“We welcome extra Indian corporations to benefit from platforms such because the China Worldwide Import Expo to convey extra premium Indian merchandise to the Chinese language market and switch commerce deficits into cooperative surpluses.” |Photograph Credit score: Reuters
aWhereas the worldwide financial and commerce order has been dealt a severe blow, China’s financial juggernaut has as soon as once more proven sturdy resilience, with GDP anticipated to exceed 140 trillion yuan (roughly $20 trillion) in 2025. This corresponds to a 5% enhance over the earlier 12 months. China’s contribution to world financial development is anticipated to succeed in roughly 30%. The outcomes obtained after this difficult work have acquired quite a lot of consideration from world wide. I want to share some ideas on some particular points that my Indian buddies are involved about.
What’s the driving pressure behind China’s financial development?
In 2025, China’s financial system has moved ahead, pushed by consumption, exports, and funding, however its inside construction has undergone main constructive adjustments.
Home demand is the primary driver of China’s development. In 2025, ultimate consumption expenditure contributed 52% to financial development. Some might conclude that China is “underconsuming” just because the costs of Chinese language items and providers are considerably decrease than the world common. Actually, China ranks among the many world’s prime nations when it comes to whole fundamental consumption, as measured by internationally acknowledged bodily consumption requirements. Of those, the typical variety of cell phones owned per particular person is 1.28, one of many highest on the earth. The typical every day protein consumption is 124.6 grams, which is larger than in the US or Japan. The typical annual consumption of greens is 109.8 kg, the best on the earth.
China’s exports of products and providers confirmed sturdy resilience and contributed 32.7% to financial development, offering a serious enhance. Regardless of the unfavorable worldwide commerce atmosphere, “Made in China”, particularly high-tech merchandise, are extensively in style due to its full industrial chain and constantly bettering innovation means, and exports of high-tech merchandise elevated by 13.2% over the 12 months. Exports to main markets comparable to ASEAN and the European Union maintained steady development, successfully offsetting market fluctuations in different areas.
In distinction, gross capital formation contributed 15.3% to development, revealing that China’s financial system is present process a tough however vital transformation of its development engine. This implies a shift away from dependence on funding and exports to a greater mannequin the place home consumption takes the lead and exports and innovation present the driving pressure. Amid these adjustments, breakthroughs are being achieved one after one other in cutting-edge fields comparable to AI, quantum know-how, and brain-computer interfaces. Output of high-end manufacturing industries comparable to servers and industrial robots continues to develop quickly. Inexperienced industries comparable to renewable electrical energy and clear vitality are thriving. These new drivers clearly define the longer term course of China’s financial system.
Why export manufacturing capability?
China isn’t exporting “overcapacity” however high-quality manufacturing capability and superior options which might be extensively welcomed by growing nations. From the provision aspect, China has no “extra manufacturing capability.” In 2025, the capability utilization price for industries above designated scale in China will likely be 74.4%, equal to the utilization price in the US and the EU in all sectors. The worldwide competitiveness of Chinese language merchandise doesn’t come from subsidies or dumping, however from long-term, intensive R&D funding, sturdy home competitors, and essentially the most complete industrial system.
From the demand aspect, the elemental driving pressure behind China’s speedy development in manufacturing capability is the actual demand from the world market. Many growing nations are introducing China’s high-quality gear and know-how to strengthen their infrastructure, obtain vitality transition, and embark on industrialization. As American economist Jeffrey Sachs identified, the rationale Western nations label China’s manufacturing business as having “overcapacity” stems from “jealousy.”
Scale back India’s commerce deficit with China
In line with knowledge from the China Basic Administration of Customs, commerce between China and India reached a historic excessive of $155.6 billion in 2025. Most of the merchandise imported from China are uncooked supplies and elements which might be a lot wanted in India and contribute to India’s financial improvement. This absolutely demonstrates the sturdy financial complementarity and nice potential for cooperation between the 2 nations.
In the meantime, India’s exports to China confirmed good momentum, reaching $19.7 billion in 2025, a rise of 9.7% year-on-year. Particularly, the expansion charges within the final two months of 2025 had been notably sturdy, reaching 90% and 67%, respectively. China has by no means deliberately pursued a commerce surplus and desires to be the world’s market, not simply the world’s manufacturing facility. China’s tariff degree is 7.3%, which continues to be low by worldwide requirements. The international funding entry detrimental checklist is regularly being shortened and China’s visa-free coverage continues to broaden. Particularly, the Central Financial Work Council has recognized “enlargement of home demand” as the highest precedence for financial exercise in 2026. With a inhabitants of over 1.4 billion individuals, together with over 400 million middle-income individuals, China presents an enormous alternative for high quality Indian merchandise.
We welcome extra Indian corporations to leverage platforms such because the China Worldwide Import Expo to convey extra premium Indian merchandise to the Chinese language market and switch commerce deficits into cooperative surpluses. By shifting in direction of one another, we will share the advantages of improvement and co-create a brighter future for Asia.
Xu Feihong, Chinese language Ambassador to India
