UPSC Prelims Practice Questions — The new logic of the Chinese economy

Q1. Under which of the following Five-Year Plans of the People's Republic of China was the 'Dual Circulation Strategy' first formally articulated as a national growth policy?

• A. 12th Five-Year Plan (2011–15)
• B. 13th Five-Year Plan (2016–20)
• C. 14th Five-Year Plan (2021–25)
• D. 15th Five-Year Plan (2026–30)

Q2. Consider the following statements regarding the structural transition of the Chinese economy as reflected in the IMF's 2025 Article IV Consultation and related assessments: 1. The 15th Five-Year Plan covers the period 2026–30 and identifies consumption-led growth as an overarching priority. 2. The IMF projects China's GDP growth at 5.0% for 2026. 3. The 'Dual Circulation Strategy' was first articulated under the 13th Five-Year Plan. 4. The World Bank's December 2025 China Economic Update flagged the property sector downturn as a persistent headwind. Which of the statements given above are NOT correct?

1. The 15th Five-Year Plan covers the period 2026–30 and identifies consumption-led growth as an overarching priority.
2. The IMF projects China's GDP growth at 5.0% for 2026.
3. The 'Dual Circulation Strategy' was first articulated under the 13th Five-Year Plan.
4. The World Bank's December 2025 China Economic Update flagged the property sector downturn as a persistent headwind.

• A. 1 and 4 only
• B. 2 and 3 only
• C. 1, 2 and 3
• D. 3 only

Q3. On the demand side, which single component contributed the largest share to the People's Republic of China's GDP growth in 2025?

• A. Gross capital formation
• B. Final consumption expenditure
• C. Net exports of goods and services
• D. Government fixed-asset investment in infrastructure

Q4. In the context of contemporary Chinese economic policy, the term 'Dual Circulation Strategy' is BEST described as:

• A. A monetary framework under which the People's Bank of China simultaneously targets credit aggregates and an interest-rate corridor.
• B. A growth policy under which domestic demand ('internal circulation') is treated as the primary engine of growth while international trade and investment ('external circulation') play a supportive role.
• C. A trade-in subsidy programme that channels household savings into purchases of consumer durables, automobiles and electric appliances.
• D. An exchange-rate regime combining a managed float for the current account with strict capital-account controls.

Q5. With reference to assessments and policy instruments concerning China's pivot to consumption-led growth in 2025–26, consider the following statements: 1. The trade-in programme covering automobiles and home electronics is among the key policy instruments being used to boost domestic consumption. 2. The IMF estimates that its recommended policy package could raise China's consumption-to-GDP ratio by about 4 percentage points over five years. 3. China's GDP crossed the 140-trillion-yuan mark for the first time in 2025. 4. The 15th Five-Year Plan (2026–30) was the first national plan to formally introduce the Dual Circulation Strategy. Which of the statements given above are correct?

1. The trade-in programme covering automobiles and home electronics is among the key policy instruments being used to boost domestic consumption.
2. The IMF estimates that its recommended policy package could raise China's consumption-to-GDP ratio by about 4 percentage points over five years.
3. China's GDP crossed the 140-trillion-yuan mark for the first time in 2025.
4. The 15th Five-Year Plan (2026–30) was the first national plan to formally introduce the Dual Circulation Strategy.

• A. 1, 2 and 3 only
• B. 2 and 3 only
• C. 1 and 4 only
• D. 2, 3 and 4