The Chinese government has proposed a new development model called Dual Circulation, which, we argue, is a response to the upsurge of trade protectionism in recent years, as well as an acceleration of China’s long-planned restructuring of its economy. Our input-output analysis reveals the inferior global distributional position of China and the dire consequences it faces from a counterfactual US-China trade decoupling. Specifically, China on average transferred out about 9 percent of its abstract labor during 2010–14, and it stands to lose 2.5 percentage points in its growth rate and over 10 million jobs if the United States and China completely transfer their bilateral trade to other partners.
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