China Eyes Rapid Growth Amid Shift to Consumer-Driven Economy

Chinese Premier Li Qiang expressed confidence in maintaining “relatively rapid” economic growth as China shifts from a manufacturing-based model to a consumption-driven economy. Speaking at the World Economic Forum in Tianjin, Li underscored China's strong momentum despite global headwinds and ongoing U.S. trade tensions.

The transition comes as Beijing attempts to balance near-term growth with long-term structural reforms. China’s $19 trillion economy faces a crossroads: continue with export-led growth, which is increasingly under threat due to escalating trade friction, or pivot toward sustainable domestic consumption, which promises long-term gains but involves short-term sacrifices.

Li stated, “Regardless of how the international environment evolves, China’s economy has consistently maintained a strong momentum for growth.” He emphasized steady improvement in Q2 and reiterated China's ambitious 2025 GDP target of around 5%. However, many analysts, including those at Oxford Economics, project slower growth ahead, estimating an average of 4.5% this decade and down to 3% by the 2030s.

The International Monetary Fund has urged Beijing to adopt deeper reforms—particularly in pensions and social welfare—to ease the shift toward consumer-led growth. Economists argue that more direct policy support for households could accelerate this transition, but political sensitivities remain. High growth has long been a pillar of the Communist Party’s legitimacy, making structural change a cautious endeavor.

Li concluded by highlighting the global opportunities of this pivot: “We aim to help China transition from a major manufacturing power to a colossal consumer market. This will open up vast and untapped markets for businesses from many countries.”

The success of China’s economic transformation will depend on whether it can harmonize growth, reform, and social stability in an increasingly volatile global landscape.