital economy represented by non-contact economy. The effect of online interaction may not be as good as that of face-to-face interaction, but the great isolation under the epidemic situation has led to a sharp increase in the cost of face-to-face interaction between people, making it more cost-effective to switch to online and non-contact economy during the epidemic. The epidemic has made the potential of digital technology obvious. With the development of technology, the cost of online and remote interaction between people is decreasing, which means that the scope, breadth and depth of the digital economy will continue to increase, and even after the epidemic, it may replace the contact economy. Therefore, focusing on the post-epidemic period, we need to pay attention to the impact of the development of digital economy in order to understand the mutual promotion of internal and external circulation from both qualitative and quantitative aspects.