Amid global challenges like trade tensions and geopolitical uncertainties, one economy continues to shine: China’s. But what keeps China’s economy so strong, even when others are struggling?
At the recent Summer Davos Forum in Tianjin, Chinese Premier Li Qiang highlighted that “Over the years, no matter how the international environment has changed, China’s economy has consistently maintained good momentum.”
So, what’s the secret? It’s a mix of smart government policies, a robust industrial base, and strong domestic demand.
A Manufacturing Powerhouse
China is often called the world’s factory, and for good reason. With extensive supply chains, cutting-edge technology hubs, and a huge domestic market, China’s industrial strength supports both exports and economic stability.
The manufacturing sector makes up about 27% of China’s total GDP and roughly 30% of global manufacturing—a stark contrast to other leading economies. For instance, manufacturing accounts for about 11% of the U.S. GDP, 18% for Germany, and around 19-20% for Japan.
Innovation and Green Growth
But China isn’t just sticking with traditional manufacturing. It’s rapidly advancing in high-tech and environmentally friendly industries. In April alone, the value added in the smart drone sector surged by 74.2%, and production of new energy vehicles jumped by 38.9%. This shows China’s commitment to innovation and sustainable growth.
Premier Li emphasized that China is willing to share its technologies with the world and deepen global market integration. By strengthening industrial collaboration with other countries, China aims to create a win-win situation.
Boosting Domestic Consumption
China’s industrial base doesn’t just support exports; it also fuels domestic consumption by creating jobs and boosting incomes. Aware of the risks of relying too much on exports, Chinese policymakers are steering the economy toward being more consumption-driven.
“China is striving to develop itself into a super-sized consumption powerhouse on the solid foundation of a manufacturing powerhouse,” Li said.
According to a Deloitte report, policies that support both supply and demand have boosted consumer confidence and retail growth, laying the groundwork for ongoing optimism.
Facing Challenges Head-On
Of course, China’s economy isn’t without challenges, like trade disputes and changes in foreign investment. However, strong economic fundamentals and flexible policies help buffer these risks.
China’s growth isn’t just beneficial for itself. Premier Li pledged that China is willing to do whatever it takes to address global economic difficulties. By fostering a business-friendly environment and keeping its doors open to international investment, China positions itself as a responsible global economic leader.
Looking Ahead
In a world full of uncertainties, China’s economy is not just surviving—it’s evolving and thriving. With its mix of manufacturing strength, innovation, and a focus on domestic consumption, China is set to continue its influential role on the global stage.
