From strategic pivot to global engine: China's decade of supply-side reform and industrial revolution

Editor's note: Zhang Jianping, a special commentator on current affairs for CGTN, is deputy director of the academic committee of the Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce. Dong Jianye is Zhang's research assistant from the Institute of Economic Research at Xiamen University. The article reflects the authors' opinions and not necessarily the views of CGTN.

Ten years have passed since January 18, 2016, when Chinese President Xi Jinping delivered a seminal address at a study session, systematically expounding on the "new normal" of China's economic development and the strategic necessity of supply-side structural reform. That moment marked a decisive inflection point in China's modern economic history – a deliberate pivot away from the debt-fueled, demand-side stimulus of the past toward a model predicated on quality, efficiency and structural optimization.

Standing in 2026, the trajectory of the past decade reveals that this philosophy was not merely a domestic adjustment but a roadmap for profound industrial metamorphosis. Guided by its new development philosophy featuring innovation, coordination, greenness, openness and shared development, China has successfully cultivated dynamic new growth drivers – specifically in semiconductors, shipbuilding, lithium batteries, solar panels and new energy vehicles (NEVs) – that are now powering not just China's high-quality development, but the global economy as well.

The success of this reform is most visible in the meteoric rise of industries such as electric vehicles (EVs), lithium batteries and solar products, which have replaced traditional low-value manufactures as the pillars of Chinese foreign trade. This shift is the direct result of the supply-side strategy to improve weak links and invest in high-tech capacity.

In the automotive sector, the results are remarkable. In 2025, China's annual production and sales of NEVs both exceeded 16 million units, ranking first globally for 11 consecutive years. This industrial upgrade has spilled over into global markets, where Chinese EVs are accelerating the green transition by offering advanced technology at accessible price points.

Similarly, in the lithium battery sector, China has secured a dominant position, with exports reaching $61.1 billion in 2024, ensuring the stability of global supply chains for everything from consumer electronics to grid energy storage.

Furthermore, the supply-side reforms have revitalized heavy industry through technological innovation, most notably in shipbuilding. By pivoting toward high-value vessels like liquefied natural gas carriers and green-fuel ships, China has cemented its status as the world's shipbuilder. Data from 2025 reveals that China captured approximately 70 percent of all new global shipbuilding orders, a testament to its manufacturing resilience and efficiency.

In the critical domain of semiconductors, China has turned external pressure into internal momentum. Despite strict export controls imposed by some Western nations, China's integrated circuit industry has expanded its capacity in "legacy" or foundational chips, which are the workhorses of the global industrial economy. In late 2025, exports of integrated circuits continued to show robust double-digit growth, satisfying the voracious hunger of the digital economy in Southeast Asia and beyond.

Crucially, this industrial capacity is not, as some critics allege, a source of "overcapacity" that threatens the world, but rather a vital contribution to global stability and development. China's vast production capabilities have significantly lowered the cost of clean energy technology, making the climate goals of the Paris Agreement attainable for developing nations.

For instance, in the 12 months leading up to mid-2025, imports of Chinese solar panels to Africa surged by 60 percent, providing gigawatts of clean, affordable power to a continent historically plagued by energy deficits. This aligns perfectly with the "shared development" aspect of the new development philosophy, proving that Chinese modernization offers tangible dividends to the Global South.

By supplying the "hardware" for the global green transition – efficient solar panels, affordable EVs and reliable ships – China is providing a "China solution" to the dual challenge of economic stagnation and climate change.

As China moves towards its 15th Five-Year Plan (2026–2030) period, the foundation laid by the 2016 reforms appears more robust than ever. The economy has transitioned from being driven by factor inputs to being driven by innovation, with research and development expenditure reaching nearly 2.7 percent of GDP in 2024.

This decade of structural reform has proven that a government can effectively guide the market to resolve structural imbalances, fostering industries that are both globally competitive and socially beneficial. In a fractured world economy, China's adherence to these principles serves as a stabilizing anchor, demonstrating that high-quality development is not a zero-sum game, but a pathway to shared global prosperity.

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