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'Dual circulation' key to companies' innovation and industrial upgrade

By Zheng Yiran | China Daily | Updated: 2020-09-30 09:43
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Visitors check out Tongfang products during a high-tech exhibition in Beijing in October. [Photo by Song Fan/For China Daily]

China's new economic development pattern of "dual circulation" is an inevitable trend for the country, and also a must for the nation to realize sustainable economic growth, said a top official at Tongfang Co Ltd.

The dual circulation pattern is centered on the domestic economy (or "internal circulation") and aims to better integrate the domestic economy with the global economy (or "external circulation"), in order to reduce dependence on foreign trade and foster sustainable growth driven by rising domestic consumption.

Hu Jun, president of Tsinghua University-founded tech company Tongfang Co Ltd, said: "During the past decades, China experienced development from a regional economy to a global economy, and China's industries have become an inseparable part of the international market system. The country's dual circulation pattern is a necessity."

He said that internal circulation does not mean that China will develop its economy alone or in a vacuum. Instead, it involves technological innovation and upgrading the division of labor in China's economic structure.

"Internal circulation and external circulation complement and support each other, and should not be treated separately," he said.

Hu said the dual circulation pattern, which encourages technological innovation and industrial upgrading, is a major historical opportunity for the company. Specifically, the company plans to strengthen its layout in smart city technologies this year.

Currently, Tongfang is working on its smart security check system. The system, which is equipped with intelligent identification technology, can automatically detect hazardous goods and exterior objects when luggage passes through detection machines. There is no need to arrange a staff member to sit behind the monitor and keep an eye on the items inside luggage. In this way, human error is avoided and labor costs are saved.

In addition, the smart security check system can eliminate the manual body check process. When passengers walk past the detection door, the technology can detect if there are any hazardous goods being transported by the passenger and the exact location of the goods. The system thus allows passengers more privacy.

The company said the smart security check system is already being applied in some airports. In the future, the system will be widely applied.

Currently, Tongfang's smart city solution is applied in more than 100 cities nationwide. In the next step, it plans to strengthen its layout in central and western regions of the country so that residents, especially those from underdeveloped regions, are able to enjoy more convenience.

Its smart city solution involves various areas, including government administration, education, healthcare, market regulations, industrial zones, agriculture, tourism, culture, green construction, environmental protection and hydraulic engineering.

"In the new era, the government has stepped up efforts in support of technological innovation, which boosts our confidence in research and development," Hu said.

Sui Jigang, a researcher with the Institutes of Science and Development at the Chinese Academy of Sciences, said that technological innovation offers momentum for the new economic development pattern of dual circulation. It promotes the transformation of the factor structure, continuously improves the total factor productivity, promotes the upgrading of the industrial structure, coordinates the development of resources and the environment and finally helps to achieve high-quality development.

A factor structure refers to the correlational relationship between a number of variables that are said to measure a particular construct.

"Enterprises should change their original production mode. They should take advantage of technological innovation to increase productivity and reduce their dependence on external resources.

"Meanwhile, China's huge consumer group and market scale will offer multiple application scenarios for the development of new technologies, which promotes the constant improvement of new technologies," he said.

Zhu Caihua, deputy director of the foreign trade research institute at the Chinese Academy of International Trade and Economic Cooperation, said: "The key to the new economic development pattern of dual circulation is technological innovation. Only countries that lead in technological innovation can truly open up internal and external circulation."

Hu of Tongfang added, "To grasp the opportunities, in the next step, Tongfang will increase R&D investment and strive to make technological breakthroughs."

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