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BEIJING, Jun 27 (APP): China’s economy continues to show robust resilience, powered by dynamic domestic consumption and a fast-evolving innovation ecosystem, according to global executives and economists attending the World Economic Forum this week in Tianjin.
Joseph Luc Ngai, Chairman of McKinsey Greater China, noted that multinational companies looking for diversification still find China central to their strategies. “When companies talk about Plan B, China still ends up being a big part of that plan,” he said.
A recent McKinsey survey released this month confirms a stabilizing consumer confidence in China. Rural consumers, in particular, are increasingly optimistic, supported by policies aimed at rural revitalization and faster income growth, CEN reported.
“Consumers are not trading down—they’re becoming savvier,” Ngai emphasized. “They’re seeking the same quality at a better price, benefiting from China’s highly competitive marketplace, which offers a broad range of quality substitutes and raises the overall standard of living.”
China’s retail sales of consumer goods rose 6.4% year-on-year in May, marking the fastest pace since December 2023. Young consumers are leading a shift toward experience-driven spending, embracing work-life balance and contributing to economic dynamism in second- and third-tier cities. This is creating endogenous momentum, especially in high-end manufacturing and localized services.
The evolving consumer mindset reflects a deeper change: increasing emphasis on personal achievement. Chinese buyers are gravitating toward products and services that align with self-improvement and lifestyle enrichment, from fitness to education and digital tools, according to the McKinsey report.
China is also emerging as a global leader in future-defining industries.
McKinsey has identified 18 arenas expected to generate between $29 trillion and $48 trillion in global revenue by 2040. “China is positioned to thrive in high-growth arenas,” Ngai wrote in his article published on World Economic Forum website this week, listing artificial intelligence, electric vehicles, and robotics as examples.
“In AI-enabled services, China’s established internet and ecommerce companies such as Alibaba and Baidu are integrating generative AI into applications like personalized education, short video creation and enterprise software, while newer players such as DeepSeek have made breakthroughs in large-scale AI models. China’s advancements in EVs, batteries and robotics provides a strong foundation for future growth in the arenas of tomorrow. In robotics, service robots are contributing significantly to supporting logistics and e-commerce. These examples underscore China’s ability to lead in emerging arenas, leveraging its scale, innovation ecosystem and technological expertise,” he wrote.
As of this year, China boasts more than 4,200 maker spaces, 3,200 business incubators, and over 4,000 accelerators, according to McKinsey, reflecting a thriving grassroots innovation culture.
Karim Dahou, Head of the China Unit at the OECD, highlighted three key pillars underpinning China’s sustained development: open trade policies, world-class infrastructure, and exceptional education. “Two-thirds of international trade now involves intermediate goods. China’s openness to importing quality inputs is crucial for its industrial competitiveness,” he explained. “And its eastern regions—Beijing, Shanghai, Jiangsu—rank among the best in global education systems. If you take a company like BYD for instance, they have a bit more than 1 million workers, and more than 10% are engineers. That’s foundational for sustaining growth.”
When industries excel, it naturally becomes a magnet for global businesses.
Elisabeth Denner, Partner and Global Head of Markets at BearingPoint, a consulting firm, described China as “one of the most promising and predictable markets.” According to the Innovation Report 2024 compiled by the German Chamber of Commerce in China and the consultancy, nearly 63% of German companies in China are conducting product R&D locally—a strong indication of confidence in China’s innovation ecosystem.
Ilham Kadri, CEO of chemical enterprise Syensqo, highlighted China’s dominance in the sector. “Half of the world’s chemical output comes from China today. By 2030, that will be two-thirds. With an innovation-led economy, China is becoming a global champion in our industry.”
Stephen Kehoe, Executive Vice President of PepsiCo, the world’s second-largest food and beverage company, sees China not only as a vast consumer market but also as a base for long-term brand development. “This is a large, sustainable market in itself, with a high consumer base. The scale allows us to grow a business in China for China,” he said. “The ability to connect authentically with consumers makes China unique.”