Opinion

Expanding domestic demand and opening up do not contradict each other

To promote high-quality development amid rising external uncertainties, it is essential to correctly understand and handle the relationship between expanding domestic demand and opening up, so as to address risks and challenges, and ensure a strong start to the 15th Five-Year Plan.

Domestic demand serves as the fundamental driver of China’s economic development. The expansion of domestic demand is set to top China’s major economic priorities this year, according to the recent Central Economic Work Conference, highlighting “domestic demand will remain as a focus in building a robust domestic market”. Opening up, on the other hand, is a vital engine for economic growth. For many years, advancing reform and high-level opening up has been a valuable experience in China’s modernization drive and will continue to be a strong pillar for Chinese modernization in the future.

Expanding domestic demand and opening up do not contradict each other, rather, they mutually reinforce and complement each other. As an organic unity, they jointly constitute a dual-driver mechanism for sustained and healthy economic development. Correctly managing the relationship between expanding domestic demand and opening up requires achieving a higher-level dynamic balance where demand drives supply and supply, in turn, creates demand. In expanding domestic demand, it is important to adhere to the direction of market-oriented reforms, break down industry monopolies and local protectionism, so that domestic demand expansion will be based on efficiency improvement and innovation-driven approaches. In expanding opening up, it is essential to balance development and security for a sustained and steady economic growth.

Policy

1. China started to apply provisional import tariff rates lower than the most-favored-nation rates on 935 items starting from Jan 1, 2026, the Customs Tariff Commission of the State Council announced.

2. An implementation plan for digital transformation in the automotive industry was recently issued by the Ministry of Industry and Information Technology and other three departments, aiming to guide the in-depth application of industrial internet. It encourages the construction of 5G factories in the automotive sector and promotes typical application scenarios of “5G + industrial internet.”

Data

1. China’s State-owned and State-controlled enterprises demonstrated generally stable performance in the first 11 months of 2025, according to the Ministry of Finance. These enterprises collectively generated operating revenues totaling RMB 75.63 trillion during the January-November period, reflecting a 1 percent year-on-year increase.

2. According to the National Bureau of Statistics, from January to November 2025, China’s major industrial enterprises achieved a total profit of RMB 6.63 trillion, a year-on-year increase of 0.1 percent, and operating revenue of RMB 125.34 trillion, a year-on-year increase of 1.6 percent. The cumulative growth rate of industrial enterprise profits has maintained an increase for four consecutive months since August 2025.

3. Data from the Ministry of Industry and Information Technology showed that in 2025, China’s digital industry revenue increased by about 9 percent year-on-year. As information and communications industry plays an increasingly important role in driving economic and social development, total telecommunications business volume and software business revenue have grown by about 9 percent and 12 percent year-on-year, respectively.

4. As of the morning of December 28, 2025, the total box office for China’s 2025 New Year holiday film season had exceeded RMB 5 billion, setting a new eight-year high for the same period.

5. In 2025, the cargo throughput at ports along the mainline of the Yangtze River exceeded 4.2 billion metric tons, and the traffic volume through the Three Gorges reached 170 million metric tons, representing year-on-year increases of 4.8 percent and 8.7 percent, respectively.

6. China has made notable progress in the conservation of forestry and grassland germplasm resources during the 14th Five-Year Plan period (2021-2025), the National Forestry and Grassland Administration said. Over the past five years, China has collected around 147,400 forestry and grassland germplasm samples, representing a 180 percent increase compared with the level recorded at the end of 2020.

7. Data from the National Healthcare Security Administration showed that from January to November in 2025, the total revenue of China’s basic medical insurance (including maternity insurance) reached about RMB 2.63 trillion, while cumulative fund expenditures reached about RMB 2.11 trillion, indicating stable overall operation of the basic medical insurance funds.

8. According to statistics from Horgos Customs, from January to November in 2025, the trade volume through Horgos Port in Xinjiang Uygur Autonomous Region reached 42.443 million metric tons, a year-on-year increase of 1.4 percent. Among this, 396,000 vehicles were exported through the port, a year-on-year increase of 4.6 percent .

9. According to the China Federation of Logistics & Purchasing, from January to November in 2025 the total value of social logistics in China reached RMB 331.2 trillion, representing a year-on-year increase of 5.0 percent based on comparable prices.

10.The China National Offshore Oil Corporation announced that its offshore gas field cluster surrounding Hainan Island had extracted a cumulative oil and gas equivalent output surpassing 10 million metric tons in 2025, setting a historical record and achieving a doubling of output compared to the end of 2020.