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This paper aims to investigate efficiency performance and the dynamic evolution of industrial circular economy (ICE). We first employ the cooperative game network data envelopment analysis (DEA) to measure the overall efficiency, subsystem efficiency, and factor efficiency of the ICE system. Then, an extended Malmquist index (EMI) method is proposed to identify the dynamic evolution of efficiency performance over time. Unlike the standard Malmquist index method, the proposed EMI method can finally decompose the EMI of the ICE system into the square