China’s resilient economy to generate more positive impact on global recovery

“The engine of global economic growth” and “the main contributor to global economic growth” are terms often mentioned by overseas media and observers when discussing the Chinese economy.

In the past decade, China’s contribution to global economic growth exceeded the Group of Seven (G7) developed economies. In 2023, facing the challenges of a slow post-pandemic recovery and a turbulent international environment, China contributed 32 percent of global economic growth, with its own GDP expanding by 5.2 percent from a year earlier.

For a long time, one of the important reasons why the Chinese economy has been able to withstand risks and overcome numerous difficulties, both internally and externally, is a deep understanding and grasp of economic laws, scientific thinking and exploration of ways to change development patterns, more efforts in exploring new development drivers, and a firm determination and action in economic structure reform.

First, China’s economy has been supported by exploring new growth drivers in line with new economic trends.

Since 2018, China has placed a strong emphasis on exploring the benefits of its vast domestic market. The country has actively worked to cultivate its comprehensive domestic demand, speeding up the smooth circulation of the entire supply chain. As a result, consumption has increasingly become the primary driver of economic growth, reaching a historic contribution level of 82.5 percent in 2023.

China’s consumption power should not be underestimated. The country has become the world’s second-largest consumer market, with a total retail sales of consumer goods reaching 47.15 trillion yuan ($6.54 trillion) in 2023, a yearon-year increase of 7.2 percent. China has been the world’s largest online retail market for 11 consecutive years.

With the support of digital technology, new consumer formats, models, and platforms are flourishing.

Second, China’s economic growth has strong positive effect on other economies, continuously contributing to global development.

According to the International Monetary Fund’s estimation, for every 1 percentage point increase in China’s GDP, it will drive a 0.3 percentage point increase in the economic growth of other countries.

China’s imports create stable market demand, especially for bulk commodities and equipment markets with long-term stable high demand. In 2023, China saw a significant increase in import volume for bulk commodities. This uptick in imports contributed to a positive feedback loop with the global trade upswing.

China’s exports help alleviate global inflationary pressures. While high inflation causes a decrease in actual growth in world economy, China has effectively managed to keep its inflation at a very low level, making great contribution in combating global inflation.

Third, China’s emphasis for technological innovation is accelerating the development of many homegrown technologies.

In 2023, China’s total R&D expenditure reached 3.33 trillion yuan, accounting for 2.64 percent of GDP. China puts forward the concept of “new quality productive forces,” which provides important theoretical guidance for promoting the development of emerging strategic industries.

China increasingly emphasizes the protection of private sector in its economy. In recent years, the contribution of the private sector to the national GDP has steadily and significantly increased, accounting for some 60 percent of the national economy in 2023.

China’s economy is also making strides toward green, circular, and low-carbon development. Since 2012, the decline of China’s energy consumption intensity has been leading globally. The installed capacity of hydropower, wind power, solar power, and biomass power generation all ranks the first in the world.