China's economic security growth model and implications for the US-China security dilemma

Yeling Tan ()
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Yeling Tan: Peterson Institute for International Economics

No WP26-15, Working Paper Series from Peterson Institute for International Economics

Abstract: Traditional conceptions of export- or domestic investment-led growth no longer appropriately capture the dynamics shaping the Chinese economy. Rather, China has adopted a model in which national security logic increasingly underpins economic policy. This paper first outlines the main components of this growth model: a dual circulation strategy for balancing between external and domestic demand, a domestic industrial strategy premised on self-reliant innovation, and a legal and regulatory toolkit to respond to perceived acts of economic coercion from abroad. It then identifies potential implementation challenges and tensions emerging from such a growth strategy and discusses the ways these tensions might deepen the US-China security dilemma. The paper concludes with policy recommendations for mitigating these security dilemma risks, through unilateral and bilateral actions, some of which could be based on core principles in multilateral trade regimes.

Keywords: China; economic security; security dilemma; weaponized interdependence (search for similar items in EconPapers)
JEL-codes: F02 F50 F68 O53 (search for similar items in EconPapers)
Date: 2026-08
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