Innovative, Objective, Practical
Date: July 20, 2025
In the first half of 2025, China faced growing external turbulence alongside interwoven domestic challenges. Despite these pressures, the economy demonstrated overall stability and continued progress in high-quality development. Tariff tensions eased following May’s negotiations in Switzerland, reducing potential impacts on export sectors. Coupled with domestic policy support, economic activity showed signs of recovery, though challenges persisted. Moving forward, policy implementation acceleration is needed to enhance multiplier effects, while domestic demand to be expanded by leveraging people’s aspirations for a better life.
The Economy Operated with Overall Stability.
In H1 2025, GDP grew 5.3% y/y at constant prices, 5.4% in Q1 and 5.2% in Q2. Value-added output rose across primary, secondary, and tertiary industries in Q2. Service industry remained a key growth engine, expanding 5.5% y/y in H1, with information transmission, software, and IT services leading at 11.1% growth. June’s Manufacturing Production Index and New Orders Index both increased m/m, signaling accelerated output and improved demand.
Tariff Tensions Disrupted Export Trends.
H1 goods exports rose 7.2% y/y in RMB terms, up 0.3 pp from Q1 and exceeding 2024’s performance, mostly due to 2024’s low base and tariff war effects. Following May’s Sino-U.S. tariff reductions, the y/y decline in U.S.-bound exports narrowed from -34.5% in May to -16.1% in June. Meanwhile, China maintained robust export growth to re-export hubs in June. Exports to ASEAN and Hong Kong SAR accelerated m/m. With pent-up U.S. orders fulfilled and given increased scrutiny of re-exports in U.S. trade agreements, future exports could face pressure.
Industrial Output Growth Accelerated Y/Y.
H1 industrial value-added for enterprises above the designated size rose 6.4% y/y, 0.6 pp higher than full-year 2024. Q1 and Q2 saw 6.5% and 6.3% growth respectively. Key drivers included: expanded large-scale equipment upgrade and consumer goods trade-in programs releasing domestic demand; and digital, smart and green transition in industrial development, notably digital product manufacturing went up 9.9% y/y, outpacing industrial averages for 23 straight months.
Investment Growth Decelerated Y/Y.
H1 fixed-asset investment grew 2.8% y/y, down 0.9 pp Jan–May. By sector, infrastructure went up 4.6% y/y (down 1.0 pp Jan–May), manufacturing up 7.5% y/y (down 1.0 pp Jan–May), real estate down 11.2% y/y (down 0.5 pp Jan–May) reflecting persistent stabilization pressures. While large-scale equipment upgrade and consumer goods trade-in programs continued to drive strong growth in high-end, smart, and green manufacturing, investment growth slowed post-acceleration across all three sectors.
Trade-in Policy Accelerates Consumption.
Driven by a series of policies aimed at promoting consumption, domestic demand continued to increase. H1 retail sales rose 5.0% y/y, up 0.4 pp from Q1 and continuing quarterly acceleration since Q3 2024. June sales grew 4.8% y/y, down 1.6 pp m/m. The implementation and optimization of consumer goods trade-in program boosted goods and services consumption, demonstrating strong momentum. H1 service retail picked up pace and rose 5.3% y/y, up 0.3 pp compared to Q1. Policy sustainability and consumption impacts warrant monitoring.
Pushing Prices Toward Higher Levels.
H1 CPI averaged -0.1% y/y, unchanged from Q1. Monthly volatility stemmed from Chinese New Year timing seen in CPI increased 0.5% in January, then decreased 0.7% in February. March–May CPI decline narrowed to -0.1%, before turning positive in June (up 0.1% y/y) due to international commodity price fluctuations and domestic consumer demand stimulus policies. The narrowing decline in food prices and the expanding growth in service prices are the main contributors to Q2’s improvement. H1 PPI fell 2.8% y/y, continuing its downward trend pressured by seasonal drops in prices across certain domestic raw material manufacturing industries, lower energy prices driven by increased solar, wind and hydropower generation, and price pressures faced by some export-led sectors.
Image source: IE Insights (2022). https://www.ie.edu/insights/articles/our-urban-life-in-2022/
Date: March 20, 2025
Following the Spring Festival, economy regained momentum in February as businesses resumed operations, accelerating production and commercial activity. Key indicators such as the Manufacturing Purchasing Managers’ Index (PMI), Non-Manufacturing Business Activity Index, and Composite PMI Output Index all rebounded month-on-month, remaining in expansionary territory. While these figures signal a tentative recovery from earlier lows, sustaining growth will demand stronger policy reinforcement and expedited implementation.
Economic Recovery Shows Marginal Improvement from Low Levels
In February, the Composite PMI Output Index rose by 1.0 percentage points from the previous month to 51.1%, returning to expansion territory. The Manufacturing PMI, up 1.1 percentage points to 50.2%, emerged as the primary growth driver. A breakdown of the index shows that both production and demand within the manufacturing sector improved, with the Production Index and New Orders Index rising by 2.7 and 1.9 percentage points, respectively, to 52.5% and 51.1%. Both indices entered expansion territory, indicating a notable improvement in manufacturing supply and demand. This resurgence bolstered corporate confidence, pushing the Purchasing Volume Index up by 2.9 percentage points to 52.1%. On the non-manufacturing side, the Non-Manufacturing Business Activity Index edged up 0.2 percentage points to 50.4% in February.
Export Disruptions Due to Tariffs and "Front-Loading"
From January to February, Merchandise exports grew 3.4% year-on-year, though this was a slight moderation compared to full-year 2024 and December figures. Trade with the U.S. expanded at a slower pace, with exports rising 2.9% year-on-year—5.1 percentage points lower than in December 2024—partly reflecting adjustments to U.S. tariff hikes. Meanwhile, shipments of products that retain a competitive edge under current tariff conditions, such as smartphones and laptops, saw a boost, possibly as exporters sought to stay ahead of potential U.S. trade restrictions. However, taking into account two fewer working days in January-February 2025 compared to the same period in 2024, the year-on-year export growth rate would have been higher if measured on a per-working-day basis.
New Growth Drivers Accelerate Industrial Expansion
Industrial output from large-scale enterprises grew 5.9% year-on-year in January-February, extending the robust momentum seen since Q4 2024. The pace edged up 0.2 and 0.1 percentage points from the fourth quarter and full year of 2024, respectively. Externally, export momentum sustained industrial expansion, with export delivery values rising 6.2% year-on-year—1.1 percentage points faster than 2024’s annual rate. Domestically, policies such as large-scale equipment upgrades and consumer trade-in programs, expanded in 2025, spurred industrial modernization and unlocked consumption potential, further driving growth. On the supply side, equipment manufacturing and high-tech industries led the charge, with rapid growth continuing to optimize the industrial structure.
"Two Major" Projects Fuel Investment Growth
In January and February, investment increased by 4.1% year-on-year, up by 0.9 percentage points compared to the whole of last year. First, support for "Two Major" projects (advancing national strategic initiatives and enhancing key security capabilities) has strengthened, with physical work volumes picking up, driving a faster growth in infrastructure investment. Infrastructure investment rose by 5.6% year-on-year in January and February, accelerating by 1.2 percentage points from 2024, contributing 1.1 percentage points to overall investment growth. The "Two New" policies (promoting large-scale equipment upgrades and consumer goods trade-ins) have been further expanded, with their effects becoming increasingly evident, spurring rapid growth in equipment investment. Second, progress in the high-quality development of key industrial chains is solid, with the transformation of traditional industries accelerating, leading to strong growth in manufacturing investment. Third, real estate policies have mitigated the decline in investment, showing early signs of stabilization.
Trade-In Programs and Green Consumption Boost Retail Sales
In January and February, retail sales grew by 4.0% year-on-year, with goods retail increasing by 3.9% and catering revenue rising by 4.3%. The growth in consumer spending was driven by the expansion of trade-in policies, which quickly unlocked demand for appliances and electronics. Meanwhile, the increasing focus on green and health-conscious products fueled strong growth in the eco-friendly and wellness sectors. Additionally, a surge in travel and leisure activities led to a rapid increase in spending on transportation, accommodation, and related services, highlighting a broader recovery in consumption.
Efforts Needed to Stimulate a Balanced Price Recovery
In February, China’s Consumer Price Index (CPI) fell 0.2% month-on-month and 0.7% year-on-year, reflecting the combined impact of Chinese New Year timing, holiday effects, and volatile global commodity prices. The year-on-year decline was primarily driven by a high base effect: food and service prices surged during February 2024’s holiday period, inflating the comparison base and putting downward pressure on this year’s figure. Food prices dropped 3.3% year-on-year, accounting for over 80% of the CPI decline (contributing 0.6 percentage points to the total 0.7% drop). This sharp contraction in food costs—the largest drag on prices—tipped the CPI into deflationary territory. Meanwhile, the Producer Price Index (PPI) continued to decline due to seasonal industrial sluggishness and softer global commodity prices. However, both month-on-month and year-on-year PPI decreases narrowed by 0.1 percentage points, signaling easing deflationary pressures.
Date: Feb 20, 2025
In January, due to the Spring Festival holiday and seasonal factors, industrial production entered an off-season, with the Producer Price Index (PPI) declining month-on-month. However, service and food prices rose significantly affected by the timing of the holiday, along with a rebound in gasoline prices, collectively driving an expansion in the Consumer Price Index (CPI) year-on-year growth. Overall, despite signs of moderation, economic activity remains on a positive trajectory, underscoring the need to expedite the implementation of supportive measures
Economic Growth Moderates, but Certain Sectors Gain Momentum
In January, the Composite Purchasing Managers’ Index fell by 2.1 percentage points month-on-month to 50.1%, reflecting impacts from the Spring Festival holiday and the return of employees to their hometowns. This indicates a broad-based slowdown, though overall economic expansion persists. Driven by the Spring Festival effect, sectors related to residents' travel and consumption—such as road transportation, accommodation, catering, ecological protection, and public facility management—saw their Business Activity Indexes rebound into expansionary territory, signaling greater market vitality. Meanwhile, sectors including air transport, postal services, telecommunications, broadcasting, satellite transmission, and monetary financial services maintained robust Business Activity Indexes above 55.0%, sustaining rapid growth in output.
Surge in Aggregate Social Financing
In January, total social financing increased by 7.06 trillion yuan, up by 586.6 billion yuan compared to the same period last year. Financial institutions issued 5.13 trillion yuan in new RMB loans (including loans to non-bank financial institutions), a year-on-year increase of 210 billion yuan. Structurally, the surge was driven by government bonds and corporate financing, while household borrowing remained weak. Corporate financing hit record highs, with medium- and long-term loans growing further despite a high base. The demand for household short-term loans remained low, likely due to the timing of the Spring Festival. Additionally, the reduced demand for business loans to refinance existing mortgages, following cuts in mortgage rates, weighed on medium- to long-term business loans.
Property Market Prices See Divergent Trends
In January, housing prices in first-tier cities continued to rise month-on-month, whereas second- and third-tier cities saw slight declines, reflecting a clear divergence in trends. Specifically, new home prices in first-tier cities increased by 0.1% month-on-month, though the rate of growth slowed by 0.1 percentage point compared to December. In second-tier cities, new home prices rose by 0.1%, marking the first increase since June 2023, while third-tier cities saw a 0.2% decline. For existing homes, first-tier prices edged up by 0.1%, a 0.2 percentage point slowdown from December, second-tier prices dropped by 0.3%, and third-tier prices fell by 0.4%. Year-on-year, price declines narrowed across all city tiers, suggesting gradual stabilization.
Core Consumption Recovery Emerges as Economic Stabilizer
In January, industrial production remained subdued due to the holiday, with the PPI falling by 0.2% month-on-month and 2.3% year-on-year—unchanged from the previous month's annual decline. Prices in non-ferrous metal mining and processing saw significant increases, while ferrous metal smelting, coal mining, and related industries accounted for nearly 90% of the PPI’s annual decline, contributing 2.11 percentage points. The CPI, however, expanded year-on-year, fueled by holiday-driven service and food price surges along with higher gasoline prices. Notably, the core CPI (excluding food and energy) rose for the fourth consecutive month, climbing 0.5% month-on-month and 0.6% year-on-year, with both growth rates accelerating from December.
Date: Jan 20, 2025
Despite external pressures and domestic challenges, China's economy exhibited stability and steady progress in 2024. Targeted incremental policies boosted confidence and facilitated a strong recovery. Export growth decelerated in the first three quarters owing to diminished global demand, although industrial supply chains remained resilient. In Q4, an increase in "front-loading exports" stimulated manufacturing growth, whereas large-scale equipment upgrades and consumer goods trade-in programs maintained ongoing demand and investment in manufacturing. Existing policies, together with new stimulus measures, have spurred local infrastructure investment, though further improvements are required. The recovery in the real estate sector remains sluggish, and its economic contribution has not yet improved.
Overall Economic Stability with Continued Growth.
In 2024, China’s GDP increased by 5.0% at constant prices, with quarterly growth rates of 5.3% in Q1, 4.7% in Q2, 4.6% in Q3, and 5.4% in Q4, indicating a stable upward trend. From Q4 onwards, sustained policy impacts significantly enhanced market expectations and confidence, resulting in positive shifts in both the capital and real estate markets. The service sector grew by 5.8% year-on-year in Q4, an increase of 1.0 percentage point from Q3. The stock market surged, with trading volumes in the Shanghai and Shenzhen markets rising by 126.4% and 124.4% year-on-year respectively, significantly outperforming the first three quarters.
Exports See Consistent Growth.
In 2024, China’s goods exports increased by 7.1%, indicating a rise of 6.5 percentage points from the previous year, significantly contributing to economic growth. In Q4, "front-loading exports" surged, and strong consumption demand in Europe and the U.S. stimulated a resurgence in export growth. In December, exports rose 10.9% year-on-year, representing an increase of 4.0 percentage points from the previous month. The U.S. remained the primary driver of growth, whereas exports to ASEAN increased by 18.9%. Products sensitive to U.S. tariffs, such as automobiles, machinery, auto parts, and textile yarns, saw notable growth. Furthermore, Chinese industrial goods gained global competitiveness, further accelerating export growth.
Manufacturing Fuels Industry Resilience.
In 2024, China’s large-scale industrial enterprises exhibited stable growth, with value-added industrial output rising by 5.8% year-on-year, reflecting a 1.2 percentage point acceleration from the previous year. Manufacturing played a central role, rising by 6.1%, whereas mining and utilities grew by 3.1% and 5.3%, respectively. Policy support continued to advance the manufacturing sector toward higher-end development, with equipment manufacturing increasing by 7.7% and high-tech manufacturing by 8.9%, both exceeding overall industrial growth.
Investment Growth Accelerates with Policy Support.
Fixed asset investment increased by 3.2% in 2024, up 0.2 percentage points over the previous year. Backed by ultra-long-term special government bonds and local government special bonds, major infrastructure projects advanced rapidly, boosting infrastructure investment by 4.4%. Manufacturing investment increased by 9.2%, indicating the sector’s shift toward high-end and advanced industries. Investment in high-tech manufacturing and services grew by 7.0% and 10.2%, respectively. In Q4, targeted policy measures contributed to the stabilization of the real estate market, easing the decline in new home sales and driving the growth in the real estate production index for three consecutive months.
Consumption Growth Requires Further Stimulus.
In 2024, retail sales of consumer goods increased by 3.5%, accelerating in Q3 and Q4, but still below the previous year’s pace. Retail sales of goods rose by 3.2%, whereas dining revenue increased by 5.3%, both below the previous year’s growth rates. Sales at large brick-and-mortar retailers rose by 1.9%, with new retail formats performing well. Policies promoting trade-ins for consumer goods resulted in stronger sales in key categories, including home appliances and audiovisual equipment, which maintained double-digit growth for four consecutive months. Auto and furniture sales returned to positive growth, whereas demand for construction and home improvement materials showed signs of recovery.
Stabilizing Prices and Easing Declines.
In 2024, the Producer Price Index (PPI) decreased by 2.2% year-on-year, narrowing its decline by 0.8 percentage points compared to the previous year. From January to July, the PPI decreased from -2.5% in January to -0.8% in July, driven by rising international crude oil and non-ferrous metal prices, a recovering domestic production sector, and a low base effect. However, in August, a dip in global commodity prices led to a 0.7% month-on-month loss, widening its year-on-year decline. Since September, the impact of policy measures and recovering industrial demand has slowed the PPI's monthly decline, with the index turning positive in November and the year-on-year decrease steadily shrinking.
Date: December 20, 2024
In November, the combined effects of macroeconomic policies became more evident. The acceleration of export growth boosted industrial chains, while policies promoting large-scale equipment upgrades and consumer goods trade-ins bolstered manufacturing demand and investment. Infrastructure investment, though slightly decelerating, demonstrated resilience due to the effective execution of existing policies and the accelerated implementation of new measures. Concurrently, strengthened real estate support policies increased transaction volumes; nonetheless, achieving full stabilization requires further recovery in income expectations on the demand side. On the whole, macroeconomic policies are yielding tangible benefits, with key sectors exhibiting promising signs of recovery.
Economic Expansion Gains Further Momentum
In November, the Composite PMI Output Index remained steady at 50.8%, indicating sustained economic growth. The Manufacturing PMI increased to 50.3%, with the Production Index and New Orders Index rising to 52.4% and 50.8%, respectively. Notably, new orders returned to growth for the first time since May, indicating increased demand and market activity. However, the non-manufacturing sector saw mounting pressure as the Business Activity Index dipped to 50.0%. Service output growth moderated slightly to 6.1% year-on-year, down 0.2 percentage points from October.
Exports Remain Stable Amid Fluctuations
From January to November, goods exports increased by 6.7% year-on-year, aligning with the January–October growth rate, indicating strong overall resilience. While November's growth rate decreased by 6 percentage points to 6.7%, it remained among the highest levels this year. Key drivers were front-loading effects and sustained strong demand from the U.S. and ASEAN markets, with U.S. exports surpassing those to Europe. Holiday demand for toys and communication equipment notably enhanced U.S. export growth. However, the EU’s tariffs on electric vehicles tempered gains in the automotive supply chain.
Manufacturing Drives Steady Industrial Growth
From January to November, large-scale industrial output increased 5.8% year-on-year, with November seeing an acceleration of 5.4%. Manufacturing increased by 6.0%, marking its third consecutive month of growth and solidifying its position as the primary driver. Conversely, mining and utilities experienced a slight slowdown from the previous month. Policies promoting new technologies and emerging industries stimulated rapid growth in shipbuilding, smart consumer devices, and lithium battery production. Incentives for new energy vehicles and home appliance upgrades further boosted output. In November, export delivery value increased 7.4% year-on-year, representing the highest monthly growth since August 2022 and providing a strong boost to industrial chains.
Investment Growth Eases Slightly Despite Policy Support
Investment increased 3.3% year-on-year from January to November, with monthly growth decelerating to 2.4% in November. Infrastructure investment slightly decelerated to 4.2%, whereas manufacturing investment maintained a strong pace of 9.3%. Real estate investment declined further to -11.5%, but property sales recorded positive monthly growth for the first time since April 2023, increasing developers' funding sources. Transportation and storage investment declined sharply, whereas gains in power and water infrastructure provided significant support.
Multiple Measures to Bolster and Sustain Consumption Growth
Consumption continued to recover steadily as policies such as trade-ins for new products further stimulated consumer demand, resulting in strong sales across most categories. From January to November, retail sales increased 3.5% year-on-year, maintaining the same pace as the previous period. In November, retail sales grew 3.0%, seeing a slight moderation attributed to early "Double 11" promotions and a strong comparison base from last year. Policies promoting product upgrades led to significant growth in auto and furniture sales, which increased by 6.6% and 10.5%, respectively. Construction and renovation materials saw a resurgence, recording a 2.9% increase. Service-related retail sales also sustained a robust upward trend under the influence of various consumption-boosting measures.
Domestic Prices Gradually Return to Stable Levels
In November, coordinated policies boosted industrial recovery, resulting in a shift in the Producer Price Index from decline to slight monthly growth, reducing its year-on-year shrinkage by 0.4 percentage points. Prices in key sectors, including petroleum extraction, chemicals, and electricity, experienced minor reductions. On the Consumer Price Index (CPI) front, food prices dropped 2.7% month-on-month, markedly above the seasonal average decline over the past decade, mainly attributable to abnormal weather that enhanced agricultural production and logistics. This resulted in a month-on-month decrease of 0.6% in the overall CPI. Non-food prices also fell by 0.1%, indicating weaker demand for travel during the off-season. The decrease in food prices contributed to a moderation in the year-on-year CPI increase, which eased to 1.0%.
Date: Nov 20, 2024
In October, the economy experienced a broad-based recovery from the previous month's lows. This improvement was supported by the latest round of macro policies and a favorable shift in export dynamics. Export growth surged due to timing discrepancies, which, in turn, energized the export-linked industries. The push for equipment upgrades and consumer goods trade-ins buoyed manufacturing demand and investment. Infrastructure investment gained momentum as existing policies took effect and new ones accelerated. Real estate saw a lift in transaction volume due to supportive policies, but a sustained recovery will require improving consumer income expectations. To sum up, policymaking is about trade-offs; fiscal expansion is often more effective than monetary expansion in combating economic downturns. It's imperative to swiftly address the bottlenecks in policy implementation and loosen the reins on individuals to boost the economy.
The economy shows a comprehensive improvement from its recent lows. Key economic activity indicators rose in October compared to September. The manufacturing PMI, non-manufacturing business activity index, and the composite PMI output index increased to 50.1%, 50.2%, and 50.8%, respectively, signaling a broad-based economic upturn. All five major sub-indices for the manufacturing sector increased, and the service sector's business activity index ticked up by 0.2 percentage points to 50.1%, propelling the non-manufacturing business activity index higher. Service production surged 6.3% year-on-year, a yearly peak. A stock market trading boom in October drove the financial sector's production index up by 3.7 points to 10.2%, its highest level this year and a key growth driver. This also contributed to a 5.0% year-on-year increase in the national service sector production index for the January–October period.
Shipping schedule shifts spurred faster export growth. The export growth rate for October surged by 9.6 percentage points to 11.2% compared to September. This momentum propelled the year-to-date export growth rate to 6.7% through the month. Bucking the trend of a typical October lull, this year brought a noteworthy 1.8% increase in exports from the previous month, primarily attributed to typhoon disruptions that postponed some of September's exports to October, resulting in an unexpected year-on-year growth. On a country-specific basis, the export growth rates to major destinations rebounded.
Exports and policies keep industrial growth steady. From January to October, the value-added output of industrial enterprises above designated size rose by 5.8% year-on-year, unchanged from the first nine months. The manufacturing and mining sectors saw a pickup in production, while the utilities sector's growth eased to 5.4%. A resurgence in domestic demand improved the sales-to-production ratio, while the value of exports rose by 3.7% year-on-year. Policies on equipment renewal and consumer goods took effect: car production swung from negative to positive, and the output of new energy vehicles reached a record high. Production of charging piles surged by 25.2%, and industries such as smart consumer devices, shipbuilding, and battery manufacturing have shown substantial value-added growth. The production volumes of agricultural processing, excavating machinery, packaging equipment, and home electric heating appliances have all sustained double-digit growth rates.
Policy efforts keep investment growth on an even keel. From January to October, investment climbed 3.4% year-on-year, matching the pace set during the first nine months. The monthly manufacturing investment growth rate hit 9.9% thanks to large-scale equipment renewals, innovation, and industrial upgrading. Industry-wise, investment accelerated in sectors such as other transportation equipment, non-ferrous metals, food manufacturing, and chemicals. Infrastructure investment also accelerated year-on-year to 4.3%, the first increase since March. The real estate market experienced increased transaction activity, with the year-on-year decline in new commercial housing sales area and sales volume for January to October easing by 1.3 and 1.8 percentage points, respectively, compared to the January–September period. However, such improvement has not yet fed into increased investment.
Policies gave a marginal boost to consumption growth. In October, programs such as consumer goods trade-ins and the "Double 11" shopping spree fueled the year-on-year growth in retail sales, which climbed to 4.8%, up from September. Commodity retail sales growth reached 5%, driven by accelerated sales in home appliances, audio-visual equipment, cultural and office supplies, furniture, and automobiles at retail units above a certain threshold. Necessity consumption remained stable, and discretionary consumption showed modest gains. Auto retail experienced significant recovery, and the real estate chain surged, with the decline in retail sales of building and decoration materials narrowing. As a series of stimulus policies are gradually implemented and service supply is optimized, combined with holiday buzz, service spending is on a fast track.
Active regulation is steering prices towards stability. International crude oil prices dipped due to geopolitical factors, which, in turn, lowered prices in China's oil-related industries. Nevertheless, new policies appear to have revived demand for certain industrial goods, helping to curb the Producer Price Index's (PPI) monthly slide, which shrank by 0.5 percentage points month-on-month. Equipment manufacturing saw price drops due to global economic shifts and domestic sales promotion, slightly widening the PPI's year-on-year decline by 0.1 percentage point. Consumer Price Index (CPI) gains were modest in October, ticking up 0.3% year-on-year, a sign of stable prices overall. Non-food prices declined further by 0.1 percentage points, reflecting market dynamics, while food prices eased back to a 2.9% gain but continued trending upward.
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Date: Dec 3, 2025
Bart van der Meer, Green Transition Counsellor at the European Union Delegation to China, visited CDI on December 3, 2025. CDI expert provided an overview of Shenzhen’s green and low-carbon economic development, including when and how the process began, and also the city’s current trends and the future outlook for environmental protection and its dual-carbon goals.
Date: Nov 10, 2025
Beat Schneider, professor emeritus at Bern University of the Arts in Switzerland and an expert in China studies, visited CDI on November 10, 2025. Professor Schneider and CDI experts exchanged views on Shenzhen’s development history, its experience with reform and opening-up, ecological and nature conservation efforts, and its journey to becoming an internationally renowned city.
Date: May 26, 2025
On May 26, 2025, Prof HAN Yeong-Soo President of Korea Legislation Research Institute led delegation to CDI. Discussion focused on how Guangdong-Hong Kong-Macao Greater Bay Area provided legislative support for science and technology research and innovation and explored legislation innovation amidst the quickly evolving economic landscape. CDI experts briefly introduced the development of Shenzhen Special Economic Zone as well as future prospects. Two sides also exchanged views on the development of public policy research think tanks in both China and South Korea.
Date: March 31, 2025
On March 31, 2025, Prof. Michael Mainelli—British economist, former Lord Mayor of the City of London, and Chairman of Z/Yen Group—visited CDI. Prof. Mainelli shared insights on Z/Yen’s recent projects, including efforts to reduce trade barriers, initiatives to support the global green transition, research on the Smart Centres Index, and programs promoting Sino-UK educational exchange. The two sides discussed potential opportunities for bilateral cooperation between China and the UK, as well as prospects for research collaboration between CDI and Z/Yen.
Date: Nov 29, 2024
On November 29, 2024, a delegation from The Executive Office of H.H. Sheikh Mohammed Bin Rashid Al Maktoum (TEO) visited CDI. The discussions focused on cultural exchange, tourism collaboration, and policy alignment, while highlighting significant opportunities for cooperation in trade, investment, technological innovation, and cultural initiatives. Both sides also reached consensus that Dubai and Shenzhen share similarities in their rapid economic growth and notable achievements. Both cities are actively advancing efforts to further engage with the international community.
Date: Nov 26 2024
The 2024 Global Chinese Economic and Technology (GCET) Summit was held on November 26, 2024, in Phnom Penh, Cambodia. The event was organized by the KSI Strategic Institute for Asia Pacific and supported by the China Development Institute (CDI).
The world is facing growing economic and geopolitical uncertainties and challenges, impacting governments and business communities worldwide. Developing economies, including China and ASEAN nations, are especially vulnerable in these circumstances. In his opening speech, President of CDI Prof Fan Gang emphasized that, in order to overcome these difficulties and turn them into opportunities, closer international and regional cooperation, knowledge exchange, and collective action are essential.
The summit was attended by His Excellency Hun Manet, Prime Minister of Cambodia; His Excellency Dr. Aun Pornmoniroth, Deputy Prime Minister and Minister of Economy and Finance of Cambodia; and His Excellency Wang Wenbin, Ambassador of China to Cambodia. Government, business, and thought leaders were gathered together to discuss how China and ASEAN countries could collaborate to foster responsible policies, promote trade and investment, and advance scientific and technological innovation.
Date: September 15, 2024
Author: Dr. CAO Zhongxiong, Assistant President of CDI, and the Director of the Digital Strategy and Economic Research Center
China's platform economy has evolved through distinct stages, transitioning from unchecked growth to a phase of well-regulated governance and innovative development. Over time, this process has cultivated a group of leading platform enterprises. The last three years have been pivotal, signifying a period of significant transformation. Initially driven by the rapid rise of the "Internet Plus" initiative, platform enterprises expanded into traditional industries, often being equated with e-commerce companies by the public. However, as digital technology increasingly integrates with the real economy, platform enterprises are now venturing into emerging fields such as technological innovation, driving their businesses to new depths.
Consider Alibaba as a prime example. In the last three years, the company has significantly increased its investment in areas such as AI-driven large language models. Its proprietary “Tongyi” model has secured a leading position in the global open-source large-model landscape. Alibaba has also facilitated the development of next-generation models by leveraging its own computational power and technical capabilities. This evolution demonstrates a shift: platform enterprises are no longer merely commercial entities but are increasingly positioning themselves as digital enterprises. As pioneers of the digital economy, platform enterprises are leveraging digital technologies to drive supply-side reform, stimulate consumption, streamline supply chains, promote dual circulation (domestic and international), and foster flexible employment, transforming themselves into comprehensive integrators of digital technology application and advancement.
Although Alibaba’s journey began in e-commerce, it has progressively evolved into a frontrunner in China’s technological innovation. Amid a global wave of advancements, the company has achieved breakthroughs in operating systems and cloud computing, integrating innovation into its operations to enhance technological independence and resilience. Consequently, platform enterprises are now not only key players in commerce but also essential engines of technological progress.
China’s platform economy has now embarked on a new stage of development, necessitating a balance between effective regulation and the promotion of growth for its advancement.
Looking Ahead: The Expanded Role of China’s Platform Economy
1.Platform Enterprises as Leaders in Technological Innovation
China’s emphasis on technology has reached unprecedented heights. For platform enterprises, innovation is not only about their own advancement but also about enabling collaborative innovation across industries and ecosystems—a critical component of their "new journey." New technologies, especially in artificial intelligence, are advancing rapidly. Platform enterprises are uniquely positioned to provide the computational power and infrastructure essential to enhancing the feasibility, scalability, and economic viability of innovation. As major tech companies, they possess resource allocation capabilities, robust R&D capacities, and deep talent reserves, allowing for sustained investment in technological innovation and effective risk management.
2.Platform Enterprises as Catalysts for Emerging Productive Forces
The platform economy, as a novel economic model, is closely aligned with the national objective of fostering new productive forces. Market regulators expect platform enterprises to leverage technological innovation to drive industrial upgrades and assume a greater role based on their transformative outcomes. These enterprises are positioned at the forefront of the market, with profound insights into market demands, industry dynamics, and technological applications. They can overcome traditional constraints of time and space by aggregating, circulating, and sharing innovation resources online, promoting technological advancements across upstream and downstream industries. By empowering ecosystem partners, platform enterprises can stimulate the development of emerging industries and consistently contribute to new productive forces—which is a core responsibility and crucial in the digital economy ecosystem.
3.Platform Enterprises as Exemplars of Fair Competition
Compliance and maintenance of fair competition are crucial for sustainable development, whether achieved through the internal ecosystem or their external role as core players in the digital economy. At this new starting point, platform enterprises must continually strengthen their awareness of fair competition and improve their compliance capabilities. This not only facilitates their own growth but also establishes an industry benchmark. By optimizing the business environment and fostering fair competition, platform enterprises demonstrate a strong sense of social responsibility and commitment.
Navigating Challenges in a Rapidly Evolving Landscape
The accelerated advancement of digital technologies and the transformation of industries and ecosystems are propelling the global economy forward, fueled by computational power. However, technologically advanced nations often create "technology barriers" and "ecosystem barriers," hindering latecomers from catching up. As technological gaps widen, the challenges of addressing them increase exponentially.
China's platform enterprises have a solid foundation characterized by internationally competitive companies and the “scenario advantage” enabled by a unified, large-scale domestic market. Leading firms such as Alibaba have become critical infrastructure and technological platforms for national innovation. Fully developing the platform economy and harnessing the innovation capacity of platform enterprises will revitalize Chinese modernization and facilitate high-quality development.
Date: September 13, 2024
Author: Dr. LIU Jie, Senior Research Fellow at CDI
In 2021, China transitioned to a moderately aging society, with the aging process set to accelerate, posing increasing challenges to healthcare and elderly care. The rapid aging phenomenon is marked by three key features:
The China Population Aging Development Trend Forecast Report indicates that China will reach critical milestones in the acceleration of aging between 2035 and 2050, with the older adult population projected to peak in 2053. From 2021 to 2035, the older adult population is expected to increase from 300 million to 400 million, representing an accelerated growth rate. Simultaneously, the proportion of extremely old individuals (aged 80 and above) will continue to climb, accompanied by a sharp increase in the number of individuals with chronic conditions and disabilities.
Establishing a suitable integrated healthcare and elderly care service system has emerged as an urgent priority.
Insufficient Supply: Several integrated care models are still in their nascent stages. Nationwide, only 7,800 qualified institutions provide a total of 2 million beds, significantly insufficient to meet the massive demand. Rehabilitation hospitals and elderly care facilities often possess insufficient medical capabilities, and the medical support for home-based and community care is also inadequate.
Healthcare Payment Gaps: Existing medical payment systems fail to effectively support long-term hospitalization and rehabilitation for older adults, resulting in frequent transfers between facilities or significant out-of-pocket expenses.
Family Care Burden: The caregiving burden for families of disabled and cognitively impaired older adults is increasing annually. With the increase in the aging population and the decline in birth rates, many families struggle with the exorbitant costs of professional care.
Limited Long-Term Care Insurance Coverage: Although the number of pilot cities for long-term care insurance has expanded to 49, only approximately 1.34 million individuals get coverage, falling far short of the demand for disability care.
Addressing these challenges necessitates the development of a robust integrated healthcare and elderly care system.
1.Expand Integrated Healthcare and Elderly Care Services
To address the dual needs of healthcare and elderly care, resources must be coordinated to provide services tailored to demand, encompassing disease treatment, chronic disease management, postoperative rehabilitation, and long-term care. This entails:
Encouraging underutilized hospitals and medical institutions to transition into integrated care providers.
Implementing healthcare reimbursement policies in eligible elderly care facilities and promoting the development of medical services within these institutions.
Enhancing home-based and community care by augmenting the medical capabilities of community health centers, expanding the availability of family beds, and gradually strengthening the capacity of primary healthcare institutions to deliver in-home services for older adults.
2.Transition Secondary and Lower-Tier Hospitals to Integrated Care Facilities
Only 10% of hospitals in China are tertiary-level facilities, while secondary and lower-tier hospitals often struggle with operational difficulties and fail to meet the treatment, rehabilitation, and care needs of an aging society. Transforming these hospitals into integrated healthcare and elderly care facilities is essential. A referral mechanism should be implemented, enabling treatment-oriented hospitals to transition patients to rehabilitation hospitals, integrated care facilities, or elderly care institutions as part of a tiered medical system.
3.Achieve Universal Coverage of Long-Term Care Insurance
The coverage of social security-based long-term care insurance must be expanded, together with improvements in funding mechanisms and benefit guarantees, to ensure a government safety net. Additionally, commercial insurance companies should be encouraged to participate in pilot programs by offering personalized long-term care insurance products with tax incentives for buyers. By integrating insurance with care services, commercial insurers can help enhance the development of the care service system.
4.Expand Hospice Care Pilot Programs
Efforts should be undertaken to increase the number of hospice care facilities and strengthen the training of relevant medical staff. A bed-day payment model combining healthcare reimbursement and personal contributions should be investigated to meet the needs of terminally ill patients.
With the acceleration of China’s aging society, the integration of healthcare and elderly care will be vital in addressing the challenges posed by population aging to safeguard the well-being of older adults.
Date: August 27, 2024
Author: Mr. MING Liang, Research Fellow, Institute of Urbanization, CDI
In 2024, the Chinese AAA game Black Myth: Wukong debuted spectacularly, swiftly becoming a trending topic and a "top influencer." Inspired by the Chinese literary classic Journey to the West, this game has indeed created a “black myth,” achieving dual success in both critical acclaim and sales. The wide-ranging discussions it has sparked primarily revolve around the following three aspects:
1.Black Myth: Wukong Sets a Benchmark for High-Quality AAA Games in China
Domestic developers rarely ventured into AAA game territory owing to high costs, lengthy development cycles, and competitive threats. The launch of Black Myth: Wukong has altered this landscape. The game has gained widespread acclaim from players both domestically and internationally due to its top-notch character design, narrative structure, special effects, scene rendering, and voice acting. It has not only dominated sales charts in many countries and regions but has also become the first Chinese game to break into Steam’s top ten concurrent player rankings, ushering in a new era for China's gaming industry in the international arena.
2.Black Myth: Wukong’s Creative Team Embodies Both Idealism and Pragmatism
This monumental game was not created by a major corporation but rather the culmination of six years of dedicated effort by a small-to-medium tech company. The team balanced their aspiration to develop high-quality single-player games with the need for financial stability, which was provided by revenue from mobile game ventures. They achieved collaborative synergy by forming project teams in both the Guangdong-Hongkong-Macao Greater Bay Area and the Yangtze River Delta, bringing “Wukong’s black myth” to life.
3.Black Myth: Wukong Offers Fresh Perspectives on the Next Wave of “Cultural Export”
Video games are not just cultural carriers but also powerful channels for dissemination. The creators of Black Myth: Wukong seamlessly blended the “81 tribulations” from Journey to the West into the gameplay while digitally reconstructing 31 iconic landmarks from 12 provinces and cities across China with meticulous 1:1 accuracy. These endeavors vividly showcase the charm of traditional Chinese landscapes and the elegance of Oriental aesthetics, offering international players a rich and immersive experience of Chinese culture that transcends the story.
Beyond its Achievements: Reflections and Lessons
1.International Competition in Gaming is a Grueling Long Game
Similar to Wukong’s journey through the “81 tribulations,” the gaming industry demands constant innovation and refinement to maintain player engagement and loyalty. The game has achieved a remarkable debut, but the road ahead is challenging. Competing with global frontrunners requires extraordinary creativity, substantial investment, and continuous product optimization with operational excellence. While the game’s creators have received significant acclaim, they have also acknowledged criticisms, indicating areas for improvement. The considerable scrutiny and lofty expectations associated with the game serve as a “Sword of Damocles” over the team, signifying that this is only the “first level” of their journey. Many more “demons and monsters” lie in wait, making the journey ahead as arduous as it is promising.
2.Games, as a Vital Component of “Cultural Export,” Must Work in Tandem with Other Channels
As a blend of technology and creativity, Black Myth: Wukong offers a visually and audibly compelling introduction to Chinese culture. However, it still falls short of promoting regular and effective cross-cultural interactions. From the perspective of international communication practices, “cultural export” is a long-term, systematic endeavor that necessitates leveraging various cultural carriers and channels to establish a massive, effective matrix. Among these, the popularity of learning Chinese as a second language serves as a key indicator. As global interest in Chinese cultural symbols grows, the emergence of Chinese language education as a trend will be crucial in this new wave of “cultural export.” Nevertheless, “cultural export” has already set sail; the journey westward is poised to reach its destination.
3.Social Attributes of Games Call for a Balance of Multiple Factors
As a form of entertainment that encourages emotional and psychological engagement, video games not only generate substantial economic and commercial value but are also inherently constrained by laws, policies, cultural traditions, and ethical norms of different countries. As a unique cultural industry, the gaming sector has its own strengths and shortcomings. Policymakers should refrain from both excessive suppression and short-sighted “rush tactics.” Instead, they must strike an optimal balance between economic, social, and cultural dimensions.
Author: Dr. LI Enhan, Deputy Director of Token Digital Economy Research Center, CDI
Editor’s note: In the wave of global digitalization and intelligence, AI's role in artistic creation is challenging the foundations of copyright law. Questions about the originality of AI works, their copyright ownership, and the criteria for infringement are now at the forefront for legal experts. Against this backdrop, China and the United States, as major global players, are navigating the uncharted waters of AI and copyright with their distinct legal practices likely to shape international norms.
The growth of artificial intelligence (AI) requires a redefinition of traditional copyright concepts, including authorship, originality, and the attribution of rights and liabilities associated with infringement. While AI creations increase in complexity, the consensus finds that AI should not be granted authorship, as copyright is intended for human creations. However, with technological advancements and increasingly diversified creative forms, this position may encounter greater challenges and debates.
In the U.S., copyright law insists on a conservative approach and stipulates that human authorship is essential for copyright eligibility. This was evident in the case of "A Recent Entrance to Paradise," in which the court clearly stated that the prerequisite for copyright protection is "human authorship," thereby denying copyright registration for AI-generated pieces (Mathur, 2023). The U.S. demands significant human creativity in a work to deem it copyrightable, thus often excluding AI-generated works from copyright protections.
China, in contrast, demonstrates greater flexibility. When assessing AI-generated works, Chinese courts consider both the originality and the degree of human involvement and tend to judge whether works reflect human intellectual input and individuality. In the "Dreamwriter" case, the People's Court of Nanshan District in Shenzhen handed down a judgment in favor of the plaintiff Tencent. It recognized its AI-generated article on stock analysis as eligible for copyright since the article’s structure aligned with the format of the opinion piece and consisted of specific creative choices (Xiao, 2020).
These contrasting standards could lead to diverse future effects. The stringent option might limit the number of AI works eligible for copyright protection, affecting the innovation incentives of AI-related enterprises and individuals. In contrast, an open recognition approach could encourage AI creativity and foster synergy between AI technology and cultural industries. Yet, the latter may also encounter greater AI copyright dispute resolution challenges, necessitating a more nuanced framework for AI copyright recognition.
Furthermore, the conservative leaning of the U.S. may bolster traditional human creative processes and underscore humans' central role in art and culture. Meanwhile, China's flexible recognition could stimulate new forms of artistic and cultural expression. As AI creations may soon become integral to Chinese culture and art, China must prepare its cultural and art industries for the digital impact, addressing concerns such as the diminishing motivation among traditional artists and competitive pressures from AI-generated content in the market.
AI technology is now pushing copyright law into a new era. The contrasting perspectives and practices of China and the United States related to AI copyright reflect different interpretations of human creativity and hint at the future of global copyright law. The challenge for future lawmakers and practitioners will be in reconciling the enduring principles of copyright with the pace of technological innovation.
Reference:
Mathur, A. (2023, Dec 11). Case Review: Thaler v. Perlmutter (2023). Retrieved from Center for Art Law: https://itsartlaw.org/2023/12/11/case-summary-and-review-thaler-v-perlmutter/#post-61801-footnote-ref-0
Xiao, B. (2020, Mar 19). Shenzhen concludes first AI-generated article dispute case [深圳审结首例人工智能生成文章作品纠纷案]. Retrieved from People's Court Daily: http://oldrmfyb.183read.cc/paper/html/2020-03/19/content_166241.htm
Information
The Global Chinese Economic & Technology Summit (GCET 2025) is a premier event focused on "Global Leadership & Partnership in the Age of Digital and Green Transformation," scheduled for November 2025 in Kuala Lumpur, Malaysia. Organized by the KSI Strategic Institute for Asia Pacific, Institute of Strategic Analysis & Policy Research and China Development Institute, the summit brings together key stakeholders to explore critical economic and technological trends.
The one-day conference will address three primary themes:
Highlights include discussions on emerging technologies like AI and blockchain, sustainable development, green economy initiatives, and strategies for Chinese entrepreneurs navigating the global business landscape. The summit will feature high-profile speakers, including government officials, senior scholars and business leaders from China and Malaysia, offering insights into trade opportunities, digital transformation, and cross-border economic collaboration.
Key topics will range from RCEP and Belt and Road Initiative opportunities to fintech innovations, supply chain resilience, and the expanding influence of the Chinese diaspora in global markets.
Date: Nov 19, 2025
Hosts: KSI Strategic Institute for Asia Pacific, Institute of Strategic Analysis & Policy Research, and China Development Institute
Venue: Wisma MCA, Kuala Lumpur, Malaysia
Information
In recent years, the international trade landscape has remained complex and constantly evolving. Major international players such as China and New Zealand continue to face challenges posed by rising trade protectionism. How can the two countries fully leverage the APEC consensus to deepen bilateral cooperation and further strengthen regional connectivity?
In this edition of the China Development Institute – New Zealand China Council Dialogue, industry leaders and think tank experts come together to discuss the current state of the Chinese and New Zealand economies, their respective approaches to decarbonization, and opportunities for bilateral cooperation under APEC 2026.
Date: Nov 7, 2025
Hosts: China Development Institute, New Zealand China Council
Venue: CDI Mansion, Shenzhen
Information
The meeting was organized by Z/Yen Group in partnership with China Development Institute to bring together representatives of financial centers across the world to consider current strategic questions. This was the fifth annual webclave for financial centers, having started during the pandemic. The meeting focused on:
Date and time: 15:00-17:00 Beijing Time (GMT+8), 24 July 2025
Information
The Sino-US trade war continues to exert profound impacts on the global supply chain landscape. As core cities within the Guangdong-Hong Kong-Macao Greater Bay Area, Hong Kong and Shenzhen should proactively explore collaborative pathways for supply chain restructuring to enhance regional economic resilience. Concurrently, against the backdrop of digital economy advancement and consumption upgrading, the cultural, creative and tourism industry has emerged as a new engine driving economic growth.
With this in mind, China Development Institute and One Country Two Systems Research Institute jointly organized the 3rd Shenzhen Hong Kong Cooperation Forum on July 11, 2025. Centered on the dual themes of "Supply Chain Restructuring" and "Cultural Tourism Industry Innovation," the forum convened experts and scholars from both cities to jointly strategize synergistic development approaches.
Date: July 11, 2025
Hosts: China Development Institute, One Country Two Systems Research Institute
Venue: The Hong Kong Polytechnic University
Information
Shenzhen and Hong Kong are the “Twin Stars” of the Guangdong-Hong Kong-Macao Greater Bay Area. Hong Kong is a highly advanced international financial center, while Shenzhen has comprehensive science and technology ecosystem. How can these two cities leverage their unique strengths to foster development and cultivate new quality productive forces? The two cities are presented with a shared prospect and opportunity amidst this new developmental stage.
On August 16, 2024, China Development Institute, One Country Two Systems Research Institute, and the Shenzhen Think Tank Alliance co-hosted the "2024 Shenzhen Hong Kong Cooperation Forum". The forum gathered experts and scholars from both Shenzhen and Hong Kong to discuss how to use technological innovation as a breakthrough to build Shenzhen and Hong Kong into a metropolis with greater international influence.
Date: August 16, 2024
Hosts: China Development Institute, One Country Two Systems Research Institute, Shenzhen Think Tank Alliance
Venue: China Development Institute
Information
In March 2007, Z/Yen and the City Of London released the first edition of the Global Financial Centres Index(GFCI), which provides evaluations of competitiveness and rankings for the major financial centers around the world. In July 2016, China Development Institute (CDI) and Z/Yen established a strategic partnership for research into financial centres. We continue our collaboration in producing the GFCI.
The GFCI is updated every March and September and receives considerable attention from the global financial community. The index serves as a valuable reference for policy and investment decisions.
The 36th edition of the index will be formally launched at the GFCI 36 Launch Symposium to be held in Busan, South Korea. International speakers are convened to share insights on various topics such as the topics on digital technology, green development, maritime industry to promote the sustainable development and global cooperation of international financial centers.
Date: September 24, 2024
Host: China Development Institute, Z/Yen Group, Busan Finance Center
Venue: Nurimaru APEC House in Busan, South Korea
And it's not just about shipping more units. Chinese manufacturers are now designing products that fit the way Europeans actually live, from portable units that bypass strict installation rules to gadgets that offer sun protection too. Zhao Chenchen takes a closer look.
Umbrellas, mini fans, and ice makers. The demand for these cooling appliances from China surges as Europe experiences another summer of extreme heat. And Chinese manufacturers are redesigning these products to better fit local lifestyles.
ZHAO CHENCHEN Foshan, Guangdong Province "This is a mobile split air conditioner tailored for the European market. The top module, which only weighs about 10 kilograms, functions as the outdoor condenser, and it can be easily mounted onto a windowsill without requiring structural drilling."
XIONG XUEQIN Sales Director, Midea RAC Europe Region "In Europe, the rental rate is relatively high, and people want products that can be used right away. Compared to traditional mobile air conditioners, it has higher energy efficiency to save your electricity bill and better noise control as its external unit is outdoors. That's why it can win the hearts of European consumers."
A product like this was born out of a localized approach. European consumers did not have the demand to purchase air conditioners until recent years. But with a global designing team, Chinese enterprises can respond faster with local insight.
ZHAO ALI Europe Product Manager, Midea RAC Overseas "We started from the product, with the front-end team identify a specific problem from the local consumers. Then we bring together a dedicated team to develop a solution, working closely with our R&D teams in China as well as our industrial design team in Italy."
Sales of this AC in Europe have more than doubled to some 200,000 units this year. More Chinese manufacturers are designing products around local consumer needs, from portable fans for outdoor lifestyles in Latin America to energy-efficient climate solutions for European homes. Expert says innovation no longer stops at the factory floor.
LIU ZHIJIE Director, International Cooperation Department China Development Institute "It's about tech innovation. We've long moved from the model of original equipment manufacturing. Chinese companies can now turn independent R&D into products fast , driven by the market demand."
With an expanding China–Europe freight train network, some shipments can now reach Europe in as little as 15 days. That's around 25 days faster than traditional sea freight. As summer demand gradually gives way to the heating season, production lines are already preparing for the next wave of orders.
Designing smarter, responding faster, and staying closer to the markets they serve are becoming the key competitiveness for Chinese manufacturers. （Zhao Chenchen, CGTN）
Editor’s note: As key transportation hubs in the Guangdong-Hong Kong-Macao Greater Bay Area, the cluster of ports in Shenzhen and Hong Kong is seeking a leap in value with a refreshed outlook and more integrated functions to turbocharge industries and the cities’ respective economies. China Daily presents a three-part series to document the transformation, with the first article spotlighting the significant potential of the land-port economic belt.
A chain of cross-boundary checkpoints has mushroomed on both sides of the Shenzhen River and its adjacent bay areas, carving out an economic corridor that serves as a key gateway for the flow of people, goods and capital between innovation epicenter Shenzhen and world financial hub Hong Kong.
After the twin cities’ ups and downs for almost half a century, the crossings are undergoing a profound transformation to enhance their value, aiming to convert massive traffic flows into fresh economic momentum.
Desperate for new development opportunities, Shenzhen and the Hong Kong Special Administrative Region have turned their sights to the boundary areas, with the southern Chinese mainland boomtown upgrading crossing facilities and integrating industries to further unleash the capabilities of the strategic passages, and the SAR spearheading its ambitious Northern Metropolis project to reshape the once-desolate area.
With greater development priorities, the future of this prime location is expected to be a strategic lever for both sides to address economic pain points, promote regional industrial upgrading and advance the country’s high-level opening-up.
The seven land-boundary crossings between Shenzhen and Hong Kong currently handle over 200 million passenger trips annually, accounting for 40 percent of the nation’s total inbound and outbound passenger traffic. They include the three busiest ports — Luohu, Futian and Shenzhen Bay — complemented by the only round-the-clock checkpoint, Huanggang, as well as Wenjindu, Liantang and Shatoujiao.
The figures speak for themselves. Cross-boundary visits at all ports hit a record high of 273 million last year, up 14 percent year-on-year, with an average of 750,000 movements logged daily. Since Hong Kong’s return to the motherland in 1997, passenger throughput between the two cities has more than tripled, and the trade volume is up 10 times to 790 billion yuan ($116 billion), magnified by the opening of more crossings.
“Linking two core cities of southern China and benefiting from the institutional advantages of ‘one country, two systems’, the Shenzhen-Hong Kong boundary area, driven by trade and innovation-technology industries, is of unique significance to the country,” says Xie Laifeng, who heads the Hong Kong, Macao and Regional Development unit at the China Development Institute.
“Whether it is in terms of passenger traffic or internationalization, it outperforms many other counterparts and even surpasses the economic vitality of some border regions between countries,” he says. “As cross-boundary traffic continues to rise, and integration of the Guangdong-Hong Kong-Macao Greater Bay Area enters a new phase, the boundary crossings’ functions need to be further upgraded, with new economic models in place to promote deeper industrial, livelihood and cultural connectivity.”
Pursuing such lofty goals, China has made extraordinary efforts to evolve ports of entry from peripheral passages to regional economic engines. Under the 14th Five-Year Plan (2021-25), the country added and expanded 40 boundary crossings, bringing the total to 311.
New phase, new plans
Entering the nation’s 15th Five-Year Plan period (2026-30), Shenzhen has made boosting the boundary area economy a key priority, pledging to adopt varied strategies for developing different land ports. The city’s renovated Huanggang Port is due to open this year, while Luohu, Shatoujiao and Wenjindu ports will be upgraded in the next few years, according to Wu Jun, director of the Cooperation and Development Division of the Office of Port of Entry and Exit of the Shenzhen Municipal People’s Government.
The upgraded checkpoints will see streamlined customs procedures, greater processing capacity and more clearly defined functions, Wu tells China Daily in an exclusive interview. The new-look Huanggang Port will release 500,000 square meters of land to back up the development of the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone.
In the long term, Shenzhen may create a dedicated crossing in the Hetao cooperation zone to facilitate the movement of scientific researchers, as well as the Qianhai checkpoint of the planned Hong Kong-Shenzhen Western Rail Link — a vital cross-boundary infrastructure that will connect the two cities in just 15 minutes.
In Shenzhen’s push to strengthen the border crossings’ integration with industries, western checkpoints will focus on modern services and high-end consumption, while those in the central areas will facilitate the flow of scientific and technological resources, and those to the east will create new scenarios for cross-boundary consumption.
Luohu district — home to three checkpoints — took the lead in launching initiatives last year to revitalize the port economy, focusing on cross-boundary trade, high-end consumption, emerging technology applications and talent communication.
“Along with the earliest-developed crossings, Luohu has the closest ties, most frequent exchanges, and the most active cross-boundary consumption with Hong Kong,” says Liu Xiaomei of the Luohu District Development and Reform Bureau.
The city hopes to leverage these advantages and nearby industrial resources to introduce lightweight, high-value-added industries along the boundary, such as coordinating with Hong Kong in developing a life-and-health industrial park, exporting financial and knowledge services, and expanding the trade of fresh food and agricultural products, she says.
Boundary crossings are also excellent platforms for showcasing products and promoting the consumption of smart home devices, wearable technology, senior-friendly technology, automobiles, as well as gold and jewelry.
“Previously, the crossings mainly functioned as transit hubs — busy but underutilized. The initiatives are set to leverage their geographic advantages to make them destinations for Shenzhen and Hong Kong residents to work, live and relax,” Liu says.
On the other side of the boundary, the 300-square-kilometre Northern Metropolis is rapidly taking shape, and is on course to be Hong Kong’s most dynamic area in the next two to three decades. Its core industries — tech innovation, the digital economy, low altitude aviation and higher education — along with a projected population of 2.5 million and a new transport network centered on the Northern Link, are poised to fuel the region’s economic growth.
Zheng Yongnian, dean at the School of Public Policy of The Chinese University of Hong Kong, Shenzhen, says the “port economy” represents an upgrade from the traditional “transit economy”.
“By leveraging the traffic of boundary crossings, it fosters the development of local industries, such as consumption, trade and logistics, achieving an extension of industrial chains and economic value-added,” he said.
“A growing number of crossings are undergoing such transformation. Many countries are promoting economic growth, employment and trade by establishing free trade and special economic zones, or port clusters at seaports, land border crossings or airports, transforming them from economic outposts into hubs,” Zheng says.
Hong Kong business-sector lawmaker Erik Yim Kong has compiled an insightful research report in this field, saying the port economy holds promise as a new economic driver for Shenzhen and Hong Kong that will strengthen the overall level of openness and industrial competitiveness of the 11-city Greater Bay Area.
As natural conduits connecting both sides, the port areas can further explore opportunities in customs clearance facilitation, cross-boundary data flow, and mutual recognition of professional qualifications, providing valuable insights for other free trade zones and cross-border cooperation zones across the country.
Connecting domestic and international markets, developing border ports can further improve the efficiency of cross-boundary logistics, passenger and capital flow, backing the country’s “dual circulation” strategy and high-level opening-up, says Yim.
Tailored strategies needed
Given the varying levels of development in the border regions of both sides, different project strategies are essential.
Xie says that Shenzhen’s port cluster, having matured after years of development, demands new business models and greater internationalization to unlock its worth. He calls for urgent attention to enhance older ports with haphazard layouts, aging infrastructure and severe traffic congestion. For new ports being planned, allocating more space for new consumption formats and for innovation and entrepreneurship would be ideal.
With Hong Kong’s inno tech parks running at high capacity, the boundary port areas are well-positioned to absorb spillover demand. Attracting more Hong Kong and international firms to the area would also spur development of the Northern Metropolis, he says.
He said he believes Shenzhen’s crossings will see significant improvement under the 15th Five-Year Plan. With Luohu taking the lead, he hopes more areas will follow suit in scaling up port-driven economic development, pinning high hopes on Qianhai and Shekou in Nanshan district.
On the Hong Kong side, Yim says, developing the boundary areas has long been neglected, resulting in underdeveloped industries and inadequate supporting infrastructure. The authorities’ lengthy decision-making and implementation procedures have further slowed its pace of development.
He suggests forming a high-level Shenzhen-Hong Kong cooperation task force to elevate port development to the national level, jointly planned and developed by both sides to create complementary strengths. Hong Kong’s growth can be expedited through proposed dedicated legislation for the Northern Metropolis, which is set to innovate land development models and speed up project approvals.
In Zheng’s view, the port cluster should tap the SAR’s strengths to vigorously develop cross-boundary service industries — an area in which China’s economy has lagged and which is crucial to future international trade growth.
He advocates combining the policy advantages of both sides to make these checkpoints the first stop for companies going global. Building on the opportunities presented by the nation hosting this year’s Asia Pacific Economic Cooperation meetings in Shenzhen, the Shenzhen-Hong Kong port areas could further deepen policy openness on multiple fronts, including visa and tax-related measures, he added.
Zheng also recommends drawing on successful experiences of advanced port-economy models like Singapore, Dubai and Tokyo to develop diversified businesses at border ports, building free trade zones, and developing complete industrial chains in coordination with surrounding regions to ensure that the boundary corridor becomes an integral part of the national economy.
Next Actions
1. Elevating the strategic positioning of the border economic belt to a “national-level Shenzhen-Hong Kong cooperation platform”.
2. Jointly planning and developing the border region to achieve complementary advantages of the two sides.
3. Strengthening spatial planning for existing border crossings and strategically integrating them with high-value-added industries based on their respective strengths.
4. Reserving space for emerging industries, such as the low-altitude economy, as well as for innovation and entrepreneurship, when planning new border crossings.
5. Taking advantage of the nation’s hosting the 2026 Asia-Pacific Economic Cooperation meetings to deepen policies on opening up the boundary areas, particularly with regard to visa and taxation matters.
The fuel crisis across the global airline market is not only influencing passengers’ summer travel choices, but may also reshape the aviation industry’s international landscape, which is facing mounting challenges amid global turbulence.
The Guangdong-Hong Kong-Macao Greater Bay Area, which boasts multiple major airports, including an international air hub in Hong Kong, is also feeling the pinch. But the region’s relatively stable fuel supplies may help it fill the gap caused by international flight reductions and accelerate its development of a world-class airport cluster, experts say.
The soaring oil prices caused by conflict in the Middle East have driven up global jet fuel prices and led to supply shortages in many regions, resulting in widespread flight cancellations across international routes and increased fuel surcharges on airline tickets.
Jet fuel prices have reached a ten-year high. The domestic settlement price for jet fuel rose from 5,600 yuan ($821) per ton in March to about 9,800 yuan per ton in April, marking a monthly increase of 75 percent. International jet fuel prices have surged by more than 100 percent over the past two months, far outpacing the rise in crude oil prices.
The surge in prices is rapidly eroding profit margins, leading to the widespread cancellation of unprofitable routes. In April and May, which covers the Labor Day Golden Week, a large number of flights from Chinese mainland cities to Southeast Asia and Australia were canceled, including those to tourist hotspots such as Phuket, Bangkok, and Sydney.
In Hong Kong, Cathay Pacific and its subsidiary Hong Kong Express have canceled approximately 2 percent and 6 percent of their passenger flights, respectively, from mid-May through the end of June. Greater Bay Airlines has also canceled flights to Bangkok from May through September, as well as some flights to Taipei.
Zhou Shunbo, executive director of the New Economy Institute at the Shenzhen-based China Development Institute, said the fuel price surge has had a major impact on the operations of low-cost airlines, with larger airlines also being hit. Coupled with the Russia–Ukraine conflict, these geographic tensions have dealt another blow to the international aviation industry, which has been slowly recovering from the COVID-19 pandemic.
He believes that while some domestic travel demand may shift to high-speed rail, the uncertainty surrounding international flights and short-term price fluctuations will dent people’s willingness to travel abroad in the near term, particularly among budget travelers.
Reduced passenger flights will also cut cargo capacity in aircraft holds, which may drive up the shipping costs for goods that rely on air transport — such as precision electronic components and high-value seafood. This could further affect the development of core industries and everyday life in the Greater Bay Area, Zhou said.
If the situation persists, it may prompt national and local authorities to examine the long-term impact of rising fuel costs on urban development and to introduce policies to aid the aviation industry and its shift to sustainable energy.
He cautioned that flight slots at key international hubs — such as London Heathrow Airport — are highly valuable. If a carrier reduces its flights and gives up certain slots, they may be auctioned off to other airlines, making it difficult to re-enter that market.
Given the current ample supply of jet fuel in China, he believes the Greater Bay Area can seize this opportunity to capture market share from affected international markets and further the goal of developing its local airports into international aviation hubs.
Timothy Chui Ting-pong, executive director of the Hong Kong Tourism Association, said that in addition to the Labor Day holiday, the entire summer season from June to August is the peak season for tourism. Many students planning to study abroad will choose to fly from Hong Kong, and these plans will also be affected under the current circumstances, he added.
He said flight reductions would impact Hong Kong International Airport’s high-frequency, dense transit network as well as its cargo services — which rank first globally in terms of throughput — potentially weakening the city’s competitiveness as an international aviation hub in the long run. However, he emphasized that this is an industry-wide challenge troubling global airports.
Chui urged local airlines to maintain strategic routes connecting Hong Kong to Europe, Japan, the Chinese mainland and Australia, ensure a stable local fuel supply, and provide appropriate compensation to affected passengers to maintain their confidence in local services.
If the fuel crisis continues, the government should consider introducing support measures — for example, reducing fees for aircraft parking and airport operations, and providing subsidies for key trunk routes, he said.
As the Labor Day holiday approaches, many travelers have taken to social media to share their experiences of flight cancellations and discuss how to recoup their losses. Chen Xueqing, a traveler from Chongqing, booked a China Southern Airlines flight two months in advance to enjoy a vacation in Vietnam, which was subsequently canceled.
She had “carefully selected” the flight as it did not require her to take any extra leave. Like her, many people assumed that the wave of flight cancellations would only affect overseas aviation companies and did not expect domestic carriers to be affected as well.
Although she will receive a full refund, other flights on the same day had risen to 5,000 yuan, far exceeding the original cost of her ticket. Furthermore, she had already booked domestic flights and hotels in Vietnam, which were non-refundable, meaning she would incur a loss regardless of whether she went or not. She later negotiated with China Southern Airlines and managed to rebook onto an Air China flight on the same day.
To minimize potential losses, travelers are recommended to prioritize major airlines with a wide selection of routes and flights, carefully review the terms and conditions before purchasing international tickets, and opt for hotels and other travel products that offer free cancellation whenever possible.
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