In mid-May, President Xi first launched the new meme “dual circulation” – presenting a fresh challenge of interpretation for China watchers. Most commentators have focused on the economic aspects of the meme, rather than its origins. But its origins may shed more light on why and how the Party makes policy.

Deeply rooted in traditional ways of thinking, circles embody a Chinese way of viewing the world very differently from the idea of linear progress embodied in Western thought. A Chinese person may be said to exist in a web of interdependent social relations of shifting and permeable boundaries, while a Western person lives in a world of explicit boundaries that emphasize the autonomy of the individual and provide the foundation for the pursuit of individual goals.

So, what does this cultural difference signify for the use of “dual circulation” as a meme to guide China through a major shift in trade policy and development policy?

Rather than representing an attempt to isolate its internal market from the world economy, “dual circulation” is China’s answer to pressure from the US to restructure global supply chains so as to decouple the US and Chinese economies. The goal of this policy is to preserve international trade benefits by preserving China-based supply chains as much as possible, while increasing domestic demand to create a new source of economic growth.

Whilst in China this gave rise to a vigorous debate between officials and academics on the risks and benefits of decoupling, it appears the US did not undertake any systematic analysis of the interdependence established in the realms of trade and technology or investment and capital flows. Nor was any serious assessment made of the consequences of losing the economic benefits of comparative advantage. The American approach has been characterized by an unsystematic set of policy instruments designed to punish China often at the expense of its own people, and a reliance on nationalist rhetoric to deflect attention from America’s declining economic preeminence, exacerbated by the unpredictable advent of a global pandemic.

At the diplomatic level, “dual circulation” also plays an important role. Centuries of traditional Chinese statecraft have placed China at the center of concentric circles of hierarchical relations, with China closest to the Heavens and therefore at the top of the hierarchy. Traditional diplomacy consisted of tribute offered by subordinate states to the Chinese emperor, who responded beneficently with gifts reflecting his exalted status. Modern East Asia retains the imprint of this history as a focus on circles – circles of trade, prosperity, and political influence – all of which bring stability and security within a hierarchical framework. In this world view, the Western Westphalian view of adjacent countries as equal independent sovereigns, each equally worthy of dignity and respect, is an alien concept.

A top party theorist, Sun Jilong, writes: “The foundation upon which the Chinese identify themselves with the rest of the world is rooted in the concentric-circle mentality. The big circle of China, when dealing with the external world, starts with itself as the center and divides the rest of the world into circles in terms of kinship and distance, and these circles usually evolve into hierarchies.” According to a recent Chinese think tank paper on diplomatic principles, the circle metaphor emphasizes “harmony”, promoting “accommodation, flexibility, diversity and mutuality”.

Against this background, the Party is promoting a vision of inclusivity: the newly articulated Xi Jinping thought advocates building a global community to safeguard world peace and promote common peaceful development based on mutual respect and win-win cooperation.

Such lofty sentiments are hard to dispute, but how will this vision play out in practice faced with mounting mistrust and antagonism? In the Western world, broadly accepted rules (based on legal convention and religious proscription) provide a framework of trust that easily enables acceptance of strangers. However, the Chinese world is based primarily on relationships, and less so rules, and thus one’s circle slowly expands to encompass new people based on bonds of trust formed through careful experience and testing.

Foreigners are often struck by the roundabout way that Chinese approach negotiations. Even where the logic of the deal is clear and accepted by both sides, the Chinese will often diverge from the linear path to closing and pursue tangents that make no sense to the Western side. With experience, the foreign side will realize that the Chinese party is still evaluating the trustworthiness of the foreign party and needs more time to build trust so that they can proceed with confidence.

Four years ago, a combative Trump Presidency burst on the scene with a radically new approach to US-China relations. Whilst Trump deserves credit for insisting on a more level playing field for investors and market participants, the ignorance, condescension, and inconsistency with which he prosecuted the objective could not have been better designed to destroy trust in Chinese eyes. China’s own reaction was to double down on its rhetoric and expensive soft power initiatives and was often perceived even by supporters as too aggressive and prescriptive.

In the next few years, one of the most critical missions for the incoming Biden administration will be rebuilding trust – which in an interdependent world must be done as a matter of survival if not growth – and will require a new effort to deepen our understanding of a civilization built on fundamentally different principles, a relational culture with a deeply rooted concentric circle mentality.

Since its unhappy encounters with the outside world in the 19^th and 20^th centuries, China has been struggling to preserve its essence as a hierarchical civilization at the center of concentric circles of relationships. This struggle continues in a geopolitical environment that is increasingly hostile to China’s emergence as a global power. Today it faces the challenge of fighting for respect among a world of equal sovereign nations bound by a web of rules that are based on fundamentally different principles. Understanding the philosophical underpinnings of China’s distinctive approach to international relations should be a prerequisite for determining how to manage relations in the years ahead.