“China’s quick recovery was a product of its stringent lockdowns, massive [COVID-19] testing, population tracking, a large economy that can afford to be somewhat insulated, and fiscal stimulus via credit expansion,” analysts at Nomura said in a note on Monday.

But other economies might not find a blueprint for recovery in China’s example. Not only have many nations failed to implement effective lockdowns, but China’s growth largely has been fueled by exports to countries still struggling with COVID-19.

Selling overseas

Demand for personal protective equipment (PPE), such as masks, and electronics, such as laptops, has boomed in China as many of its Western trading partners endure pandemic-induced lockdowns.

Because China implemented a stringent lockdown at the outset of the COVID-19 epidemic, factories were able to reopen relatively early in the year and pivot to fulfilling such demand. In the first half of the year, exports of medical equipment surged 46%, while exports of laptops jumped 9%.

China’s central bank, the People’s Bank of China (PBOC), has also injected hundreds of billions into the economy through monetary easing, such as cutting the amount of cash banks are required to keep in reserve in April, which freed up capital for the economy.

But analysts at Oxford Economics expect the PBOC to ease these measures in the fourth quarter as the bank “turn[s] its attention towards the risks” incurred by raising national debt—which Beijing did by issuing billions in bonds this year.

Dual circulation

On Sunday, PBOC governor Yi Gang said China’s economy “remains resilient” and said monetary policy should focus on bolstering domestic demand. Improving domestic demand is one facet of President Xi Jinping’s nebulous “dual circulation” policy initiative, which state media has touted in recent weeks as a new formula for economic growth.

“Essentially, the [dual circulation policy] aims to build up domestic economic strength through rebalancing in the face of intensifying external risks while maintaining China’s deep engagement with the global supply chain,” says TS Lombard lead economist Bo Zhuang.

Beijing isn’t aiming for total self-sufficiency, Zhuang says, but it does want to increase domestic demand and better supply that demand at home, perhaps by producing items it currently imports, like advanced semiconductors. The rebalancing comes against the “backdrop of deglobalization” as well as China’s deteriorating relationship with the U.S.

Nomura analysts say Beijing’s focus on “internal circulation,” or the ramp-up of domestic demand that’s satisfied locally, was “increasingly evident” in the third quarter. Retail sales for September grew 3.3% over the year before, compared with just 0.5% growth in August.

Growing alone

Broadly, economists expect China’s recovery to continue at a moderate pace, with household consumption picking up in the fourth quarter and becoming a more important driver in the first half of next year. Oxford Economics predicts China’s GDP will grow 2% for the full year.

Such moderate uptick is a far cry from the 6% growth Beijing targeted before the pandemic began, but, according to the IMF, 2% would still make China the only major economy to see positive growth this year.