Beijing — As the global trade landscape tightens, China is accelerating a strategic pivot in its development model — a transition fueled by innovation, domestic consumption, and market reform. Economists say that despite the headwinds of rising US tariffs and other external shocks, this China growth model shift is gaining momentum.
Newly released figures from the National Bureau of Statistics indicate a 5.4% year-on-year growth in China’s GDP during Q1 2025. Analysts attribute the stronger-than-expected performance to a combination of previous policy stimulus, new reforms, and expanding domestic initiatives.
President Xi Jinping emphasized during the recent Central Economic Work Conference that China must fortify its economic foundations by reducing reliance on exports and investment-heavy strategies. Instead, the country is urged to develop sustainable demand from within — a move that places consumers and innovation at the center of economic planning.
“We’re entering a phase where domestic demand and innovation will be the main pillars of growth,” said Wang Yiming, Vice-Chairman of the China Center for International Economic Exchanges. “This moment, though challenging, offers a rare chance to realign our long-term strategy.”
The Chinese leadership has also reiterated its readiness to counter external uncertainty. Policies aimed at stabilizing domestic markets, strengthening industrial transformation, and promoting high-standard reforms are already underway.
According to Niu Li, Deputy Director at the State Information Center, the government retains ample policy flexibility to support its annual growth target of 5%. He noted that the current environment presents not only risk but also opportunity — particularly in replacing legacy growth drivers with more resilient, innovation-powered engines.
Experts argue that to sustain this China growth model shift, reforms must go beyond fiscal measures. Zhang Yansheng, senior researcher at the Chinese Academy of Macroeconomic Research, said empowering private sector players and building long-term market confidence is essential.
“The real response to trade pressures is not retaliation, but transformation,” Zhang explained. “By deepening reform and opening-up, we allow market forces to lead, and in doing so, we future-proof China’s economic trajectory.”
