China stays firmly in place as driver of Global Growth

China has been one of the biggest beneficiaries of globalization. Through a combination of administrative and policy reforms, not least of which is the overarching concept of reform and opening-up, which continues to this day, as well as gradual integration with the global economy and trade network, China’s economy has grown over 9% a year on average, and the country has lifted almost 800 million people out of poverty.

However, while China’s domestic economy has doubtlessly benefited incredibly from its reintegration with the world economic system, it has also enabled increased overall prosperity on a global scale, from providing inexpensive consumer products to developed countries that gradually moved beyond manufacturing to service-based economies, to the developing countries of the so-called Global South by contributing to infrastructure development and increased trade.

China has been a major source of global growth for more than 40 years and has left an indelible mark on the world, not only economically, but also increasingly politically and culturally. It is more than likely that this will continue for the foreseeable future, but increased global tensions in geopolitics, changes in economic policy, and diversification of supply chains, as well as shifts in power from West to East and North to South, will influence how and in which areas China drives global growth.

Increasingly strained relations between China and the United States have exacerbated this situation as the world’s two largest economies and increasingly frequent political rivals vie for their own vision of a global future. China’s position has been and remains one of mutual benefit and engagement with all parties, remaining confident that its economy will remain strong and continue to contribute to global growth.

In this chapter, we will examine specific ways in which China is currently contributing to global growth and how it intends to continue making contributions to economic and trade development throughout the developed and developing world.

The first article in this chapter, titled “Unlike the United States, China Is Not Trying to Shut Out the Future,” draws a stark contrast between the acceptance and promotion by China of EVs, clean energy, AI, and other emerging technologies, while the United States seems to be turning away from them as a part of overall policy. The next article, “China’s Resilience and Commitment to Globalization,” focuses, from a policy-setting perspective, on how China’s latest Two Sessions, the simultaneous meetings of China’s legislative assemblies—the National People’s Congress and the National People’s Political Consultative Committee have maintained a consistent policy on globalization and economic development by comparing meetings in 2025 with those in 2023, both of which emphasized China’s focus ensuring that China remains a source of growth both for global companies doing business in the country as well as for global trade as a whole.

The third article, titled “Critics Are Missing the Big Picture on China’s Economic Transition” emphasizes how China’s economy is no longer a monolith of basic manufacturing and is currently leading the way in the transition to green infrastructure, digital connectivity, and world-class research that will have a considerable impact on future global development. In the same vein, the next article, titled “China’s Economy Poised for Continued High-Quality Growth in 2025,” reiterates the fact that China continues to be a source for global growth and cites the latest growth numbers and improvements in the daily lives of Chinese citizens that point to the country’s continued robust development. This trend has been true since the global economic recovery began following COVID-19, when China worked to present itself as a strong and reliable engine for growth.

China’s growth engine is in large part powered by its innovative and dynamic companies that remain enthusiastic about expanding internationally, whether in terms of trade or even direct investment in a wide range of global economies. The fifth article in this chapter, “Chinese Companies Can Spearhead a New Wave of Globalization,” focuses on how these companies will be integral to global economic development in “Globalization 3.0,” a new phase of more multilateral development that will be increasingly influenced by the Global South, of which China is the most prominent member.

Part of this is China’s strong tech sector, which is leading in multiple areas despite certain challenges due to protectionism and recent tariffs. The next article in this chapter, titled “Chinese Big Tech Firms Are on the Comeback Trail amid Economic Recovery and US Tensions,” expands on how Chinese tech companies like Baidu, Tencent, and even e-commerce platforms like Shein and Temu are overcoming multiple challenges to recover and expand abroad.

The seventh article in this chapter, titled “China Will Still Be a Major Growth Driver This Year,” shows how China focuses on maintaining overall growth and setting targets that are reliable, which will in turn continue to make China an attractive destination for foreign investment. Continuing this theme, the next article in this chapter highlights China’s vision of globalization in a wider sense. Titled “China Injects New Momentum into Multipolar Globalization,” it emphasizes the fact that China no longer views globalization as West-led concept and that it should be more inclusive both geographically and in terms of economic systems, noting that China’s mixed economic model, including its state-owned sector, has been at the core of its growth and provides an alternative to classic development theories. For much of its recent economic history, China’s development is inextricably intertwined with foreign investment and multinational cross-border, enterprises. The ninth article in this chapter, “China Is Providing a Strong Impetus for Attracting Foreign Investment,” once again stresses the emphasis that China places on creating a good environment for foreign investment by expanding the range of industries open to investment and driving programs specifically created for foreign investment.

Moving beyond China’s borders, the next article in this chapter focuses on “How China Is Helping Middle East Economies Pivot Away from Gulf Oil.” Long seen as relying too much on revenue from oil production and lacking in economic diversification, China is working with Middle Eastern countries to develop other industries, including infrastructure, high-tech, and green technologies. This not only helps them pivot away from an oil-based revenue source, but it also creates a wider range of opportunities for foreign investment and cooperation in the Middle East. However, while this article focuses on the Middle East, it is also representative of China’s efforts to support globalization around the world and to find solutions to the challenges that it faces in an uncertain future.

As mentioned previously, a key part of China’s success, which has contributed greatly to overall global growth, is its unique system of planning and its top-down model, which is efficient and effective. In leading the country, the Communist Party sets the tone of development, which provides guidance and direction for companies and administrators. It is also a key barometer for the world to gauge China’s development direction and policy directives. The next article in this chapter, “China’s CPC National Congress Embraces Development and Prosperity,” looks back at the achievements made in previous decades as well as the focus for the future, placing considerable emphasis on attracting international talent and driving innovation.

The final article in this chapter, “Why China Is Still a Solid Growth Engine and Safe Harbor for Multinationals amid Rising Tides of Anti-Globalization Sentiment,” highlights how China has remained committed to globalization and providing a stable, safe environment for multinationals currently in the country as well as those looking to increase or start investment here in the future.

Already a major manufacturing base for many of the world’s top tech companies, China continues to advance in the tech sector, with Chinese tech firms also becoming competitors on the global stage. In the wake of COVID-19, these were some of the first companies in China to show a strong comeback despite global challenges.

The green transition is likely to define the 21st century. Rather than resisting change, China is choosing to shape it through the propagation of technologies like EVs, solar and wind power, batteries and artificial intelligence.

In their op-ed in The New York Times, economists David Autor and Gordon Hanson—whose work first defined the “China Shock”—warn of a new wave of disruption, one they label “China Shock 2.0,” this time driven not by textiles or toys, but by electric vehicles (EVs), clean energy, artificial intelligence and biotechnology. The fear is that China is no longer merely catching up but is poised to overtake in sectors that once defined Western leadership.

Yet the term “China Shock 2.0” practically begs misinterpretation. Both authors clearly understand this: they speak against the reflexive protectionism that such a framing inspires and posit instead a forward-facing ideal of careful investment and subsidy.

It must be stressed that today’s changes are not a repeat of past disruptions. They are not about factory closures or lost jobs; they are about the construction of entirely new systems and industries. China is not here as a destabilizer, but as a builder.

Today’s shift, the China Shock 2.0, is better termed a future shock. And it is led by capital-intensive, hi-tech industries: EVs, solar power, wind turbines, batteries, smart grids, and artificial intelligence. These sectors are not driven by low wages but by scale, supply chain integration and a relentless push for innovation driven by a series of world-leading institutions that only seem to be strengthening because of a switch away from state-led subsidies to a greater emphasis on market discipline and research-driven innovation.

If the nineteenth century belonged to steam and the United Kingdom, and the twentieth century to silicon and the United States, then the twenty-first century will belong to those who lead the green transition. China is doing just that. The benefits are being felt worldwide. In 2023 alone, China installed more solar capacity than the entire rest of the world combined: 1.6 times as much. It had nearly double the rest of the world’s wind installations and is driving down clean energy costs worldwide.

The cost of solar panels has dropped from 24 US cents per watt of capacity in 2023 to just 11 US cents in 2024. China is not so much supporting the green transition as underwriting it.

Old industries are not being displaced so much as new ones are being created, and the global benefits are already visible. In developing countries, clean energy installations are reaching places where traditional grids never did. In parts of Africa, Southeast Asia, and Latin America, solar microgrids, battery systems, and electric mobility are leapfrogging legacy systems. These are first-time deployments that bring modern infrastructure to communities long left behind.

Yet it is this very capacity—this speed, efficiency, and reach—that raises hackles. The temptation is to respond with tariffs and protectionism. But the lesson from history, including Autor and Hanson’s own work, is that such strategies often fail.

In the 1970s and 1980s, the US auto industry faced competition from Japan. Tariffs and export restrictions offered temporary relief, but they could not mask deeper structural weaknesses. Today, foreign-owned automakers dominate most vehicle segments in the United States, while domestically owned companies have retreated into the tariff-protected light truck and SUV categories.

The case of Harley-Davidson is even starker: a 1983 tariff on imported heavyweight motorcycles and unwillingness to diversify led to a reliance on a narrow cohort of aging riders. Today, it faces a declining customer base and a dated product line.

Instead of resisting change, it’s best to choose to shape it. Following the 1985 Plaza Accord, Japan responded to US pressure by investing directly in American factories. Today, China is pursuing a similar path, not to circumvent and upend markets, but to participate in them. An “in the world, for the world” strategy locates production in partner countries, transferring know-how and aligning with local development goals, offering jobs to local workers and revenue to local governments.

For example, Changan Automobile’s “hai na bai chuan” (“the sea embraces all rivers”) strategy involves the construction of 20 factories overseas. Xpeng has launched localized EV production in Indonesia. BYD has begun assembling electric vehicles in Brazil at a factory once owned by Ford. Huawei and Chery have partnered to create a new electric vehicle brand with over 10 billion yuan (US$1.4 billion) in integrated research and development and production capacity.

China is not bypassing global rules or local partners. Instead, it is investing in shared growth and long-term collaboration.

Indeed, China is increasingly playing a stabilizing role in the global system as others retreat. As the United States withdraws from liberal internationalism and scales back support for multilateral institutions and public goods, China is filling critical gaps. From supporting regional forums such as the Community of Latin American and Caribbean States (CELAC) and contributing about 15.25% of the United Nations budget, to pledging US$500 million over five years to support the World Health Organization, China has consistently chosen to remain engaged.

China has implemented a zero-tariff regime for goods from 53 developing countries. Its visa-free entry policy now covers over 75 nations. China is pursuing membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which the United States withdrew from in 2017. China is also participating in global standard-setting, including AI governance frameworks, research collaboration, and other win-win projects. Far from pulling back, it is investing in a world that remains open, networked, and shared.

The real shock is not China’s ascent. It is how quickly the future is already being assembled. The only mistake now would be trying to shut it out, rather than choosing to be part of it.

Showcased in the recent Two Sessions—dual national congressional meetings—China is embracing multilateralism and openness, while working to steer the world toward cooperation.

As the world navigates an era of unprecedented transformation, marked by tariff pressures from the United States and a host of geopolitical and economic uncertainties, China stands at a pivotal juncture. The “Two Sessions” provide a timely platform to reflect on China’s economic trajectory and its unwavering commitment to a higher level of openness.

On March 5, 2025, Chinese Premier Li Qiang delivered a government work report, which targets an economic growth rate of around 5% in 2025.

Despite external challenges, China’s economy remains robust, resilient, and a vital engine of global growth. Leveraging its vast market advantages, technological prowess, and multilateral engagement, China continues to champion globalization and inclusive cooperation, offering stability and opportunity in a turbulent world.

China’s economic resilience is not a mere slogan—it is a reality underpinned by tangible strengths. In 2024, despite increasing external pressures, China’s economy showed tenacity, achieving its 5% growth target. The basic trend of the long-term sound development of the Chinese economy remains unchanged, according to the government work report. This stems from a domestic market of 1.4 billion people, a comprehensive industrial system, and a focus on innovation and infrastructure.

China’s high-speed rail network, spanning over 45,000 km and accounting for more than 70% of the world’s total, connects cities, boosts consumption, and supports regional trade. Its telecommunications infrastructure, with over 4.5 million 5G base stations, empowers industries and positions China as a global tech leader. This technological edge shone during the 2025 Spring Festival, when a humanoid robot performed a traditional Yangge dance on the gala stage, sparking global fascination with Chinese artificial intelligence.

On the trade front, China remains the largest partner of over 140 countries, contributing over 30% to global growth. In 2024, exports grew briskly, driven by demand for manufactured goods and green technologies. Notably, the “new trio” of exports—electric vehicles, lithium-ion batteries, and solar panels—saw their total value exceed 1 trillion RMB in 2023, with China holding a 70.4% global market share in new energy vehicles, 79.8% in lithium-ion batteries, and 85% in photovoltaics by 2024’s end, reinforcing its dominance in sustainable industries.

The tourism sector also rebounded, with inbound foreign visitors during the 2025 Spring Festival surging by 150% year-on-year. This recovery was bolstered by streamlined visa processes, including visa-free entry for dozens of Asian and European countries, and promotional campaigns targeting key markets like Southeast Asia and Europe.

China’s resilience also rests on its people. In 2024, over 13 million university graduates entered the workforce, fueling innovation in AI, renewable energy, and beyond. Combined with a manufacturing base spanning the entire value chain, China’s human and industrial capital is unmatched. This strength is evident in its 79.8% share of the global lithium-ion battery market and 70.4% share in new energy vehicles, driving the energy transition. Companies like BYD and CATL exemplify this, with their innovations powering electric vehicles and energy storage worldwide.

Rather than retreating, China is opening its door to the world wider. At the Two Sessions, the message was clear: “China remains steadfast in its commitment to opening up, regardless of changes in the external environment,” signaling both intent and action. The Chinese government reaffirmed commitments to market access, trade liberalization, and global cooperation, recognizing that China’s vast market offers mutual prosperity.

Visa exemptions for over 40 countries and tariff relief under trade agreements enhance exchanges, while the manufacturing sector’s full opening to foreign investment marks a historic shift. Regional synergy is accelerating, with the “dual circulation” dynamic between the mainland and Hong Kong-Macao naturally taking shape. For instance, cross-border projects like the Greater Bay Area have spurred investment in tech and logistics, amplifying regional economic vitality.

Private entrepreneurs are key to this strategy, driving innovation and exports. Government support, such as tax incentives, financing, and streamlining regulations, unleashes their potential, bolstering resilience. The internationalization of the RMB has also gained traction, positioning it as a global currency rivaling the dollar and amplifying China’s economic influence. This push is supported by growing use of RMB in Belt and Road transactions, reducing reliance on the dollar in trade settlements.

Amid rising protectionism, China advocates multilateralism and inclusive globalization. The Two Sessions highlight its role in the UN, WTO, and G20, pushing for equitable governance. The Belt and Road Initiative (BRI), connecting over 150 countries, emphasizes green development and digital connectivity. Core strategies like “new productive forces” and “dual circulation” emerged as buzzwords, leveraging innovation and domestic-global synergy to counter pressures. Facing US tariffs, China has deepened ties with ASEAN, the EU, and emerging markets. Environmental progress, with 87.2% of days in 2024 boasting good air quality, sets a green benchmark. The BRI’s focus on sustainability aligns with China’s photovoltaic leadership, in which it held an 85% global share by the end of 2024, enhancing its role in green globalization.

The Two Sessions chart a path of resilience, openness, and partnership. “New productive forces” and “dual circulation” inject momentum, while open policies and regional collaboration offer a blueprint for global partnership. Despite tariffs and tensions, China builds an inclusive economy with its market, infrastructure, and talent—not just for itself, but for the world. The RMB’s projected rise as a global currency further cements this vision. By embracing multilateralism and openness, China counters fragmentation and steers the world toward cooperation.

As the world’s second largest economy, China is an inextricable part of future global economic development. Its current transition toward green infrastructure, digital connectivity, and world-class research has provided China’s economy with a more dynamic source of growth.

As China transitions from the 14th to the 15th five-year plan, its economic trajectory is once again under scrutiny. External commentary often focuses on the short-term headwinds from a cooling property market and commensurately lowered growth, but these challenges obscure a more important story.

Beneath the surface, China has a vibrant backbone made strong by the synergistic effects of infrastructure, human capital, technology, and an unparalleled commitment to a green transition. These interlocking strengths form a resilient foundation for sustainable growth in the years ahead.

This synergy represents a wave of sustainable, quality development. China stands before a moment of great change as it cultivates a more well-rounded and diversified economy.

One aspect of that synergy is the pace at which ideas travel from the laboratory to the market and are scaled into global industries. China once lagged behind other countries in advanced science. Today, China is a global leader in scientific research. As of mid-2024, China produced 33.8% of the world’s highly cited scientific papers.

According to data from the Australian Strategic Policy Institute, China now leads in 57 out of 64 key technologies, such as artificial intelligence, high-performance computing, post-quantum cryptography, advanced materials, and renewable energy.

Meanwhile, the Chinese Academy of Sciences is the world’s most productive research institution, with breakthroughs that ripple outwards into commercial applications.

Perhaps the clearest example of this is in the technology underpinning the green transition. In 2023, China installed more solar capacity than the rest of the world combined and had twice the number of wind installations elsewhere. The cost of solar panels more than halved between 2023 and 2024, a change driven largely by the scale of Chinese manufacturing.

These gains have not been limited to China’s domestic energy mix; they are bringing affordable clean power throughout the world. In parts of Africa, for example, solar microgrids and battery storage systems are electrifying communities that legacy grids never reached. Parts of Southeast Asia and Latin America are also speeding up green transitions, thanks in part to increasingly affordable green technology from China.

Moreover, the infrastructure underpinning China’s transformation is world-class. The country now boasts an incredible 436 gigawatts of hydropower, 521 gigawatts of wind, and 887 gigawatts of solar as of 2024. China also has the world’s highest-altitude ultra-high-voltage power grid, enabling long-distance flows of clean energy.

China’s data backbone is increasingly unmatched, with 4.5 million 5G base stations built and connecting over a billion people. Back in 2023, China’s 5G base stations already represented over 60% of the world’s total, according to the Ministry of Industry and Information Technology.

The country has at least 110 “gigabit cities” where 5G network access rates have reached 80%. Meanwhile, under the “Eastern Data, Western Computing” project, China plans to construct eight computing hubs and 10 data center clusters in the country’s western regions to take advantage of the cheaper electricity sourced from renewables.

In addition, China’s strong domestic market is physically connected by more than 45,000 km of high-speed rail—more than the rest of the world combined—and at least 177,000 km of expressway. Its thriving civil aviation market is now the second largest in the world.

With seven of the world’s top 10 container ports, China is also increasingly connected to the world. Through its goods train network linked to Europe, 11 million containers have been transported over the past 13 years.

These synergies extend beyond China’s borders as Chinese companies increasingly shift production overseas, from electric vehicle plants being built in Brazil and Indonesia to renewable energy projects in Africa and West Asia. This approach not only creates jobs and transfers technology, but also ensures global supply chains remain stable and diversified.

Critics point to China’s weak property market and uneven post-COVID-19 recovery as signs of fragility. But the Chinese economy is far less reliant on any single driver of growth than it once was. While the property sector is still significant, it’s just one part of a broader system. High household savings represent another untapped source of domestic strength that could sustain consumption and investment for years to come.

The multiplier effects are striking. China’s physical and digital backbone enables research breakthroughs to quickly move from concept to mass production, reinforcing the feedback loop between science and industry.

For example, top-tier research in battery chemistry can directly boost China’s global leadership in electric vehicles. Advances in high-performance computing and AI can spill over into applications in logistics optimization and healthcare. Breakthroughs in new materials reshape manufacturing, aviation, and renewable energy systems.

The shift under way is clear. China is moving from an economy powered by real estate and exports to an economy driven by talent, innovation, and green growth. This transition is not without challenges. But from universities and laboratories to infrastructure and the cultivation of talent, China is well equipped to turn obstacles into opportunities.

The twenty-first century belongs to the pioneers of green technology. China’s infrastructure, research capabilities, and talent have placed it at the forefront of this transformation, which is built not only on new industries but also on a new vision of the future.

The road ahead will demand continued reform and adaptability. However, with its synergistic model of sustainable growth, China can weather the uncertainties of the global economy while shaping the next phase of growth at home and abroad.

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.

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 remarked 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 the 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%, contributing nearly 30% to global economic growth.

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

From January to November, the total retail sales of consumer goods reached 44.27 trillion yuan, an increase of 3.5%. Among them, online retail sales nationwide grew by 7.4% year on year, while service-related retail sales increased by 6.4%. 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% 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%.

At the same time, China newly established 52,379 foreign-invested enterprises nationwide, an increase of 8.9% 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% year on year. Among this, exports accounted for 23.04 trillion yuan, growing by 6.7%, 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.

In the chaos of reshoring and derisking, the unique brand of technological know-how and corporate wisdom of Chinese companies could potentially be in a prime position for considerable growth in the coming era of Globalization 3.0, making a positive contribution to the global economy.

At a recent conference in Singapore on Chinese companies going global, I spoke on deglobalization and the emerging contours of Globalization 3.0. Perhaps more than ever, we need to look ahead to new ideas and concepts to tackle whatever the future holds.

When China implemented its policy of reform and opening-up in 1978, its economy, shaped by autarkic experience and self-reliance, was still “in China for China.” In tapping world-changing market forces, the economy entered a period of “in China for the world” as the country became the world’s factory.

Increasingly complex value-adding industries lifted 800 million out of poverty and boosted the material wealth of our modern world. By 2020, China accounted for 35% of the world’s gross industrial output. Yet trade wars—which were begun by the United States during the first Trump administration have once again realigned global dynamics.

In today’s world, it’s no longer enough to do it better and more cheaply. Globalization is entering a new era and multipolarity is back. “De-risking” and instability have seen companies face a new period of uncertainty and transformation.

With the rise of trade barriers, tariffs, and geopolitical fragmentation, Globalization 3.0 will increasingly be digitally driven and regionally oriented. Chinese businesses urgently need to adjust their strategies and accelerate the pace at which they go global.

This means shifting from an export-driven growth model towards one characterized by a global presence, overseas investments, and cross-border industrial coordination. In other words, we need a strategy for the Chinese economy to be “in the world, for the world.” Chinese companies must go global, distributing their value chains and production systems across countries to serve international customers.

The simple truth is that overseas expansion not only enhances a company’s competitiveness and insulates it from rising protectionism and geopolitical tensions but also defuses some of the most keenly felt issues with globalization: the uneven distribution of its spoils among social groups.

It does this by rolling back the loss of job opportunities for skilled laborers and shifting productive capital and tax revenue back to the host countries.

A comprehensive global strategy not only mitigates the risks of trade barriers and conflicts over trade policy, it also presents new opportunities and models for doing business and increasing productivity. Geely, which employs 4,000 people at its Volvo plant in Belgium, jointly developed a vehicle architecture platform, which centralized production, spread fixed costs, and embraced new productive forces that have led to the production of high-quality products that reach consumers at lower prices.

This drive towards spreading the benefits of globalization doesn’t just mean investing in advanced economies either. China announced plans earlier this month to remove all tariffs on 53 African economies in a bid to better spread the benefits of globalization, trade, and development. This is not just about insulation against trade wars and discontent but a sustained and serious commitment to economic inclusion.

A China-based furniture manufacturer recently told me the latest round of US-China trade war tensions present an opportunity for his company to expand globally—he has already built a factory in the United States. As the world’s largest consumer market, the United States remains a vital arena for Chinese businesses. This new path can also allow Chinese companies to expand into emerging sectors and areas increasingly closed off to Chinese exports.

A decade ago, Fuyao Glass established an automotive glass factory in Ohio in the United States, which now employs more than 2000 workers. The opening ceremony was attended by hundreds, including the state governor and members of Congress. Enormously popular, it serves as a model of China-US business cooperation, exemplifying mutual benefit and win-win results.

Meanwhile, Chinese investment in renewable energy in the United States is also rapidly growing. Though the facility has since been sold, Longi Green Energy Technology was in a US$600 million joint venture to build a 5-gigawatt solar panel assembly factory in Ohio, while Trina Solar has already built a US$225 million factory in Texas. Battery maker Contemporary Amperex Technology Limited (CATL) and electronics manufacturer Luxshare have signaled a willingness to consider manufacturing in the United States. The China Railway Rolling Stock Corporation has plants in Springfield, Massachusetts, and Los Angeles, California.

Indeed, the head of Longi Green Energy once told me that its US joint venture was made possible through its close cooperation with many local upstream and downstream companies, which had created a stable community of shared interests. It was precisely this network of aligned interests that facilitated the successful landing of the project. It was not without its challenges, however: the long-standing hollowing-out of the American manufacturing sector demanded remediation in the form of vocational training programs.

As Chinese companies expand globally—and they must, lest they be left behind—they should seize the opportunities available for joint ventures and greenfield investments. BYD’s first wholly owned electric vehicle (EV) plant in Southeast Asia opened last year in Rayong, Thailand. Chinese manufacturers, especially in textiles, garments, electronics, and solar modules, have rapidly increased their investments in Vietnam, Thailand, Malaysia, Cambodia, and Myanmar. Southeast Asia now hosts about one-third of China’s overseas manufacturing foreign direct investment.

The global capabilities of Chinese enterprises offer great promise. Going global will help these companies diversify risk, expand sales channels, and gain access to global markets. At the same time, it will bring more jobs and economic benefits to host countries, creating mutual benefit and shared prosperity. We should work together to contribute more Chinese wisdom and strength to global peace and prosperity.

Optimistic earnings reports from tech companies like Alibaba, Baidu, and Tencent demonstrate an improved regulatory environment and a recovering Chinese economy, as well as global expansion and commitment to globalization.

China’s leading technology companies are making a comeback. Earnings reports from Alibaba, Baidu, and Tencent for the first quarter of 2023 showed optimism in an improved regulatory environment and a recovering economy after the lifting of COVID-19 pandemic restrictions in the world’s second-largest economy.

Alibaba, which owns the South China Morning Post, witnessed a 2% increase in revenue compared to the previous year. Despite a slow start to the year, the operator of two of China’s top e-commerce platforms observed positive domestic growth momentum in March. Baidu, which is working hard to position itself as an artificial intelligence pioneer, reported a 10% growth in earnings, which surpassed analysts’ expectations.

After a series of negative and flat quarters, Tencent posted an impressive 11% rise in revenue, also exceeding expectations. The company attributes its performance to a substantial rebound in payment volumes, advertising sales and gaming, based on the solid recovery of domestic consumption in China, which saw COVID-19 restrictions lifted in December.

This was also the first quarter since the central economic work conference held in December, where Beijing pledged its support for tech companies in leading development, creating jobs, and competing internationally. Gone are the targeted investigations and massive fines. Instead, officials now talk about “normalized regulations” and have signaled the end of the campaign to rectify major internet platforms.

China’s Big Tech firms are now championing the integration of digital and real economies. This goes beyond providing cloud services to corporate clients. For instance, Tencent is assisting local highway operators in deploying radar to help prevent traffic accidents, and Huawei is automating coal mines to significantly reduce the need for underground personnel. These ventures, although they are less publicized, are making China’s tech giants stand out from “pure” internet platforms such as Meta.

The fortunes of these companies remain closely tied to China’s economy. The primary business operations of most tech companies are concentrated in sectors such as consumer goods and advertising, which are inherently correlated with the overall economy. The revival this year of China’s economy, which the International Monetary Fund projects to grow by 5.2%, is the foundation of a rapid upturn in the revenue stream.

Furthermore, China’s Big Tech firms are increasingly looking beyond the country’s borders. Tencent’s gaming revenue from international markets experienced 25% year-on-year growth, continuing its upward trajectory since the third quarter of 2019. Overseas gaming revenue is now more than a third of the size of the company’s domestic gaming revenue.

According to Chinese media outlets citing anonymous sources, Tencent plans to design games that appeal to a global audience from the outset, instead of targeting specific markets. The company aims to expand its local teams to foster an integrated global game collaboration ecosystem.

Additionally, Chinese e-commerce platforms Shein and Temu are helping to alleviate the burden of inflation for consumers by reducing costs in clothing and fashion products. Meanwhile, TikTok continues to cater to more than 1 billion users worldwide. Alibaba Group CEO Daniel Yong Zhang has emphasized that globalization will be one of the group’s three pillars as it reorganizes.

At a time when geopolitical tensions between China and the United States are escalating, the achievements of Chinese tech companies in international markets showcase their entrepreneurial spirit and sustained commitment to globalization. This serves as an inspiration for many smaller start-ups.

Despite recent accusations that Chinese tech companies are obliged to hand over data to the central government, as seen in the scrutiny that TikTok CEO Chew Shou Zi, a Singaporean man of Han descent, faced during a hearing at the US House of Representatives in March, their accomplishments abroad continue to demonstrate the resilience of private business people.

As I have argued previously, China should incorporate its Global Initiative on Data Security into domestic laws and regulations, amending or officially interpreting laws accordingly. The initiative, which Beijing has promoted internationally, says that states “shall not obtain data located in other states through companies or individuals without other states’ permission.”

Putting noble political declarations into domestic laws is leading by example. This would aid China’s tech companies in expanding internationally, as the government pledged to do during the Central Economic Work Conference.

Finally, it is worth noting the dramatic decline in young people’s contribution to the success of Chinese tech companies. Tencent reported a 96% decrease in the total time those under 18 spent on domestic games compared to the same period in 2020, with the figure standing at a mere 0.4%. Similarly, the revenue generated from gaming by minors plummeted 90%, to 0.7% of gross receipts, compared to the same period in 2020.

In the United States, concerns have rightfully been raised about the impact of platforms like TikTok on young people’s mental health. China faces a similar problem, and Beijing took action to restrict children’s access to online gaming and to Douyin, the Chinese version of TikTok.

Tencent’s efforts to limit teenagers’ access to gaming demonstrate the effectiveness of such campaigns and the limited side effects on corporate earnings. The United States could consider implementing reasonable legislation to prevent excessive screen time for children on social media or games, taking inspiration from China’s approach.

A pro-business cabinet in China means a big welcome for foreign investment and a big push for diplomacy, connectivity and sustainability, which could be good for many international companies.

China’s “two sessions”—the annual meetings of the legislature and political advisory body—are always eagerly watched by investors around the world. In 2023, along with the tailwinds of China’s reopening, the meetings pointed to promising areas for international engagement and economic cooperation.

First, the newly appointed cabinet is familiar with the market economy and private sector, and well-placed to promote China’s integration with the global economy. In his first press conference as premier, Li Qiang sent positive signals with his pragmatic tone and pledged that China will continue to open up “no matter how the external situation may evolve.”

Li is seen as having pro-business credentials, having worked in the dynamic coastal regions of Zhejiang, Jiangsu and Shanghai, where he played a key role in supporting Tesla’s setting up of its Gigafactory, the first wholly foreign-owned car manufacturing plant in China.

Also, the retention of trusted technocrats in key roles—including the heads of the central bank and ministries of finance and commerce—provides reassurance of policy continuity, as new appointees settle in and the restructuring of the government and party organs is carried out.

These officials have been among China’s most important interlocutors at international meetings such as the Group of 20, better known as G20, and have overseen reforms in the country’s financial and banking sectors, which are among the most important areas of China’s market liberalization in recent years.

On the policy side, the government work report and other key documents presented at the two sessions also gave foreign investors some positive signs.

Fortifying the Chinese economy against risk and external uncertainty was a major theme of the meetings. But this drive for national security is not all bad news for multinational companies. The Chinese government still sees foreign investment as crucial to achieving its long-term strategic goals, particularly projects that can help secure its industrial chains and boost its innovation.

The government work report contained language that upgraded the importance of attracting foreign investment this year. There were also pledges to open markets wider, especially in services, and to improve the business environment, with an emphasis on legal and regulatory reforms to promote fair competition and better protect foreign investment.

Steps to ease cross-border travel are also a boost for international business. Just after the two sessions closed, China announced that it would resume issuing nearly all categories of visas for foreign visitors. Global business executives have started to return to China, and many more plan to visit for key events this month such as the China Development Forum and Boao Forum for Asia.

A commerce ministry spokesman reiterated at a recent press conference that investors from all over the world were welcome in China, and that the ministry will “play an active role in promoting key foreign-funded projects,” including “more convenient services for executives.”

The two sessions also signaled that China would seek to increase engagement and cooperation abroad this year.

The then foreign minister told the press that Beijing had hit the “acceleration button” for diplomacy as China opens and re-engages with the world. This diplomatic engagement will support more economic cooperation and create opportunities for foreign firms in a range of sectors and regions.

The double-digit budget increase of 12.2% for diplomacy, announced at the two sessions, reflects China’s ambitions to play a bigger role around the world, especially in the Global South, under its global initiatives for development and security.

China’s recent role in brokering a restoration of Iran-Saudi ties is a sign of things to come as the country increasingly translates its economic influence into political clout in regions such as the Middle East.

Meanwhile, the Belt and Road Initiative, now in its 10th year, is being recalibrated. The National Development and Reform Commission’s call to build “small but beautiful” projects along the belt and road indicates a shift towards a greater focus on quality, efficiency, and risk control, and towards projects in sustainability, digital technology, and health.

This should expand opportunities for cooperation in third markets with multinational corporations that have solutions and expertise in these areas, particularly with an uptick in activity expected with the 3rd Belt and Road Forum due to be held later this year.

Finally, sustainability continues to stand out as a promising area for long-term cooperation. The government work report confirmed that green development will remain a priority this year.

Multinational companies will be well-placed to establish themselves as leaders in this field by customizing their global green strategies to the China market, and linking global commitments to the government’s environmental goals through pilot projects and local partnerships related to areas such as supply chains, technological upgrading, and green consumption.

Although geopolitical frictions have increased risks for multinational companies, the two sessions reinforce the view that China will continue to present lucrative opportunities to foreign investors that can adapt and find niches aligned with the nation’s long-term development strategy. For many international companies, China will continue to be a major driver of growth this year—especially when prospects are uncertain elsewhere.

As globalization transitions away from a West-centered model, China, as a historical hub of globalization is working to ensure that the focus remains on shared prosperity by pushing for a new Bretton Woods moment.

A mainstream view thinks that globalization started with the Age of Exploration in the fifteenth century. However, American historian Prof. Valerie Hansen of Yale University said in a public dialogue that globalization originated as early as around 1000 AD, and China, ruled by the Song Dynasty then, was the hub of globalization.

At that time, the country had the most extensive foreign trade worldwide. Across the hemisphere, the Chinese exported unique and high-quality ceramics as well as various manufactured products to the Middle East, Africa, India, and other beyond. At the same time, they also obtained rare consumer goods such as spices and ivory from these regions. It can be said that ancient China was one of the major cradles of globalization.

The West-led process of globalization has taken place during the modern era. Aligned with economic globalization, Western values, academic concepts, and institutional patterns have been disseminated to the world and achieved dominance. The two industrial revolutions settled the leading edge in the development of Western technology. After the two World Wars, a West-dominated world order took shape.

The global landscape has evolved from the bipolarity of the Cold War to “one superpower, many great powers,” after it, and now to the acceleration of multipolarity worldwide. The rise of China is unstoppable, and the decentralized world politics has become a trend. Since the nineteenth century, the world has transformed from an acentric system to a central-marginal system. Western countries have become accustomed to being in the center with the non-West world on the periphery. However, as the strength of marginal countries grows, while the development speed of central countries slows relatively, the central-marginal system tends toward a shift to a more balanced and inclusive multipolar world order.

Undeniably, the establishment of the Bretton Woods system after World War II has brought decades of peace, stability, prosperity, and development to the world. However, with the financial crisis in 2008 as a turning point, the world economy has entered a downturn. The global power structure and world order have also weathered adjustment and reconstruction.

In the past 30 years or so, globalization has been marching fast. The universal prosperity and development concealed the injustice and imparity of the international system and world order, but the sluggish world economy has laid bare the problems.

At present, three years after the outbreak of the COVID-19 pandemic, the continuing war between Russia and Ukraine, the world economic recession, the accelerated impact of climate change along with the rapid development of new technologies, these have all propelled globalization onto a new stage. The world confronts more common challenges. Humanity needs a new Bretton Woods system.

Currently, the international community faces the issue of how to make globalization more inclusive, equal, mutually beneficial, cooperative, and united, so as to create a more resilient and flexible globalization. In this process, major countries in the East and West, North and South, across lines and groupings need to cooperate and manage cleavages. Here China can play a pivotal and constructive role.

China has opened up to the outside world and is expanding its circle of friends in the globalization process, which in fact contributes to hedging against the insecurity brought by the United States.

In recent years, the United States has been bent on consolidating and expanding its military security alliance, such as moves toward the eastward expansion of NATO, the Quadrilateral Security Dialogue and the Australia-United Kingdom-United States partnership. These moves have exacerbated geopolitical tensions and subtly fueled an arms race, which threatens to damage the peace and stabilicy.

Having no intention of engaging in a military contest with the United States, China has always regarded economic globalization as its top priority. In recent years, the country has promoted the Belt and Road Initiative and the Asian Infrastructure Investment Bank. China joined the Regional Comprehensive Economic Partnership, and applied for the membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and Digital Economy Partnership Agreement. Additionally, it continues to deepen economic and trade cooperation with Europe, Africa, Latin America, and Arab countries.

Moreover, China has developed a sui generis mixed economy. Its stability, certainty, and huge potential have laid a solid foundation for advancing a new wave of globalization. One of the most prominent features of the Chinese-style modernization, a mixed economy model stands out in the country’s globalization process.

State-owned enterprises, private enterprises, and multinational enterprises have formed a stable triangular support, which jointly created a unique path of Chinese-style modernization. Among them, state-owned enterprises act as the pillar of the national economy, which involves major industries and key fields in China. They play an important role in stabilizing the economy, innovating in science and technology, ensuring people’s livelihood and providing public goods.

Private enterprises have contributed over 50% of the tax revenue of the Chinese economy, over 60% of GDP, over 70% of technological innovation achievements, over 80% of urban labor employment, and over 90% of the number of enterprises.

Multinational enterprises, while less than 3% of the total enterprises in China, have created employment for about 40 million people, account for 2/5 of China’s foreign trade, 1/6 of tax revenue, and nearly 1/10 of urban employment.

They are an important part of the Chinese market, also an important participant, witness and contributor to China’s moderately prosperous society in all respects.

Against the backdrop of the global economic recession, strong resilience, huge potential, and sufficient vitality of the Chinese economy do not change. China’s continuous deepening of opening-up and development will continue to provide robust momentum for global economic recovery.

For a long period in the past, globalization has been dominated by Western countries. Notwithstanding, future globalization will be a multipolar affair jointly propelled by China, the United States, Europe and emerging economies.

In this regard, a new global multilateral coordination mechanism should be established on the basis of international organizations such as G20, G7, etc. A high-level dialogue mechanism between China, the United States, and Europe should be established to enhance coordination.

In this process, China, which has benefited from globalization, will continue to promote a more inclusive, equal, mutually beneficial, cooperative, and united globalization and global governance, and will continue to inject new momentum into the development of new globalization in the post-pandemic era.

China’s internal policies increasingly affect global economic trends and positive signals from China are giving confidence to foreign investors, thus contributing to global economic growth.

On January 17, 2023, Chinese Vice Premier Liu He delivered a speech at the World Economic Forum Annual Meeting in Davos in which he reaffirmed China’s commitment to all-round opening-up, international cooperation with other countries for world economic stability and development.

Since China began its policy of reform and opening-up in 1978, its use of foreign capital has grown steadily, with the size of foreign investment ranking first among developing countries for many years. According to official data, in the first 11 months of 2022, China’s actual use of foreign investment reached nearly 1.16 trillion Chinese yuan ($170.62 billion), up 9.9% year-on-year on a comparable basis, already higher than the whole year of 2021.

On the basis of “retaining the existing foreign investors and bringing in new foreign investors,” China has achieved remarkable results in improving the quality of foreign investment. The introduction of foreign investment has contributed to the development of key areas.

From January to November of 2022, the actual use of foreign capital in the high-tech manufacturing sector expanded by 58.8%, while that in the high-tech service sector rose by 23.5%, becoming the “main engine” for attracting foreign investment.

Secondly, in the first 11 months of 2022, the sources of foreign investment became more diversified. Actual investment from South Korea, Germany, the United Kingdom, and Japan increased by 122.1%, 52.6%, 33.1%, and 26.6%, respectively, year-on-year. Thirdly, the regional distribution of foreign investment became more balanced. Central and western China have become more attractive to foreign investors, with foreign capital inflows growing at 28.6% and 24.6%, respectively.

As the world economy continues to be buffeted by geopolitics, trade protectionism, and COVID-19, China has stood steadfast in ramping up both the quantity and quality of foreign investment, and achieved trend-bucking foreign investment growth in 2022. This would not have been possible without China's sustained efforts to provide easy market access for foreign investors and to improve the business environment for foreign-funded companies to thrive in China.

In terms of expanding market access for foreign investors, China has reduced the foreign investment negative list for its free trade zones (FTZ) multiple times, removing some restrictions on foreign investment. The new national list version and the FTZ version cut down the number of items restricted from foreign investors to just 31 and 27, respectively.

Major opening-up measures were rolled out in the fields of manufacturing, mining, agriculture, and finance to lure in more foreign-funded companies to operate in China. The total number of items contained in the 2022 Catalogue of Encouraged Industries for Foreign Investment has increased by nearly 20% from the 2020 version. The new catalogue expands the scope of encouraged industries for foreign investment and guides foreign capital into key areas such as manufacturing and production-oriented service industries, as well as key regions such as central, western, and northeast China.

In terms of optimizing the investment and business environment, China has scrapped regulations and guidelines that run counter to the Foreign Investment Law over the past six years and has promoted the establishment, revision, and abolition of more than 500 documents to provide a level playing field for foreign-funded companies.

At the end of 2022, the National People’s Congress passed an amendment to China’s Foreign Trade Law, which abolished the requirement for filing and registration procedures for foreign trade operators. Companies do not need to register as foreign trade operators and can go directly to the Customs for import and export procedures with their business licenses.

China is also aligning itself with higher standards. The Regional Comprehensive Economic Partnership (RCEP) entered into force at the beginning of 2022. China is seeking to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Digital Economy Partnership Agreement (DEPA). Moreover, China is engaged in the negotiation and upgrading of several free trade agreements.

In 2023, facing the global economic downturn and resurgence of protectionism, it is crucial for China to promote high-level opening-up to the outside world. China will implement various policy measures to stabilize foreign investment.

One is to promote major foreign investment projects. The first five batches of major foreign investment projects have been materializing at an accelerating speed. The government has combed through the foreign investment projects in the pipeline across China. A new batch of major foreign investment projects with driving effects on the broader economy will be launched in due course.

The second is to step up service provision to foreign investors. Promotional events for international industrial and investment cooperation will be organized to build a platform for multinationals to invest in China and for local governments to attract investment.

The third is to keep optimizing the business environment for foreign investors. The Foreign Investment Law will be implemented to ensure that all policies apply equally to both domestic and foreign-funded companies and that the latter can enjoy national treatment in practice. China will remove restrictions outside the negative list of foreign investment access, strengthen the protection of intellectual property rights, and build a market-oriented and law-based business environment open to global players.

China has prepared for foreign companies to come to China and has upgraded its business environment. Likewise, foreign-funded companies have remained bullish on China’s economic development, and are willing to take root in the Chinese market and contribute to the growth of the Chinese and the global economy.

According to reports from various chambers of commerce in China, over 70% of German companies, over 60% of American companies, and most British companies plan to increase their investment in China, and many well-known multinationals are increasing their presence in the around low-carbon sectors.

As stated by the China Belt and Road Initiative Trade and Investment Report 2022, from 2013 to 2021, 32,000 companies were invested and established in China by Belt and Road countries, with a cumulative direct investment of $71.15 billion. In 2021, the actual investment in China by countries along the Belt and Road was $11.25 billion, an increase of 36% year-on-year.

With China’s economy involved in the globalization process and the continued deepening of reform and opening-up policies, China has integrated into the global value chain, industrial chain, and supply chain. China’s global-oriented system was and continues to be jointly built by both domestic and foreign-funded companies.

China thus upholds the open markets and embraces mutually beneficial cooperation. Investors from all over the world can share in the opportunities of China’s development and boost the economic growth of not only the Chinese economy but also world economy.

From cars to telecoms, China’s work with Middle Eastern countries to diversify their economies does not carry the historical baggage that America and Europe have.

President Xi Jinping wrapped up his trip to Saudi Arabia on Saturday, having met several leaders from the region as he took part in the first China-Arab States Summit and the China-Gulf Cooperation Council summit.

As well as marking a continuation of China’s diplomatic re-engagement with the world after a flurry of meetings around the G20 last month, Xi’s visit underscored how ties between China and the Gulf Cooperation Council (GCC) are deepening and diversifying as both sides seek to secure their economic futures. China and Saudi Arabia vowed to upgrade their partnership and announced a raft of deals covering sectors such as energy, information technology, cloud services, logistics, and construction.

Of course, fossil fuels remain central to this rapidly growing relationship. China is the world’s largest importer of oil, and Saudi Arabia is the world’s largest exporter. In October, the kingdom produced 10.9 million barrels of crude oil per day, with the United Arab Emirates and Kuwait adding another 3.5 and 2.8 million barrels, respectively.

But finite supplies, mounting climate change concerns, and the shift to cleaner fuels has cast a shadow over long-term oil revenues, even if the war in Ukraine and the resulting energy crisis has shifted power back to the petrostates for now. Yet in the longer term, Gulf states are undertaking an economic pivot away from relying on oil exports.

The first component of this pivot is a turn towards fast-growing Asian economies. At current growth rates, trade between the GCC and Emerging Asia—a group that includes China, India, and most members of the Association of Southeast Asian Nations (ASEAN), is set to reach around US$578 billion by 2030, surpassing trade with advanced economies, according to projections by Asia House.

China plays an outsize role in the Gulf’s reorientation. Its trade with the GCC has doubled since 2010 and last year marked a milestone: GCC’s trade with China exceeded the council’s trade with the United States and eurozone, for the first time. Meanwhile, China’s trade with Saudi Arabia eurozone hit US$81.7 billion, surpassing Riyadh’s combined trade with the United States, eurozone, and the United Kingdom.

The second aspect of the GCC’s economic pivot is to diversify away from hydrocarbons into emerging sectors, using bumper revenues from high oil prices to support investment in infrastructure and hi-tech sectors, as reflected in plans like Saudi Arabia’s 2030 Vision and Kuwait’s 2035 Vision.

China’s strengths and approach to development dovetail nicely with these economic diversification programs. While the Gulf region is affluent, it lags in research and technological development. Chinese companies, with strengths in information, communications technology, innovation and infrastructure, are ideal partners for this push and are already making major inroads in the region.

Clean tech is a hotspot for cooperation as Gulf states prepare for life after oil. During Xi’s visit, Chinese and Saudi companies signed investment pacts for green hydrogen and solar energy. China’s Enovate Motors agreed to build an electric vehicle factory to produce 100,000 cars a year. Earlier this year, China’s NWTN announced that it would build an electric vehicle assembly facility in Abu Dhabi.

Telecoms and IT are also focal points for joint development. Huawei Technologies Co. has just struck an agreement with the Saudi communication minister to establish 10-gigabits-per-second mobile internet and a cloud computing facility in the kingdom. Since 2019, Huawei has signed 5G contracts with most GCC telecom firms.

In February, Huawei and the Saudi Digital Academy signed a deal to develop local tech talent, including several joint projects that will see around 8,000 Saudis trained under Huawei-accredited programs on IT and communications.

Huawei’s growing presence in the region highlights another factor supporting the development of China-GCC economic ties, geopolitics, and in particular the shared interest in building partnerships on the world stage outside Washington’s orbit. While Huawei has increasingly found itself shut out of Western markets as tensions with the United States and its allies increase, the Chinese telecom giant has found the Middle East more welcoming territory.

Unlike other major powers, China has stayed out of regional spats and continues to maintain strong ties with all countries in the Gulf and the broader Middle East. It is one of the few countries to enjoy comprehensive strategic partnerships with both the major regional rivals, Riyadh and Tehran.

Beijing’s favorable position stands in contrast to the United States, which carries heavy historical baggage from its interventions in the region, and its long-term stand-off with Iran, even its relations with Saudi Arabia are at a nadir.

Xi’s visit to Saudi Arabia has added extra impetus to China’s deepening ties with the kingdom. Leaders of the two countries will meet every two years under the new strategic partnership agreement.

Eyes now turn to the next milestone in this unfolding story. One could be an expansion of the Shanghai Cooperation Organization (SCO) into the Middle East. Saudi Arabia, already an SCO dialogue intending partner, is interested in upgrading to observer status. Last month, Iran passed a bill intending to join the group.

Another item to watch is the negotiations on the China-GCC free trade agreement, reportedly in the final and critical stage. The relationship between China and the Gulf will be one to watch as both sides seek to diversify their economies and external relations in an increasingly uncertain world.

Setting the tone for China’s future development path, the CPC continues to emphasize shared prosperity for all, developing global trade, attracting global talent, and improving China’s image on the world stage.

The 20th CPC National Congress, which ended on October 22, 2022, helped to stimulate and unify the minds and hearts. China seem headed down the right path and sent positive and open messages to the world.

During the past decade, the country had achieved its goal of realizing a “moderately prosperous society,” which was defined in quantitative terms as a doubling of GDP and per capita income of urban and rural residents by 2020 as compared to 2010. By 2019, China had reached an annual GDP of 99 trillion yuan ($14.4 trillion)—already more than double the 2010 figure of 41.2 trillion ($6.37 trillion)—with a per capita GDP of $10,276.

However, the nation’s economic development, though a bright spot, was not the sole focus of building a moderately prosperous society. Major breakthroughs were also made in other areas. There was a real improvement in the living standards of Chinese people, as reflected by the steady rise of various indicators. China’s rating on the Human Development Index (HDI) has increased from 0.49 in 1990 to around 0.76 in 2019, while life expectancy is also well above the global average, reaching 77.3 by 2019.

Despite the progress in the areas mentioned above, the CPC continues to be concerned with ensuring that development is balanced. Over China’s 40 years of reform and opening-up, it has lifted more than 800 million people out of poverty, accounting for more than 75% of global poverty reduction during this time.

In the past three decades, global poverty alleviation has lagged far behind the pace of globalization, and rising inequality has been the main cause of the recent wave of anti-globalization. This is why China’s achievements in poverty alleviation are of global significance and have the potential to contribute to the continuation of globalization and further steps toward global poverty alleviation.

China has leveraged its system and policy advantages on the way to building a moderately prosperous society. The government has taken advantage of its strengths in infrastructure, industrial development, education, healthcare, and environmental protection to foster development.

China invested heavily in education, increasing the higher education gross enrollment rate from 30% in 2012 to 57.8% in 2021. As of 2021, China’s nationwide basic medical insurance program now covers more than 1.3 billion people, and its basic pension insurance scheme covers nearly 1 billion people. China also guarantees compulsory education for school-age children and teenagers in accordance with the law.

Nonetheless, when evaluating the reasons behind these remarkable achievements, we cannot ignore the benefits that globalization and opening-up have brought to China’s economic development. Poverty has been reduced because of international trade. “Trade is better than aid,” as former UN Secretary-General Kofi Annan said.

Over the past four decades, multinational companies (MNCs) have invested in China, accounting for about half of the country’s import and export trade, almost 20% of tax revenue, and one-tenth of urban employment. They have not only fostered economic development but also provided an enormous amount of employment opportunities in China.

Moreover, since China joined the WTO in 2001, China’s GDP has expanded more than tenfold. There are nearly 300 million rural migrant workers in China, and the income of migrant workers at MNCs, and their remittances sent home have become an important part of China's economic growth. Continued opening-up has also advanced China’s technological innovation. In the 2010s, the digital economy and e-commerce connected China with the world and drove it into an era of mobile payment.

Over the next five to ten years, high-quality development is crucial for developing a model of modernization that benefits all of society. As mentioned in the work report delivered by President Xi to the 20th CPC National Congress, the market has played a decisive role in economic development, but science, technology, and talent are also important resources for high-quality development and will continue to provide China with considerable momentum. All this implies that China will continue to introduce more innovative policies to attract global talent.

Talent innovation too has been a part of China’s rapid development. China has gradually become a top choice for global talent and entrepreneurship. From 1978 to 2019, the total number of Chinese students studying abroad reached over 6.5 million, and 86.28%, or some 4.2 million, have chosen to return to China after their studies.

According to the Global Innovation Index Ranking 2022, China’s ranking has risen rapidly to the 11th from 29th in 2015. China also ranked first in the world in terms of the total number of R&D personnel and the number of international patent applications with more than 69,000 submissions.

The global need for talent will become even stronger in the post-pandemic era, with countries scrambling to introduce new policies to attract talent. In order to ensure China is no longer limited to simple core technologies, it must make greater efforts to attract top international talent.

Today, China has strengths in attracting global talent in the fields of artificial intelligence, quantum technologies, and genetic engineering, and China must become more attractive to remain competitive.

China has implemented many innovative policies to attract international talent in recent years, including the creation of an independent National Immigration Administration and adjusting its Green Card policy. However, we need to further improve supporting policies and create a more open, inclusive, convenient and livable social environment.

China can also provide greater policy incentives to attract the best international talent. The country has been providing a more open and equitable environment for international talent to work and start businesses, including easier visa application procedures, more accessible residency services, broader green card treatment, and an improved international living experience. The experience of Guangdong, as well as the Hong the Kong and Macao Special Administrative Regions (SARs) in reforming mechanisms for attracting talent can be replicated and brought to other cities.

China has made remarkable progress in the first hundred years since the CPC was established. Looking into the future, to achieve its second centenary goal—which is to build a modern socialist country by 2049, the Party will face a set of new challenges that need to be tackled, such as the middle-income trap, an aging population, and achieving its carbon emissions targets. Therefore, further reform and opening-up are necessary and vital to the country’s future while tackling these new difficulties and striving for its second centenary goal.

Despite the current complex international environment, further integration into the world economy will not only advance the country’s strengths in technology and innovation, but more importantly, increase China's soft power by creating a more peaceful, friendly, and lovable image on the world stage. Ultimately, one of the most important and challenging tasks for China is to increase mutual understanding, receive global recognition and expand its circle of friends internationally—something that cannot be achieved through economic growth alone.

The arrival of McDonald’s in Moscow and Beijing marked the reopening of these markets to the world and the dawn of a golden age of globalization, a tradition that China hopes to continues to advance into the future and beyond.

Starting in the 1990s, multinationals spread across the globe as technology advanced, trade barriers were cut, and finance was liberalized, making it easier than ever for goods, capital, people, and ideas to move across borders. Transnational firms helped knit the world together with supply chains, bringing investment, jobs, a shared consumer culture, and new ways of doing things.

How times have changed. Anti-globalization sentiment has been on the rise for some time and since the Ukraine crisis began there has been an exodus of multinationals from Russia, including McDonald’s, Starbucks, and Coca-Cola. At the same time, Mastercard and Visa have suspended operations in Russia, cutting off Russian citizens and companies from large swathes of the global financial system.

This trend goes beyond the Ukraine crisis. Multinational corporations, long the key drivers of globalization, increasingly find themselves caught in geopolitical crossfire, becoming tools and targets of economic statecraft in the new game of weaponized interdependence.

Yet, for all the talk of doom and decoupling amid a “new Cold War,” the facts on the ground in China tell a very different story as multinationals continue to reap bumper profits and contribute to local development.

In 2021, foreign direct investment into the Chinese mainland surged by 20.2% to US$173.48 billion. Foreign investor sentiment remains overwhelmingly positive. The most recent survey by the European Union Chamber of Commerce in China (EUCCC) found that 59% of members are considering expanding their investment in the country, up 8 percentage points from 2020.

Similarly, the last survey by the US-China Business Council (USCBC) found that 43% of members plan to accelerate resource commitments to China over the next 12 months, up 18 percentage points from the year before.

The previous Two Sessions further underscored China’s role as a growth engine and safe harbor for foreign investment amid heightened global volatility.

This official GDP target of around 5.5% for 2022 signaled a robust pro-growth policy stance. The stimulus program outlined to achieve this was notably business-friendly, including 2.5 trillion yuan in tax rebates.

Premier Li Keqiang’s government work report also outlined further business-friendly reforms such as fully implementing list-based management for matters requiring government approvals and nationwide recognition of electronic licenses to facilitate trans-regional operations.

Improving the business environment has been a key part of his agenda over the past decade, which has seen business entities in China grow from 100 million to 150 million. His tenure also saw key breakthroughs in foreign investment, including a new law to help level the playing field for foreign firms, and a foreign investment negative list that has been cut to just 31 items today.

Despite this progress, there is still room for improvement. This was highlighted by several contributors to Transition and Opportunity: Strategies from Business Leaders on Making the Most of China’s Future, a publication by the Center for China and Globalization.

In some policy areas, as EUCCC President Jörg Wuttke writes in the book, there is still a gap between the rhetoric and implementation. Addressing these issues will enhance multinationals’ ability to act as change catalysts, helping to cultivate talent and lay the foundation for industrial upgrading by providing high-quality inputs and raising the expectations of Chinese consumers.

On the corporate side, foreign investors must play to their strengths and find niches aligned with China’s long-term development strategy, which combines regional integration with efforts to make the economy more sustainable and less reliant on external resources, technology, and markets. This year’s government work report points to three promising areas in particular.

First, foreign investment in sectors such as advanced manufacturing and chemicals, which can help China internalize industrial chains will be encouraged and may benefit from deeper market opening or preferential policies. The work report called for the steering of foreign investment towards manufacturing, and hi-tech areas in China’s central, western, and northeastern regions.

Second, sectors that aid domestic spending, such as for cars and other consumer goods remain promising, given favorable policy directions and the continued rise of China’s middle class. At the Two Sessions, new measures were pledged to support spending on big-ticket items such as cars and home appliances.

Foreign ownership limits for carmakers were scrapped this year, allowing firms like Tesla to comfortably ramp up production and sink roots by building R&D centers in China. The Regional Comprehensive Economic Partnership raises the potential for China to develop into a base for regional car exports.

Third, foreign firms with strengths in low-carbon fields can benefit from China’s dual carbon goals, using sectoral and local decarbonization plans, set to be released this year, to identify market opportunities and forge partnerships with local players, especially the state-owned enterprises (SOEs) tasked with driving decarbonization by building alliances and green supply chains.

Green partnerships with SOEs can also help multinationals embed themselves in low-carbon supply chains and gain access to new customers, given SOEs’ role as orchestrators or “gatekeepers” for key sectors and projects.

Success will not come easy in China’s fast-paced and increasingly competitive market. Gone are the days when global firms could rely on advantages in technology and branding to ride a wave of double-digit GDP growth by simply replicating their models in China.

But multinationals still have a crucial role to play in local development. In an uncertain world, China continues to be a source of growth and opportunity for multinationals that can adapt and localize to rise above the competition.

By Henry Huiyao Wang for Springer Nature.