Adaptability in transformation: Exploring the impact of innovation and consumption on China's development strategy
In a significant shift towards a more resilient economic model, China is navigating global economic instability by focusing on technological innovation, strategic policies, and domestic consumption. This transformation was highlighted at the 16th Annual Meeting of the New Champions, which took place from 24 to 26 June 2025 in Tianjin, China, under the theme "Entrepreneurship for a New Era." Organized by the World Economic Forum, the event convened over 1,700 leaders from various sectors to explore entrepreneurial solutions to global challenges.
One of the key areas of focus is export competitiveness and private sector growth. China's economy remains driven by export competitiveness, a crucial factor in maintaining its growth momentum despite global trade challenges. The private sector is playing an increasingly important role, contributing to economic resilience and growth.
Artificial Intelligence (AI) is seen as a central force shaping China's growth trajectory. AI-driven industrial transformation is positioning China for leadership in next-generation industries. AI is expected to have a significant impact across various sectors, beyond just computing. China's combination of advanced R&D, mass production capacity, and integrated supply chains supports scale-based, cost-effective innovation.
China is also leveraging monetary, fiscal, and property sector policy easing to maintain growth momentum, although growth is projected to moderate. There is a focus on household consumption as a key driver of future growth. This involves redirecting fiscal resources towards healthcare and social protection, addressing local government financial constraints, and pursuing a more progressive fiscal system.
The Dual Circulation Strategy is another critical component of China's growth strategy. This strategy emphasizes domestic innovation while accessing global supply chains, fostering both internal and external economic circulation. China continues to open up its economy strategically, focusing on sectors like green energy, advanced manufacturing, and financial services. This includes reforms to attract foreign investment and enhance technology transfer.
Experts also underscored technological innovation, particularly in artificial intelligence, as a central force shaping China's growth trajectory. Joseph Luc Ngai, Chairman for Greater China at McKinsey & Company, stated that Chinese consumers are trading smartly, maintaining or improving their lifestyles without spending more. Keyu Jin emphasized that increasing domestic consumption will require parallel efforts to expand employment opportunities and boost social spending on healthcare and education.
Such efforts are expected to create more harmonious relations between China and its trading partners. Ongoing dialogue between China and the US is considered essential, especially regarding competition in green technologies and advanced manufacturing. Topics discussed at the meeting included adaptation, economy, financing, international cooperation, investment, R&D, trade, resilience, innovation, artificial intelligence, cities, policy & finance, and regions, with a focus on China and the global economy.
China met its 5% GDP growth target in 2024 and is on track for similar performance in 2025. The growth is driven by export competitiveness, growing private-sector activity, and increasing technological momentum. Boosting domestic consumption, advancing employment, and unlocking new productivity gains through innovation are critical as China transitions to a domestic demand and services-centered economy.
In the realm of business, China is tapping into artificial intelligence (AI) as a primary engine for growth, positioning itself for leadership in next-generation industries, and expecting AI's significant impact to extend beyond computing. In terms of funding and investment, the focus on household consumption is seen as a key driver of growth, with endeavors to redirect fiscal resources towards healthcare and social protection, addressing local government financial constraints, and pursuing a more progressive fiscal system.
