By Hasan Muhammad

Editor's Note: The writer is a freelance columnist on international affairs based in Karachi, Pakistan. The article reflects the author's opinions and not necessarily the views of China Economic Net.

The global economy enters 2026 with familiar shadows of doubt. Trade barriers rise, inflation lingers in advanced nations, and geopolitical strains test supply chains. Yet amid this caution, China's performance stands out. The Organization for Economic Cooperation and Development has just lifted its forecast for China's gross domestic product growth in 2025 to 5 percent, a modest but telling adjustment from its September estimate. This revision captures a broader sentiment among international observers: the world's second-largest economy continues to defy skeptics, propelled by policy agility and underlying strengths.

Such optimism reflects hard data. Through the first three quarters of 2025, China's economy expanded by 5.2 percent year-on-year, surpassing initial expectations. Recent indicators reinforce this trajectory. The manufacturing purchasing managers' index climbed to 49.2 in November, edging up from the prior month and signaling a modest pickup in factory activity. Exports held firm despite global headwinds, buoyed by competitive pricing and demand from emerging markets. Meanwhile, domestic consumption received a lift from targeted programs encouraging trade-ins for vehicles and household appliances.

Foreign financial institutions echo this confidence. Goldman Sachs now sees China's 2025 growth at 5 percent, with upward revisions to 4.8 percent for 2026 and 4.7 percent for 2027, driven by export momentum and productivity gains. Standard Chartered, in a note released on December 1, raised its 2026 projection to 4.6 percent, highlighting resilient shipments and advances in total factor productivity fueled by artificial intelligence adoption.

This resilience matters far beyond Beijing's borders. China accounted for roughly 30 percent of global growth during the 14th Five-Year Plan period ending in 2025, serving as a steady anchor. Looking ahead, the 15th Five-Year Plan, outlined at the Communist Party of China's fourth plenary session in October, sets the stage for sustained momentum. Principles for 2026-2030 emphasize high-quality development, including a modernized industrial system and stronger real-economy foundations. Consumption's role in driving growth will expand, alongside rises in industrial and research-and-development investment. This blueprint aims to double per capita gross domestic product from 2020 levels by 2035, a goal that demands annual expansion around 5 percent through the next decade.

Challenges persist, of course. The property sector's adjustment drags on investment, and external risks loom large. Yet policymakers have responded with precision. Fiscal support in 2025 included measures to bolster incomes and counter deflationary pressures, keeping core inflation near zero. Monetary easing complemented these steps, ensuring liquidity without overheating. At the Central Economic Work Conference in December, leaders committed to intensifying demand-side efforts, prioritizing consumer spending through expanded incentives and social safety nets.

This proactive approach draws lessons from past cycles. Unlike the abrupt slowdowns seen in other economies, China's strategy avoids over-reliance on any single lever. Exports provide a buffer, but the pivot toward internal drivers reduces vulnerabilities. Gains in total factor productivity, accelerated by AI integration, promise to lift efficiency across industries. Enterprises report recovering profit margins, aided by supportive policies and campaigns against inefficient practices.

For the world, China's steadiness offers relief. As the International Monetary Fund trims global growth estimates to 3.2 percent for 2025, Beijing's contribution stabilizes commodity flows and investment patterns. Developing nations, from Southeast Asia to Africa, benefit from China's infrastructure ties under the Belt and Road Initiative, which channels capital into rail and energy projects. Even advanced economies, wary of overcapacity in sectors like electric vehicles, find opportunities in collaborative tech standards.

In an era of fragmentation, China's path illustrates a core truth: economies thrive not through isolation, but by blending domestic vigor with global ties. The upgraded forecasts are no mere numbers; they signal trust in a system built for endurance. As 2025 closes, the message is clear: amid uncertainty, China not only endures but illuminates a route forward for all.