In an era defined by rapid technological innovation and shifting geopolitical alliances, China has emerged as a formidable force reshaping the global economic landscape. Over the past five years, the nation has embarked on a transformative journey – from a manufacturing powerhouse to a dynamic leader in high-tech industries, renewable energy, and international economic diplomacy. As the world watches closely, it is becoming increasingly clear that China’s economic evolution is not only altering domestic policies but is also creating ripples across global markets.
A quiet renaissance amid domestic challenges
Despite a backdrop of domestic challenges – ranging from a significant restructuring of the real estate market to subdued consumer confidence – China managed to record an impressive 5% economic growth in 2024. This resilient performance is particularly striking, given the current global uncertainties. In fact, over the past decade or so, China’s economic output has contributed nearly 30% to worldwide growth. Commentators both in China and abroad have thus espoused a narrative of a country that has managed to turn adversity and internal challenges into opportunity – both for itself and for other nations.
Global trade and diplomatic outreach
China’s evolving role on the world stage is perhaps most visible in its approach to international trade and investment. The nation has increasingly positioned itself as a key architect of global economic diplomacy, extending its influence far beyond traditional trade practices. The Belt and Road Initiative (BRI), launched in 2013, stands as a striking example of this ambition. With participation from over 140 countries by 2025, the BRI has grown into much more than a series of infrastructure projects; it represents a grand vision for global connectivity. By 2022, China had invested over £800 billion in BRI projects – investments that have spanned railways, modern ports, and energy infrastructure across Asia, Africa, and Europe. Such vast financial commitments underline China’s determination to cement its economic influence far beyond its borders.
In a similar vein, the Regional Comprehensive Economic Partnership (RCEP) has further bolstered China’s international clout. Coming into effect in 2022, this free trade agreement, now the world’s largest, binds 15 countries together and accounts for roughly 30% of global GDP. The RCEP has significantly enhanced market access for Chinese products and reduced tariffs, thereby strengthening ties with countries across Southeast Asia. With ASEAN now standing as China’s largest trading partner, surpassing even the European Union and the United States, it is clear that Beijing’s economic diplomacy is carving out new avenues of global cooperation.
Export competitiveness and technological prowess
At the heart of China’s global strategy lies its remarkable export performance. In 2024, Chinese goods exports grew by 7.1% year on year, reaching an astounding 25.45 trillion yuan (£3.23 trillion). Moreover, the overall foreign trade value hit a record high of 43.85 trillion yuan (£5.57 trillion). Such staggering figures illustrate not only the sheer scale of China’s export market but also its rapid evolution from traditional manufacturing to a more sophisticated, technology-enhanced export economy.
Key sectors have driven this transformation. Machinery exports, which have grown by 8.7%, now account for nearly 60% of total exports. High-tech products, ranging from electric vehicles and 3D printers to industrial robots, have seen rapid expansion, reflecting a deliberate shift towards innovation and quality. In addition, the burgeoning cross-border e-commerce sector has reached a value of about 2.63 trillion yuan (£334 billion), underscoring the digital transformation of global trade.
Fuelling growth with outbound investment
China’s ambitions extend well beyond its borders. In 2024, the nation’s outbound foreign direct investment (FDI) surged to an impressive $189.1 billion (£151 billion). These outbound investments have been strategically directed towards sectors such as technology, renewable energy, and infrastructure. Many of these investments are aligned with the BRI, reinforcing China’s commitment to fostering international economic cooperation. Major recipient countries, ranging from Brazil and Mexico to Saudi Arabia, Egypt, Indonesia, and South Africa, have benefited from China’s robust capital outlay, which is not only driving economic growth in these regions but also deepening global ties.
Speaking at the “1+10” dialogue in Beijing with heads of 10 international economic organisations in December 2024, Premier Li Qiang said that China supports international economic organisations and will actively undertake international obligations commensurate with its capabilities, and work with all sides to promote sound and steady development of the world economy.
This sentiment resonates deeply with nations across continents, emphasising that China is not simply a recipient of global admiration, but an active shaper of the international economic order.
Innovation, AI, and the digital future
Perhaps nowhere is China’s commitment to future technologies more evident than in its rapidly advancing high-tech sectors. With sustained innovation propelled by both the private sector and robust government support, China has become a global leader in fields such as renewable energy, electric vehicles, and AI. The rapid deployment of 5G networks and the development of smart cities are only the beginning; China’s tech giants and start-ups alike are pioneering solutions that promise to revolutionise industries far beyond its borders.
AI has emerged as a particularly dynamic area of development. Companies like DeepSeek have recently captured international attention, symbolising China’s growing prowess in both AI research and practical applications. Meanwhile, innovative firms such as Minimax and Moonshot are making significant inroads into consumer applications, while organisations like ModelBest push the boundaries of upstream AI research.
Renewable energy and the green transition
As climate change continues to dominate global discourse, China has positioned itself at the forefront of the renewable energy revolution. According to the International Energy Agency, Chinese exports now account for 35% of the global renewable energy equipment market outside of China, a share that is expected to grow further as demand for sustainable solutions intensifies. Over the past year, China exported 120 gigawatts of solar panels – a 15% increase over 2023 – alongside 80 gigawatts of wind turbines, representing a 10% rise. Additionally, battery exports surged by 20% to reach an output of 50 gigawatts, while electrolyser exports increased by 25% to a total of 30 gigawatts.
These achievements underscore Beijing’s dual commitment to driving economic growth and tackling environmental challenges head-on. “China’s investments in renewable energy are not only pivotal in the fight against climate change, but they are also creating vast new economic opportunities,” explains Aisha Rahman, an energy policy adviser with the United Nations Environment Programme (UNEP). “This green transition is a critical element of China’s strategy to lead the global economy into a more sustainable future.”
The electric vehicle (EV) sector provides another compelling illustration of this commitment. In 2024, China’s domestic market for new energy vehicles reached a striking 48% share, with sales exceeding 12 million units. Leading domestic manufacturers, such as BYD, captured a commanding 34.1% of the market, while international players like Tesla maintained a modest 6% share. Furthermore, more than a million EVs were exported, a success story bolstered by strategic outbound investments in both vehicle production and battery technology.
Navigating geopolitical tensions
No discussion of China’s evolving economic role would be complete without addressing the geopolitical challenges that lie ahead. The protracted trade dispute with the United States continues to cast a long shadow over bilateral relations. Despite various diplomatic efforts, tariffs on Chinese goods remain a sticking point for industries ranging from electronics to agriculture, prompting Beijing to diversify its trade partnerships and actively seek new markets.
Technological competition further complicates the picture. With the United States imposing restrictions on key Chinese tech firms, Beijing has been forced to ramp up investments in domestic research and innovation. In many ways, the tech restrictions imposed by the United States have spurred a wave of ingenuity and self-reliance within China. It is a classic case of adversity fuelling innovation, which has a knock-on effect both in China and around the world.
Political conflicts, too, remain a persistent challenge. Issues surrounding Hong Kong, Taiwan and the South China Sea have elicited varied international responses – from sanctions to cautious diplomatic overtures. These disputes, though complex and often contentious, are being managed through a combination of strategic negotiation and economic diplomacy, reflecting China’s long-term commitment to securing its place as a global leader.
The promise of digital and green economies
Looking forward, the future for China’s economy appears as promising as it is challenging. On one hand, the nation is poised to capitalise on the exponential growth of its digital economy, a sector expected to contribute more than half of China’s GDP by 2025. Innovations in e-commerce, fintech, and digital infrastructure are opening new avenues for business and fundamentally transforming the way commerce is conducted on a global scale. “China’s digital economy is not just a driver of domestic growth; it offers a glimpse into the future blueprint of global commerce,” comments an industry insider familiar with emerging trends.
At the same time, Beijing’s commitment to green technology offers a beacon of hope in the global fight against climate change. Continued investments in renewable energy, electric vehicles and energy efficiency are expected to generate significant economic dividends, while simultaneously addressing pressing environmental challenges.
The road ahead: A balancing act
As China continues to redefine its role in the global economy, it faces the formidable challenge of balancing domestic imperatives with international ambitions. The nation’s outward investments in infrastructure, technology, and renewable energy are a testament to its desire to lead on the global stage. Yet these efforts are accompanied by the need to navigate trade disputes, manage technological rivalries, and address complex political conflicts – a balancing act that will require both deft diplomatic manoeuvring and a steadfast commitment to innovation.
In conclusion, China’s evolving role in the global economy is a story of transformation, resilience, and ambition. From robust export performance to strategic outbound investments, China is not merely adapting to a changing world; it is actively shaping it. Through pioneering advances in artificial intelligence, renewable energy, and electric mobility, Beijing is crafting a future that promises economic prosperity and a more interconnected, sustainable world.
As the international community navigates the uncertainties of a rapidly evolving economic landscape, one fact remains indisputable: every infrastructure project built, every technological breakthrough achieved, and every trade partnership forged is a clear sign that China’s influence is set to expand further. The coming years will undoubtedly bring both challenges and opportunities, but the transformative journey of China’s economy will continue to reshape the global order for generations to come.
The 2025 UK-China Business Forum on March 5th is a full-day conference focused on the theme of UK-China partnerships and the opportunities for growth in both markets through export and investment.
During the morning session, the Forum will explore how to develop these opportunities, analysing both the benefits and challenges from a practical point of view, with senior businesspeople sharing their valuable insights through real-life case studies.
In the afternoon, the Forum will examine four key areas:
- Ageing populations require a different approach to healthcare, with more focus on prevention rather than cure, there is huge scope for UK-China academic and business collaboration.
- The Chinese consumer, amongst which there is undoubted interest in UK brands, where engagement is built on cultural relevance and emotional connection.
- Smart transport solutions, which have the potential for tremendous benefits, both for the UK as a whole, as well as for businesses and their employees.
- Green transition, an area where China and the UK are both looking for wins, and where there is potential for cooperation and growth in both markets.
The event will be followed by CBBC’s Spring Reception.
Click here for more information and to register for the UK-China Business Forum
