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. In addition, since the first 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 18,765 billion in 2024.
Nominal GDP of USD 18,765 billion in 2024.
Nominal GDP of USD 18,765 billion in 2024.
GDP per capita of USD 13,317 compared to the global average of USD 10,589.
GDP per capita of USD 13,317 compared to the global average of USD 10,589.
GDP per capita of USD 13,324 compared to the global average of USD 10,589.
Average real GDP growth of 5.9% over the last decade.
Average real GDP growth of 5.9% over the last decade.
Average real GDP growth of 5.9% over the last decade.
Sector Analysis
In 2022, services accounted for 54.6% of overall GDP, manufacturing 26.2%, other industrial activity 12.1%, and agriculture 7.1%. Looking at GDP by expenditure, private consumption accounted for 37.4% of GDP in 2022, government consumption 16.1%, fixed investment 43.1%, and net exports 3.4%.International trade
In 2023, manufactured products made up 91.9% of total merchandise exports, mineral fuels 1.8%, food 2.5%, ores and metals 1.3% and agricultural raw materials 0.4%, with other categories accounting for 2.1% of the total. In the same period, manufactured products made up 48.6% of total merchandise imports, mineral fuels 21.0%, food 9.0%, ores and metals 14.6% and agricultural raw materials 2.6%, with other goods accounting for 4.2% of the total. Total exports were worth USD 3,576.60 billion in 2024, while total imports were USD 2,584.70 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 5.9% in the decade to 2024. 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 averaged 3.8% of GDP in the decade to 2023. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 5.2% in the decade to 2024. 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
Inflation averaged 1.6% in the decade to 2024. 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 monetary policy rate ended 2024 at 3.10%, down from 5.51% a decade earlier. 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
From end-2014 to end-2024 the yuan weakened by 15.1% vs the U.S. dollar.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 5.4% year-on-year GDP growth in Q1, the economy is likely slowing in Q2 but remains robust in the face of higher U.S. tariffs. Key reasons for this resilience are record government bond issuance, the front-loading of exports, trade diversion via third countries to escape U.S. tariffs and a broadened trade-in program aiding consumer goods purchases. Looking at available data, industrial production and goods exports growth easily outpaced market expectations in April, while retail sales undershot forecasts in the same month but were solid nonetheless. However, the housing market remains stuck in a protracted downturn against a backdrop of falling prices, sales and building activity. In May, the U.S. rolled back “reciprocal” tariffs on Chinese imports to 10% from 125% for three months, which could spur further export front-loading in the remainder of Q2.China Economic Forecasts
Projections out to 2034.53 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 59 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 59 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.