CHINA’S economy achieved a gross domestic product (GDP) growth of 5.0 percent in 2024, aligning with government targets. This growth was driven by a series of stimulus measures, with the fourth quarter showing a 5.4-percent year-on-year increase, the fastest since mid-2023. Industrial production grew by 6.2 percent in December 2024, led by equipment and high-tech manufacturing sectors. Retail sales also rose by 3.7 percent, reflecting a gradual improvement in consumer activity despite cautious spending. The real estate sector showed signs of stabilization, with new home prices steadying for the first time since mid-2023. However, property investment declined by 10.6 percent, marking the largest annual drop on record. Consumer confidence remains fragile due to factors such as job insecurity and modest income growth, affecting domestic demand.
China also faces external challenges, including the potential for a “trade war 2.0” with the United States under the upcoming Trump presidency, which proposes a more or less around 25-percent tariff on Chinese goods. This scenario could significantly impact China’s export sector in 2025.
In response, policymakers plan to implement further stimulus measures and structural reforms to enhance productivity and reduce reliance on property and export-driven manufacturing sectors. These strategies aim to stabilize economic conditions amid evolving domestic and global uncertainties.
China’s development and global economy
In retrospect, China’s high-quality economic development in 2024, as highlighted in the report of China’s SCIO on Jan. 17, 2025, has created significant ripple effects on the global economy, particularly by strengthening trade and supply chains. Industrial production, which grew by 6.2 percent in December 2024, and the expansion of high-tech manufacturing have bolstered global supply chains, benefiting countries reliant on Chinese machinery, equipment and technology. The gradual stabilization of China’s real estate market also helps reduce systemic risks, fostering global financial stability.
While domestic consumption in China remains cautious, rising retail sales signal potential growth in demand for imported goods. This presents opportunities for foreign businesses in luxury items/goods, agriculture and electronics. China’s focus on high-tech manufacturing and green development aligns with global priorities, promoting international collaboration in green energy, electric vehicles (EVs) and artificial intelligence (AI) sectors.
China’s 5.0-percent GDP growth has played a stabilizing role in the global economy, offsetting slower growth in developed and emerging markets impacted by inflation or geopolitical tensions. Key policies like the Belt and Road Initiative (BRI) and Asean-China trade partnerships like the Regional Comprehensive Economic Partnership (RCEP) enhance infrastructure and trade networks, driving regional integration and shared prosperity. Countries collaborating with China in industrial and technological sectors gain access to investments and innovation spillovers, while China’s robust industrial and export capacities help mitigate global inflationary pressures.
Indeed, China’s high-quality economic development has a ripple effect, driving global trade, innovation and regional integration. However, sustaining these benefits requires addressing domestic demand constraints and navigating potential trade disputes, and geopolitical-related issues and concerns. International cooperation in technology, sustainability and infrastructure development will be vital for shared growth and mutual prosperity.
Economic prospects in 2025 and beyond
Moreover, regarding China’s economic prospects for 2025, there are reasons for cautious optimism and confidence. Despite challenges in 2024, China managed a steady 5.0-percent GDP growth, supported by targeted stimulus measures. This demonstrates China’s ability to adapt and maintain stability amid global uncertainties. High performance of high-tech manufacturing and industrial production position China for continued growth, especially in sectors aligned with technological advancement and sustainability.
Moreover, China’s government has pledged additional stimulus measures for 2025, focusing on structural reforms to reduce reliance on traditional sectors like real estate while fostering innovation and domestic consumption. These reforms are likely to strengthen long-term economic resilience.
As one of the world’s largest exporters, if not the largest, China’s emphasis on stabilizing supply chains and enhancing trade partnerships through initiatives like the BRI ensures continued relevance in the global market. Continued investment in regional partnerships (e.g., Asean-China trade) suggests strong regional economic leadership. While consumer confidence remains fragile, focusing on bolstering incomes and reducing job insecurity could unleash significant domestic consumption potential, driving local and global demand.
Undoubtedly, China will remain a major driver of global trade, providing a stable source of demand for commodities and high-tech products while continuing to be a key supplier of intermediate goods for global manufacturing. China’s massive development and investment in green technology, renewable energy and AI investments are expected to spill over to other economies, fostering global innovation and collaboration. Also, China’s leadership in clean energy (e.g., solar panels and EVs) will be critical for the global energy transition. Through initiatives like the BRI, China will continue contributing to infrastructure development in emerging economies, boosting connectivity, trade and development across the Global South countries of Asia, Africa, Latin America and beyond under the South-South Cooperation and Development framework. With its scale and influence, China’s stable growth counterbalances against potential slowdowns in developed economies. By maintaining growth near its 2025 target (around 5 percent), China can significantly contribute to global GDP expansion. As a major manufacturing hub, China’s stability ensures the smooth functioning of global supply chains, reducing disruptions and mitigating inflationary pressures in global markets.
However, there are challenges to watch; while the outlook is optimistic, certain risks could impact China’s growth and global contributions. These include potential trade tensions, especially with the US with Trump 2.0, fragile domestic consumer confidence and lingering structural challenges, such as reliance on property investment and aging demographics.
Conclusion
Indeed, China’s economic outlook for 2025 is poised for steady growth, with projections of a 4.8-percent to 5.5-percent GDP increase underpinned by strategic reforms, targeted policies and a focus on innovation. High-tech manufacturing, renewable energy and the digital economy are expected to drive expansion, supported by fiscal measures stabilizing key sectors. Consumer confidence is anticipated to rebound, fueled by job creation, wage growth and government incentives, boosting retail sales and revitalizing tourism and entertainment as mobility improves.
Exports will remain pivotal, led by high value-added goods like semiconductors, EVs and renewable energy products. Trade resilience will be bolstered by diversified agreements, including the BRI and RCEP, positioning China to navigate global uncertainties while reinforcing its role as a significant driver of international economic stability and growth.
Despite these strengths, however, China must address internal challenges such as structural reforms and navigate external uncertainties in global trade relations. Its focus on innovation, sustainability and domestic demand positions the country well for a balanced and resilient growth trajectory, ensuring its substantial contributions to global economic development.
More importantly, China faces significant challenges in navigating escalating geopolitical tensions, particularly under the prospect of a “Trump 2.0” presidency. These dynamics carry profound implications for shaping China’s economic, trade and strategic policies on a global scale.
Hence, China’s ability to balance its economic goals with the realities of an increasingly volatile geopolitical landscape and a potential trade war 2.0 with the US under Trump 2.0 and how it will mitigate the risks posed by renewed US confrontations in trade while strengthening its global influence will determine its resilience and global standing.
Source: The Manila Times
https://www.manilatimes.net/2025/01/18/opinion/columns/why-chinas-high-quality-growth-matters/2040620
