China Economic Outlook
The Asian powerhouse:
China is the world's second-largest economy in nominal terms, behind the United States, and the largest when adjusting for purchasing power parity (which accounts for the cost of living). China's economic data is currently mixed: The country's economy had been growing rapidly since the 1980s, with annual growth rates exceeding 6–8%, but the onset of the Covid-19 pandemic in 2020, a trade war with the U.S. and a property sector downturn have complicated its growth trajectory.
Manufacturing hub:China is the world's largest exporter and manufacturer, producing a range of goods such as textiles, electronics and heavy machinery. Furthermore, its companies lead the way in several emerging technologies, such as solar panels and electric vehicles. The country has long maintained a significant trade surplus.
Consumer market:Domestically, with a burgeoning middle class and a population of over 1.4 billion people, China benefits from a massive consumer market.
Infrastructure investment:China has invested heavily in infrastructure projects—including high-speed railways, highways, and ports—improving domestic connectivity and facilitating international trade. Moreover, China's ambitious Belt and Road Initiative aims to strengthen economic ties and expand its influence in countries across Asia, Africa, Europe, and beyond through infrastructure investments.
Economic challenges:China faces several economic headwinds, including an aging population, environmental pollution, and debt concerns in its corporate and local government sectors. More recently, since the Trump presidency, U.S. sanctions on Chinese goods and technology have escalated. This has hit trade and encouraged some firms to move production away from China. Moreover, the harsh on-off lockdowns imposed until late 2022 due to the Covid-19 pandemic hit confidence and depressed activity. Meanwhile, domestic reform progress has largely stalled, and the economy has become more state-driven, to the detriment of the country's dynamic private-sector firms. In addition, highly indebted real estate firms are a risk to stability.
China's economic outlook:The economy will continue to slow in the coming years as the easy gains from catch-up growth with the developed world fade, the decline in the population accelerates and tensions with the West hamper technological advancement. China's ability to escape the middle-income trap that other emerging economies have faced will depend crucially on its ability to generate sustained productivity gains ahead.
China's Macroeconomic Analysis:
Nominal GDP of USD 17,806 billion in 2023.
Nominal GDP of USD 17,977 billion in 2022.
GDP per capita of USD 12,734 compared to the global average of USD 10,589.
GDP per capita of USD 12,616 compared to the global average of USD 10,589.
Average real GDP growth of 6.1% over the last decade.
Average real GDP growth of 6.4% over the last decade.
Sector Analysis
In 2021, services accounted for 53% of overall GDP, manufacturing 27%, other industrial activity 13%, and agriculture 7%. Looking at GDP by expenditure, private consumption accounted for 38% of GDP in 2021, government consumption 17%, fixed investment 43%, and net exports 2%.International trade
In 2021, manufactured products made up 94% of total merchandise exports, mineral fuels 1%, food 2%, ores and metals 1% and agricultural raw materials 0%, with other categories accounting for 2% of the total. In the same period, manufactured products made up 56% of total merchandise imports, mineral fuels 16%, food 8%, ores and metals 15% and agricultural raw materials 3%, with other goods accounting for 2% of the total. Total exports were worth USD 3,544 billion in 2022, while total imports were USD 2,707 billion.Main Economic Indicators
Economic growthChina's GDP growth slowed notably over the last decade, due to an ageing, declining population, Western trade and tech restrictions, more heavy-handed state intervention, and reduced potential for catch-up growth. However, China's growth continued to outpace that seen in other major economies. To read more about GDP growth in China, go to our dedicated page.
Fiscal policy
China's fiscal deficit has broadened over the last decade, due to the need to support the economy during the COVID-19 pandemic, invest in high-tech manufacturing to break free from Western trade restrictions, and offset the downbeat property sector and soft consumer spending. Find out more on our dedicated page.
Unemployment
China's unemployment rate over the last decade remained relatively low, demonstrating the government's focus on maintaining stable employment as a priority. The rate fluctuated slightly but stayed under control, even during economic slowdowns. The COVID-19 pandemic caused a brief spike in unemployment, but China's swift response and economic stimulus measures helped stabilize the job market. That said, double-digit youth unemployment is a concern for policymakers. For more information on China's unemployment click here.
Inflation
Throughout 2014 to 2023, China experienced moderate inflation, typically ranging between 1% and 3%. This stability was a result of China's slowing economic growth, vast manufacturing capacity and targeted government interventions. Inflation turned negative towards the end of 2023, due to subdued domestic demand and a weak property sector. Go to our China inflation page for extra insight.
Monetary Policy
China's central bank policy rates have declined gradually but steadily over the last decade as the monetary authorities adapted to a lower-growth, low inflation environment. China also used numerous other monetary policy tools extensively in order to manage the economy. The desire to protect the value of the yuan likely discouraged the bank from embarking on more aggressive rate cuts. See our China monetary policy page for additional details.
Exchange Rate
The Chinese yuan experienced a depreciation against the US dollar over the last decade, with periods of volatility. While facing depreciatory pressure due to trade tensions, economic slowdown at home, and investor concerns over state intervention in the economy, the yuan's movements were largely contained by the People's Bank of China. This reflected the government's focus on maintaining economic stability and avoiding excessive volatility in the exchange rate. For more info on the yuan, click here.
Economic situation in China
After annual GDP growth slowed to 4.6% in Q3 from 4.7% in Q2, economic momentum seems to be picking up somewhat in Q4, boosted by government stimulus measures and a strong external sector. In October, retail sales and exports both beat market expectations; the latter grew more than twice as fast as markets had predicted. Moreover, in November, new home sales in major cities surged year on year, and manufacturing sector business conditions improved for the second straight month. In politics, U.S. President-elect Donald Trump recently threatened to slap an extra 10% tariff on all Chinese imports as soon as he enters office in January, having spoken of tariffs as high as 60% while on the campaign trail. This threat is likely to buoy Chinese exports towards the end of 2024 and into early 2025, as companies try to get ahead of higher tariffs.China Economic Forecasts
Projections out to 2034.53 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 61 expert analysts.
Want to get insight on the economic outlook for China in the coming years? FocusEconomics collects projections out to 2034 on 53 economic indicators for China from a panel of 61 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the China economy. To download a sample report on the China's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.
China Economic Indicators
Frequently Asked Question about China's Economy
Is China's economy growing?
Why is China so important to the global economy?
Will China's economy overtake the U.S. economy?
The economy is growing, though that growth has slowed sharply over the last decade as the investment-focused economic model has showed diminishing marginal gains. In addition, economic activity has been weighed on recently by trade tensions, the government's focus on boosting state firms, a private-sector crackdown and a declining population.
China's economic growth rate will continue to slow in the coming years and decades as demographic headwinds increase and easy catch-up gains are exhausted.
China boasts vast manufacturing capabilities, making it the world's factory for a wide array of products—China accounts for 30% of global manufacturing output and is the world's largest exporter. This positions China as an indispensable node in global supply chains.
Additionally, with a population exceeding 1.4 billion and a growing middle class, it offers an enormous consumer market. Its Belt and Road Initiative expands its economic influence by investing in infrastructure projects worldwide, while rapid advancements in telecommunications, electric vehicles, solar power and AI make China a global innovation leader.
China is also a major player in international finance, holding large foreign exchange reserves and U.S. Treasury securities, which gives it considerable sway over global financial markets. Finally, as a significant importer of raw materials and energy, China's consumption patterns influence commodity prices globally.
Our analysts expect China's economy to become larger than the U.S. economy in nominal GDP terms in the 2030s. That said, there are multiple downside risks to China's economy, including high indebtedness, excessive state interference in the economy and trade tensions with the West.