Abstract: Against the complex backdrop of accelerating restructuring of the global industrial chains, rising geopolitical rivalry, and intense competition among emerging economies, the adjustment and choice of China's economic globalization strategy will profoundly affect the effectiveness and quality of the new development paradigm. In response to this major practical demand,this paper theoretically proposes the concept of domestic demand-led globalization. Its theoretical foundation lies in the idea that, in a large economy, domestic demand can exert a huge siphoning effect on global high-level production factors through proximity effect, scale effect and structural effect, which helps improve global resource allocation capacity. Thus, there is an inherent functional complementarity between domestic demand of a large economy and economic globalization. Compared with the exportoriented globalization that China has pursued in the past, domestic demand-led globalization displays distinct characteristics in terms of preconditions, objectives, core content, development paths and industrial carriers. Nevertheless, the two strategies form an evolutionary continuum. Accordingly, the shift to domestic demand-led globalization generally needs to be achieved in three sequential stages include "global value chains—domestic value chains—global innovation chains". However, as China's economy shifts toward a model of globalization driven by domestic demand, it still faces the global challenges of having both ends of its industrial chain located abroad, being locked into the low end of the value chain, and relying on imports for its innovation chain. To a large extent, these dilemmas stem from the structural imbalance of "strong supply, weak demand" in the domestic macroeconomy. The key to resolving this contradiction lies in vigorously expanding and upgrading the service sector.
