The frequently critical comments about the slowdown in the growth of the Chinese economy do not help to understand the action of its leaders and the direction in which the country is heading. A range of between 4.5 and 5% had been chosen for GDP growth in 2026. The figures for the 1st half of the year placed it at the bottom of this range and the latest forecasts for the 3rd quarter estimate it to be even lower. While business and public sector investment remains dynamic, household consumption is growing little and the main driver of the Chinese economy is now foreign trade. Inflation, despite the rise in energy prices (+4.1% in August) remained low with +0.8% year-on-year. 

Over the first eight months of the year, retail sales of consumer and food goods increased by only 1.1% compared to last year, and total sales including services by only 2.5%, largely thanks to tourism (+4.9%). China has therefore not finished paying the consequences of the real estate crisis, which has caused a drop in housing construction and household spending resulting from moving into a new residence.

Conversely, the main driver of the Chinese economy remained foreign trade, the volume of which increased by 17.6% over eight months, compared to the same period in 2025. Exports increased by 14.6% and imports by 22% due to increases in fossil fuel prices. The external balance nevertheless amounts to 806 billion dollars since the beginning of the year.

The government's action to support consumption has so far proved insufficient. Very low interest rates have not allowed a resumption of housing acquisitions. The low wage increases, particularly outside the major cities, have affected purchasing power and the consequences of the policy implemented during the COVID-19 epidemic with the isolation and withdrawal imposed at the time have left traces that have not been completely erased.

But the main factor is demographic. The one-child policy, applied from 1971 onwards in a very rigorous way, caused a stagnation and then a decline in the population at the same time as its ageing. However, with age, we have less need for goods and therefore we consume less. This policy was only abandoned in 2015 but it took a long time to change family behavior, which the Chinese authorities underestimated. It was not until 2025 that significant measures in favor of births were adopted, such as family allowances or maternity leave. In the meantime, China had moved closer to the Japanese model with a declining population, a slowdown in household demand and therefore in growth.

To cope with what was likely to appear to be a failure, China wanted to reconnect with its historical tradition and become one of the centers of world trade, the new economic Middle Kingdom. Its companies were ready. American and then European and Japanese multinationals had long since developed their exports and investments abroad. Chinese groups, which had the major advantage in terms of production costs conferred on them by their huge domestic market, were to follow this path.

This evolution has often been described as the transition from "China as the factory of the world" to "China as the conqueror of the world". This is an inaccurate description because this change stems above all from an entrepreneurial logic. The Chinese groups have only been inspired by the models of their American and European counterparts, with whom they had often established links, either as suppliers or as partners. German car manufacturers, for example, had concluded agreements with component manufacturers, distribution networks and even Chinese financial institutions to sell their models in order to establish themselves on the market. It is therefore not surprising that their Chinese competitors are now doing the same on the German market. 

But the comparison has its political limits. Multinationals have developed in countries that were, most of the time, allies of their country of origin that had adopted the same values within democratic regimes. However, China has a radically different political regime and has not formed any formal alliance with the countries in which its companies had decided to invest in order to develop there. To become the New Middle Empire, Beijing had to embark on intense diplomatic activity to overcome this obstacle and face political opposition.

 We are seeing the effects of this today with the creation of new international bodies, such as the Shanghai Cooperation Organization, the strategic partnership with ASEAN and President Xi Jinping's participation in multiple meetings, such as the last BRICS summit, where he proposed four initiatives to address the shortcomings of today's world in the field of peace, development, security and international governance, as well as exchange programs for young engineers and development projects in new technologies.

This action is an extension of the New Silk Road program launched in 2013, shortly after he came to power. Originally focused on Central Asia, what has been renamed the "Belt and Road Initiative" now extends to Africa and Latin America. China finances considerable investments made by its companies in major infrastructure. The resulting growth of the countries concerned opens up new export markets. The Chinese president has thus become aware of the importance, if not the decisive character, of foreign trade results in achieving the growth objectives that were set in the XVth Plan, which runs until 2030.

 Xi Jinping is therefore personally involved in discussions with the leaders of the major economies to show the importance he attaches to them. He met for the third time in two years with Indian Prime Minister Modi to put an end to past tensions that had resulted in military clashes following disagreements over the borders between the two countries. He is in constant contact with his Russian counterpart, whose country is one of China's main suppliers of fossil fuels.

He will finally travel to the United States in a State visit, to meet Donald Trump for the second time this year and try to convince him to stop considering China as a rival power and to make him accept the idea that his country can be a partner. Despite the multiple threats of tariffs, he hopes to establish a real win-win partnership. He continues to defend the existence of a Global South that he believes he personally embodies since the BRICS meeting in September. Without being anti-Western, these countries assert their rights to be non-Western.

Beijing's intense diplomatic activity also has as a priority to strengthen the position of its companies in these countries by convincing them that it is in the interest of each to define the conditions of cooperation where everyone would win. Given the importance of foreign trade in Chinese growth, we understand the logic of this.

The question that remains is that of the virtual absence of Europe in these discussions. It is therefore time for its leaders to become aware of the issues at stake and no longer remain on the sidelines of this movement that could transform the world economy in the future.