In China, the taste for metaphors is widespread. The calendar is no exception. According to the signs of the zodiac, the year that will begin will be that of the horse succeeding that of the serpent. Will the pace of growth be similar to a canter or a trot? The generally unfavourable assessment of the Chinese economy in the West makes a diagnosis and forecasts more difficult. But the country's influence on the global economy makes it essential to better understand its strengths and weaknesses.
In 2025, in an unfavorable international environment, the 5% growth target was achieved according to government authorities, who will meet in March to set targets for 2026. A slightly less ambitious figure of between 4.5 and 5% is expected. But no indication has yet been revealed of the government's action to support the economy and therefore to stay on the current high pace. This is much lower than the performance achieved during the post-war boom that the country experienced between 1989 and 2019, under the effect of the reforms undertaken by Deng-Xiao Peng. But the size of the Chinese economy makes this type of comparison meaningless.
China faces three challenges and it is its ability to overcome them that will set the course for the next few years. The first is demographic. The country is aging much faster than predicted and the population has begun to decline. It is first of all the consequence of the one-child policy practiced since the 80s to mitigate the effects of strong population growth. A correction was made, but it was too late and the incentives offered to families were insufficient to boost the birth rate. The very severe lockdown policy adopted to defeat the Covid-19 epidemic has also caused a shock of loneliness and withdrawal, the effects of which on the birth rate have not completely disappeared.
The second difficulty, partly related to the first, stems from the end of the rapid urbanization cycle that the country has experienced over the past thirty years. The migration of young people born in rural areas to find a job and start a family in a city has slowed down significantly. This caused a major real estate crisis with the bankruptcy of the country's two largest developers. This has contributed to the slowdown in growth, even if this phenomenon must be put into perspective. Compared to past results, the slowdown is obvious, but compared to countries that have reached the same level of development, a growth of 5% is still a more than honourable performance.
The third difficulty results from the first two. Household demand is no longer a sufficient engine to generate strong growth. A first series of one-off measures was adopted in 2025 such as bonuses granted in the event of a birth, interest rate reductions in the event of the purchase of a home or salary increases. But the figures for 2025 show that this has not been enough and more proactive decisions are expected to accompany the publication of the 2026 objectives in March and give them sufficient credibility.
The Chinese economy is not going to gallop again during the Year of the Horse and the growth rates of the 90s and 2000s belong to a bygone era. But the size and diversity of the production apparatus as well as the appetite that has not completely extinguished among consumers should allow China to consolidate its position as a leader in world trade with companies that will become increasingly formidable competitors for their American and European counterparts.
China will be less affected by the continuation of international tensions than the developed countries because the engines of global growth have shifted to the "Global South" and the ASEAN countries. Beijing has stepped up initiatives to strengthen its relations with these countries, particularly within the framework of the Shanghai Cooperation Organization, and to create new partnerships. Constructive meetings were held at the end of last year. The presence of a large Chinese diaspora in these countries also makes it possible to satisfy new customers and to forge agreements with local companies. Trade with the countries of the Global South is expected to grow by 6% per year in the future and reach $1,250 billion in 2033.
Foreign trade with the region is therefore experiencing double-digit growth in some countries such as Vietnam and Indonesia. The importance it has taken on makes it possible to mitigate the consequences of the protectionist measures decided in particular by the American administration. We are in the presence of a structural phenomenon and a real shift that will become more pronounced in the future because the increase in populations and the rise in living standards in these countries has no reason to slow down as the gap with the developed countries remains high. The example of China yesterday and India today shows that this is possible and even probable.
The other factor that should help to sustain activity is the transformation of Chinese industry, which will allow it to impose itself more and more on the international scene. In their recent meetings, China's leaders have clearly set goals for companies to use new technologies to satisfy not only their customers at home but also global demand. Three sectors experienced very strong growth in their added value in 2025, electronic components (+25%), robots (+28%) and new vehicles using new energies (+28% with 16.5 million sales). Biotechnology is also an area where significant research efforts are underway, which will strengthen the capabilities of the pharmaceutical industry in the future.
To make this performance possible, China has the necessary highly qualified workforce, since more than a million engineers and scientific researchers are trained each year. The needs in terms of artificial intelligence and for the processing and transmission of information can thus be largely met. The XVth Plan (2026-2030) will therefore see an acceleration of the transformation of the Chinese economy that will make the country a major technological power.
The question of the growth rate, whether it will be above or below 5%, will therefore be of less importance in the future. It is the new products and markets on which the efforts of state-backed companies will focus that will determine the dynamism of the Chinese economy and its consequences on its competitors. The case of solar panels and their role in the energy transition is a good reference. The availability of raw materials, technical expertise and the size of the domestic market were the determining factors that allowed the country to become the undisputed world leader in a few years. This example will not remain an exception.
A new economy is being born and the question will not be whether it will gallop or trot during the Year of the Horse. In addition to the measures intended to support activity and their impact on consumption, it will be essential to observe the evolution of the production of humanoid robots, 3D printers and electric vehicles.
China will thus gradually cease to be the world's factory and become the country where software and new machines are designed and developed in factories around the world. Its influence in international economic relations will therefore not be limited to its dominant position in strategic raw materials.