China’s Economy Poised for Continued High-Quality Growth in 2025

On December 31, 2024, President Xi Jinping delivered his New Year’s address to the Chinese people, summarizing the nation’s progress in 2024 and setting the tone for 2025. When discussing the economic achievements of 2024, President Xi highlighted the proactive measures taken to navigate domestic and international challenges, emphasizing a series of policy combinations aimed at fostering high-quality development.

He also underscored the cultivation of new productive forces tailored to local conditions, with new industries, new business models, and new economic patterns thriving. With a focus on improving people’s livelihoods, President Xi’s said that “of all the jobs in front of us, the most important is to ensure a happy life for our people.”

These remarks illustrate that high-quality development, especially through fostering new productive forces, and prioritizing improvement of people’s livelihood, are the keys to understanding 2024 and central missions for 2025.

In 2024, despite a challenging global landscape marked by economic uncertainty, slowing and underwhelming recovery, and domestic economic transitions, China demonstrated remarkable resilience and vitality. The nation is projected to achieve its primary economic and social development targets for the year. The Gross Domestic Product (GDP) is expected to surpass 130 trillion yuan, with an estimated growth rate of around 5 percent, contributing nearly 30 percent to global economic growth.

Notably, China’s 2024 grain output hit a record high of 706.5 million tonnes, an increase of 1.6 percent from the previous year. The year 2024 also marks the first time that the country registered a grain harvest of over 700 million tonnes.

From January to November, the total retail sales of consumer goods reached 44.27 trillion yuan, an increase of 3.5 percent. Among them, online retail sales nationwide grew by 7.4 percent year on year, while service-related retail sales increased by 6.4 percent. In terms of investment, China’s non-financial outbound direct investment (ODI) reached $128.63 billion from January to November, an increase of 11.2 percent year on year. Of this, non-financial ODI in Belt and Road partner countries totaled $30.17 billion, a year-on-year growth of 5.1 percent.

At the same time, China newly established 52,379 foreign-invested enterprises nationwide, an increase of 8.9 percent year on year, showcasing the enormous appeal of the Chinese market and the confidence foreign investors have in China’s economy. Exports, as a key driver of economic growth, also performed well in 2024. In the first 11 months, the total value of China’s goods imports and exports reached 39.79 trillion yuan, up 4.9 percent year on year. Among this, exports accounted for 23.04 trillion yuan, growing by 6.7 percent, providing strong support for economic growth.

The highlights of China’s economic performance in 2024 extended far beyond traditional indicators of growth. A defining feature was the nation’s focus on fostering new productive forces. In the field of scientific and technological innovation, Chinese scientists achieved groundbreaking progress, tackling global challenges head-on. For example, the Chang’e-6 lunar mission successfully brought back the world’s first samples from the far side of the moon, providing invaluable data for lunar research.

In emerging industries such as artificial intelligence, 5G, and new energy, Chinese companies made significant breakthroughs, solidifying their competitive positions globally. Notably, over 10 million new energy vehicles were produced in China in 2024, underscoring the nation’s leadership in the green energy transition.

In addition to its economic and technological achievements, China has made notable strides in enhancing the well-being of its people. Policies were introduced to improve employment opportunities and increase incomes. Key initiatives included raising basic pensions, lowering mortgage interest rates, and expanding direct settlement for cross-regional medical treatments. Programs like “trade-in” schemes for household appliances also elevated living standards by encouraging sustainable consumption. These efforts reflect the government’s commitment to addressing people’s aspirations for a better life.

As 2025 marks the concluding year of the 14th Five-Year Plan, its economic significance should be fully acknowledged. The nation will continue to prioritize steady and high-quality growth while overcoming structural challenges. We must fully implement the guiding principles of the 20th National Congress of the Communist Party of China and the Second and Third Plenary Session of the 20th CPC Central Committee, adhere to the general principle of pursuing progress while ensuring stability, continue overcoming challenges and obstacles, and focus on rigorous implementation and execution.

Externally, China faces increasing uncertainties in the global trade environment. As the world’s largest exporter, China is particularly sensitive to rising protectionism. The Trump administration’s renewed threats of hefty tariffs, the EU’s plan to impose duties on Chinese new energy vehicles, and slowing overseas demand may place additional pressure on exports. Domestically, insufficient effective demand remains a pressing challenge, potentially slowing economic momentum.

However, China’s economic resilience and vast market potential provide a strong foundation for sustained growth. In 2025, the government is expected to adopt more proactive macroeconomic policies, employing “extraordinary counter-cyclical adjustments.” The Central Economic Work Conference, held from December 11 to 12, 2024, outlined nine key priorities for 2025, including expanding domestic demand, driving technological innovation, expanding opening-up to global markets, promoting new urbanization and rural revitalization, and advancing coordinated efforts in carbon reduction, pollution control, and green growth.

Furthermore, as the groundwork for the 15th Five-Year Plan begins, major strategic initiatives, reforms, and projects will be launched to sustain economic growth and prepare for the long-term development.

As we bid farewell to 2024, a year of resilience and progress, we embrace the opportunities and challenges of 2025. As President Xi urged in his New Year’s message, we must stay confident, grow through the trials of wind and rain, and emerge stronger from every challenge. With policies in place to support high-quality development and people’s well-being, China is poised to achieve continued growth and prosperity in the year ahead.

The author is the Founder and President of the Center for China and Globalization.

The article reflects the author’s opinions, and not necessarily the views of China Focus.