Why China's 2025 economic expansion merits recognition

Editor's note: Hannan Hussain, a special commentator on current affairs for CGTN, is co-founder of Initiate Futures, an Islamabad-based policy think tank. The article reflects the author's opinions and not necessarily the views of CGTN.

New data released by China's National Bureau of Statistics (NBS) shows a marked expansion of the Chinese economy in 2025. The five-percent year-on-year growth not only satisfied the set annual target of around five percent, but also laid the groundwork for accelerated growth heading into 2026. Here is how.

First, the key economic indicators are positive. The industrial production of high-impact goods, for example, clocked a nearly six percent year-on-year increase. With sectors such as equipment and high-tech manufacturing demonstrating substantial value addition – at over nine percent on both fronts – it is clear that the contributors to China's growth target were multisectoral and diverse by output.

Consumer spending demonstrated its relevance to the economic growth trajectory. In 2025, China's final consumption expenditure contributed 52 percent to the GDP, making it a main driver for continued economic growth. Given the multifaceted challenges facing the global economy last year, the present scorecard, showing final consumption expenditure contributed 52 percent of overall economic growth, up by five percentage points compared to 2024, is a lesson in resilient economic planning.

The aggregate retail sales of consumer goods, valued at 50.12 trillion yuan (about $7.15 trillion), showed a 3.6 percent year-on-year rise. Surging online retail sales and the service sector delivered a sizeable impact on the overall growth sum, showing the effect of pragmatic policies.

Foreign trade expansion added to future growth optimism. Through a steady, year-on-year expansion of 3.8 percent, it signaled a long-term consistency in the face of global headwinds. China's relations with countries across continents, the diversified trade offerings under the Belt and Road Initiative (BRI), and deep expertise in engaging manufacturers across sectors, collectively demonstrate robust trade preparedness.

The added response from partner countries in trade signals trust in China's manufacturers and the vitality of the country's opening-up policy, and lends further optimism for its high-quality growth, a trajectory seeking to decrease trade barriers.

Interestingly, the United Nations Trade and Development last year flagged protectionism and shifting trade strategies as pressing risks to international trade, signaling caution for countries. To China's credit, it has weathered those challenges effectively, with a 6.3 percent growth in its trade with BRI partner countries, a surge responsible for over 50 percent of its aggregate foreign trade volume.

"Facing abrupt changes in the external environment and mounting domestic difficulties and challenges, China adopted more proactive and effective macro policies, which helped offset adverse external shocks and stabilize the foundation for development amid headwinds," Kang Yi, head of China's NBS, said.

One of the strengths of China's economic growth trajectory is the premium it places on multiyear planning. The year 2025 marked the end of the 14th Five-Year Plan period (2021-2025), and the completion of major economic and social development targets suggests that the economy is ideally positioned to transition towards 2026.

The key takeaway in this transition is the ability to lay the groundwork for the 15th Five-Year Plan's execution. Factors such as the development of new quality productive forces, macro policies that supplement multisector growth contributions, and expansion of domestic demand carry considerable promise.

Together, these determinants have the potential to shape China's quantitative growth. As Zou Lan, deputy governor of the People's Bank of China, noted, "The integration of scientific and technological innovation with industrial innovation is accelerating, new growth drivers are gaining momentum, domestic demand potential continues to be unleashed, and domestic and international circulation are running more smoothly."

Given the fact that more proactive macroeconomic policies are already stated priorities, there is optimism that China can carry forward its economic expansion momentum deep into 2026.

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