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China's statistical communique on the 2025 national economic and social development plan portrays an economy that has not only met its growth target but is also entering an innovation-driven, service-oriented phase of development. It is growing more through quality than sheer speed.

According to the communique, China's GDP grew 5% in 2025, meeting the target set at the start of the year. This figure is not just a sign of resilience, but confirms that the country has shifted from high-speed to high-quality growth.

Services and advanced manufacturing continue to gain weight in the overall economic structure. According to the communique, the value added of high-tech manufacturing rose by 9.4% and accounted for 17.1% of the total value added of all industrial enterprises above the designated size. The business revenue of strategic emerging service enterprises grew by 9.3% year-on-year, while that of high-tech service enterprises rose by 7.9%.

The tertiary industry grew faster than both agriculture and traditional industry, consolidating the long-running rise of the service economy. And within the tertiary category, modern services such as information technology, software, and business services outpaced the average by a wide margin. This, to some extent, shows the Chinese economy is trying to move up the value chain.

While the Chinese economy once relied heavily on property and infrastructure as its main growth engines, the communique shows that capital is gradually shifting away from traditional industries toward manufacturing upgrades, high-tech sectors, and equipment renewal. This indicates the country's economic growth trajectory toward new, quality productive forces.

High-quality development is not just about what an economy produces; it is also about how growth is generated on the demand side, and consumption has increasingly become a more important driver of China's economic growth.

Latest statistics from the National Bureau of Statistics show final consumption expenditure accounted for 52% of economic growth in 2025, up 5%age points from the previous year. In 2025, national per capita consumption expenditure rose 4.4% year over year, or 4.4% in real terms excluding price changes.

Services consumption, in particular, has strengthened, with households spending more on travel, culture, education, health, and digital services: service retail sales grew 5.5%, and service-related spending accounted for 46.1% of per-capita consumption expenditure.

This indicates gradual progress toward a more consumption-driven model, in line with China's long-standing restructuring goals. But the boost in domestic consumption does not contradict China's determination to further open up.

In 2025, the country saw 70,392 new foreign-funded enterprises established, a 19.1% rise from the prior year. Notably, 19,756 new enterprises were set up with investment from countries participating in the Belt and Road Initiative, up 14.7%, while direct foreign investment into China totaled 116.8 billion yuan, increasing 1.9%.

The 2025 communique depicts an economy moving further into a "new normal" – while growth is slower than previous decades, it is more services- and innovation-driven, and more structurally balanced. Over the long term, this is essential to avoid the trap of diminishing returns and chronic overcapacity.

China's economic transition is real: A higher share of services, faster growth in modern service industries, robust expansion in advanced manufacturing, and a greater contribution of consumption all align with the strategic goals laid out by the Chinese government. Against the backdrop of external frictions, China is steadily consolidating its position in advanced manufacturing and global value chains.

The year 2025 marked the conclusion of the "14th Five-Year Plan" and was a year of profound significance in advancing Chinese modernization. Amid profound and complex changes in both domestic and international situations, China has managed to propel its economy toward innovation and higher quality.

The author Jianxi Liu is a Beijing-based analyst of political and international relations. With 10 years of experience in media, she writes on topics pertaining to the US, the EU, and the Middle East.

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