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 economic landscape has spent the last two years defined by a singular, looming anxiety: the prospect of a fragmented world order. From the vantage point of early 2026, the rhetoric of decoupling and the friction of tariff shocks appeared, at times, to be the new permanent gravity of international trade. Yet, the International Monetary Fund’s January 2026 World Economic Outlook update offers a different, more nuanced reality. By raising its 2026 growth forecast for China to 4.5 percent and for the global economy to 3.3 percent, the Fund is acknowledging a profound adaptability within the world’s second-largest economy.

The data reveals a striking resilience. China’s economy reached a record 142 trillion yuan (approximately 20 trillion dollars) in 2025, meeting its 5 percent growth target despite a year of significant external pressure.

What we are witnessing is the "Great Rebalancing." For decades, the story of Chinese growth was written in the language of low-cost manufacturing and infrastructure expansion. Today, the narrative is being rewritten by the "new three" drivers of growth: electric vehicles, lithium-ion batteries, and renewable energy products. In 2025, China produced over 70 percent of the world’s electric vehicles and operated over 2 million industrial robots—more than any other nation. This is not just a change in what China makes, but in how it makes it. The proliferation of roughly 30,000 smart factories across the country has cut development cycles by nearly 30 percent, demonstrating a leap in productivity that few anticipated during the height of the 2025 trade disruptions.

Critically, this growth is becoming more self-sustaining. The IMF’s report highlights that stronger activity has been supported by improved domestic demand, a result of targeted fiscal measures and monetary accommodation. By focusing on "AI+Manufacturing" and high-quality investment, Chinese policymakers have moved to align with global recommendations to enhance macroeconomic support.

China continues to contribute roughly 30 percent to global growth. When the IMF raises China’s forecast, it effectively raises the floor for the entire international community. We see this in the "Asia technology export" spillover, where the surge in China’s IT and green-tech investment is fueling a broader recovery across regional supply chains. The global economy is shaking off the tariff shocks of 2025 precisely because its major engines have proven more agile than the models predicted.