A worker produces micro-steel-cased lithium-ion batteries in the electrolyte injection workshop at a company in Suixi County Economic Development Zone in Huaibei on Nov. 8, 2025. (CFP Photo)
The annual Central Economic Work Conference held in Beijing last week reviewed China's economic performance in 2025, but more importantly, it set priorities for the country's economic work in the coming year.
During a recent exclusive interview with South, Tu Xinquan, Dean of the China Institute for WTO Studies at the University of International Business and Economics, said the Chinese economy has performed quite well overall, given its GDP growth and the upgrading of its industrial chain.
A year of progress in 2025
"China has made tremendous progress in the past year," Tu noted. According to the World Bank's latest China Economic Update, growth is projected at 4.9% in 2025. The upgrading of China's industrial chain has yielded remarkable outcomes.
This success can be attributed to technological accumulation and industrial policies, Tu analyzed, noting the technological accumulation is due to China's rising ability in independent research and development, along with the country's cooperation with the international community, whether through foreign investment or other technological collaborations.
"Industrial policies such as Made in China 2025 have played a pivotal role," Tu underscored. The outstanding results in China's industrial chain are also an accumulation of previous efforts combined with the actions of the government and enterprises, creating an accelerating effect.
In recent years, relatively weaker industries in China have achieved significant development. Sectors such as shipbuilding, automobiles, semiconductors, robotics, and biopharmaceuticals have made exceptional progress.
Tu cited the automobile industry as a prime example. "We are now undoubtedly the world's largest exporter, largest producer, and largest market. This is certainly due to the support of industrial policies," he added.
Additionally, Tu observed that industrial policies in China now take many forms and are more market-oriented. The government provides support, but how this support is delivered to enterprises and industries in a more market-oriented way is also critical. The country now uses industrial investment funds instead of the previous model of direct government subsidies.
Weak domestic demand as a looming risk
Tu noted that after the annual Central Economic Work Conference, the policy direction is clear. Domestic demand has been identified as a priority.
He explained that China's long-term trade surplus has relied on foreign demand to offset insufficient domestic demand. However, given the unreliable foreign demand as global geopolitics intensify, China needs to place greater emphasis on domestic demand and must expand it.
In terms of investment demand, China is set to continue consolidating the development momentum of advanced manufacturing, he projected.
"Investment will continue, but the scope of industries involved will decrease with a greater focus on key emerging industries. Therefore, the total scale of manufacturing investment may decline," he added.
Regarding real estate, Tu estimated that the country will increase stimulus, as the sector still has a significant impact from supply and investment perspectives.
"China's real estate market still has room for growth," Tu noted. Chinese people have high demands for housing and constantly seek to improve their living conditions. The demand for improved housing is enormous. The key is how to organize it and raise the necessary funds, as he analyzed.
According to Tu, the structural shift will still take time. It is indeed a structural adjustment. The transition from a supply-led structure to a consumption-led structure requires many adjustments.
"Our past policy system and institutional arrangements have been more supply-oriented. Traditionally, Chinese thinking leans towards supply and emphasizes production. This definitely requires some long-term structural changes," he highlighted.
Reporter | Zhang Ruijun
Editor | Yuan Zixiang, James Campion, Shen He
