Technology and resilience define China’s economic outlook

China is closing 2025 with renewed confidence in its economic resilience and growing influence across technology, manufacturing and global markets. Breakthroughs in AI, electric vehicles, green energy and biopharmaceuticals have reshaped perceptions of the country, moving it beyond its long-standing image as the world’s factory towards a centre of innovation.

Despite trade tensions with the United States and ongoing challenges in property and consumer spending, China is expected to meet its 5% growth target for the year. Exports remained robust as firms diversified away from reliance on the US market, while a temporary trade truce eased pressure on global supply chains. Competition with Washington is increasingly shifting from tariffs to technology leadership in areas such as AI, advanced chips and biotechnology.

AI emerged as a defining theme, with Chinese companies pushing large language models into widespread industrial and consumer use. Government-backed initiatives are accelerating integration across manufacturing, transport and healthcare, while tighter rules aim to address risks such as deepfakes and data security.

At the same time, Chinese electric vehicle manufacturers expanded rapidly overseas, and domestic sales of new energy vehicles surpassed those of traditional cars for the first time.

Capital markets and global outreach also strengthened China’s position. Hong Kong reclaimed its status as the world’s largest IPO market, while Shanghai advanced its role as a financial and fintech hub. Looking to 2026, analysts expect China’s growth story to depend less on volume expansion and more on technological competitiveness, global integration and the ability to navigate a more fragmented geopolitical landscape.

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