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.

 

China's economy has kicked off 2025 with robust momentum. Official data released on March 17 reveals that industrial output, fixed-asset investment, and retail sales all expanded at a faster pace than in the previous year, underscoring the resilience of the world’s second-largest economy. 

 

In the first two months of 2025, the value-added output of major industrial enterprises grew by 5.9 percent year-on-year, slightly higher than the full-year growth rate of 2024. Fixed-asset investment rose by 4.1 percent, reaching 5.26 trillion yuan (approximately $734 billion), an acceleration of 0.9 percentage points from last year’s pace. Infrastructure investment saw an increase of 5.6 percent, while manufacturing investment expanded by an impressive 9 percent. 

 

These figures suggest that a combination of existing and newly introduced policies has been instrumental in sustaining economic momentum. The Chinese government has rolled out a series of pro-growth measures to stimulate domestic demand, support industrial expansion, and ensure labor market stability. 

 

The annual "Two Sessions" of China's top legislative and political advisory bodies recently set a GDP growth target of around 5 percent for 2025. The macroeconomic policies unveiled at the meetings have been described as "more specific, pragmatic, and timely," with fiscal spending projected to reach 11.86 trillion yuan this year. This commitment to expansionary fiscal policy reflects Beijing’s determination to maintain stability amid global uncertainties, including sluggish external demand and geopolitical tensions that continue to weigh on international trade flows. Several structural factors have contributed to China’s strong economic performance in early 2025. 

 

First, the country’s massive industrial base continues to support manufacturing and technological advancements. China's push for self-sufficiency in critical industries, including semiconductors and green energy, has led to increased domestic investment in high-tech manufacturing and research and development. This shift is not only boosting industrial output but also positioning China as a leader in future-oriented industries such as electric vehicles and renewable energy technologies. 

 

Second, China's vast consumer market provides enormous room for retail and service sector expansion. As the middle class continues to grow, there is increasing demand for premium goods, healthcare services, and digital entertainment. The rise of new consumer trends, including sustainable products and smart home technology, further fuels market activity. Additionally, a burgeoning domestic tourism sector is playing a pivotal role in strengthening consumption, as more Chinese consumers opt for local travel experiences rather than international trips. 

 

Third, ongoing reforms and the gradual opening of various industries to foreign investment are injecting new vitality into the economy. Beijing has been making a concerted effort to improve the business climate, offering tax incentives, reducing bureaucratic hurdles, and expanding market access for foreign firms. These measures have not only attracted international capital but also encouraged domestic enterprises to enhance efficiency and innovation, making China a more competitive player in global markets.

 

Despite global headwinds, China’s economic outlook remains positive. Policymakers are balancing short-term stimulus measures with long-term structural reforms aimed at reducing reliance on debt-fueled growth and fostering high-quality development. One of the key pillars of this strategy is the continued expansion of China’s digital economy, which is emerging as a major growth driver. From AI-driven automation in factories to the rapid expansion of fintech services, China’s embrace of digital transformation is enabling new levels of efficiency and productivity across multiple sectors. 

 

Additionally, China's ambitious infrastructure projects, both domestically and abroad, continue to support economic activity. The Belt and Road Initiative (BRI) remains a cornerstone of China’s global economic strategy, creating new trade routes and investment opportunities while also strengthening geopolitical ties. Domestically, large-scale investments in high-speed rail, smart cities, and green energy infrastructure are laying the foundation for long-term growth and sustainability.