China's economy in masterful upgrading

In the first three quarters of 2025, China's economy maintained steady performance despite a complex external environment and domestic structural adjustment pressures. According to data released by the National Bureau of Statistics, China's gross domestic product grew by 5.2 percent year-on-year. This rate not only surpasses most major economies, but also demonstrates the strong resilience of the Chinese economy.

The World Bank's Global Economic Prospects report released in June forecasted global economic growth at 2.3 percent in 2025. In this challenging global environment, China's remarkable performance stems fundamentally from a profound process of "power transformation" and "system upgrading".This is not a simple repetition of past models, but rather a comprehensive evolution driven jointly by new quality productive forces, activated domestic demand, supportive macroeconomic policies, and improved development quality and efficiency.

Accelerating with new quality productive forces to build new growth pillars is the most distinctive feature of China's transformation of growth drivers. Economic growth no longer relies on traditional infrastructure or real estate, but is driven by advanced manufacturing led by technological innovation.

In the first three quarters, the value-added industrial output of equipment manufacturing and high-tech manufacturing rose by 9.7 percent and 9.6 percent, respectively — well above the overall industrial output growth rate — becoming the main engines of industrial expansion. This shows that China's industrial system is striving toward the mid-to-high end of the global value chain.

The value-added industrial output of integrated circuits increased by 22.4 percent, reflecting notable progress in overcoming technological bottlenecks and ensuring industrial chain security and self-reliance. The country's "grain" of the digital economy is becoming increasingly self-sufficient.

The output of intelligent equipment manufacturing rose by 12.2 percent, proving that the application of technologies such as artificial intelligence and the industrial internet is spawning a massive market for smart equipment, providing strong support for the nation's digital transformation.

Meanwhile, products linked to green and intelligent transformation saw simultaneous growth in both quantity and price. The output of new energy vehicles surged 29.7 percent. Chinese brands not only dominate the domestic market, but also show strong competitiveness globally. A complete ecosystem — from battery materials and vehicle manufacturing to intelligent charging — has taken shape.

Industrial robot output jumped 29.8 percent, as the pace of "machines replacing humans" accelerated rapidly across sectors amid demographic changes. This trend not only addresses labor shortages, but also greatly enhances production efficiency and product quality.

In China, new quality productive forces are not an abstract concept. They materialize in high-speed intelligent production lines, smart electric vehicles shipped worldwide, and advanced chips produced domestically — all becoming the most powerful engines propelling economic growth.

Given the enormous scale of China's economy, its resilience lies in the mutual reinforcement of domestic and international circulation. On the external front, the foreign trade structure continues to improve, enhancing risk resistance. Goods exports grew by 7.1 percent — an impressive performance amid sluggish global trade. Exports to countries participating in the Belt and Road Initiative rose by 12.4 percent, indicating that China's "circle of friends" in foreign trade has become more diversified, effectively offsetting weak demand in traditional markets and stabilizing the overall trade foundation.

On the domestic front, internal demand continues to expand, with consumption serving as a key stabilizer. Final consumption expenditure contributed 53.5 percent to economic growth — over half of the total — indicating that domestic demand has become the fundamental driver of growth.

Service retail sales rose 5.2 percent, and during long holidays, the cultural and tourism markets saw robust activity. New consumption scenarios such as guochao, or China chic, consumption, and immersive experiences continued to emerge, showcasing China's vast consumption potential and upgrading trend.

On one hand, corporate profitability has improved significantly. Profits of industrial enterprises above a designated size grew by 3.2 percent year-on-year, with the September figure alone surging 21.6 percent. This figure is crucial — it indicates that business operations are fundamentally improving, shifting from "revenue without profit growth" to "rising both in quantity and quality", and market vitality is effectively being restored.

On the other hand, prices have risen moderately. The core consumer price index, which excludes volatile food and energy prices, has expanded for consecutive months, reflecting a recovery in underlying demand, steadily improving market expectations, and smoother economic circulation.

The Chinese government has refrained from adopting large-scale stimulus measures and instead implemented a series of targeted and effective macro policies.

Investment directions have been highly strategic. First, they are forward-looking, focusing on emerging sectors such as the digital economy and artificial intelligence to secure competitive advantages for the future. Second, they address weak links, with strong support for urban renewal in areas such as transport and energy, which not only boost current investment, but also enhance urban capacity and development potential. Third, they stimulate market consumption potential through initiatives like equipment upgrades and consumer goods trade-ins, directly driving both consumption and investment to form a virtuous cycle.

China's outstanding economic performance in the first three quarters of 2025 represents a systemic victory. It vividly illustrates three key facts. The transformation of growth drivers is bearing fruit. The transition from old to new engines of growth has reached a crucial inflection point, with new quality productive forces evolving from a rising star into a mainstay.

In short, China's economic growth story is turning a new page — from pursuing speed to pursuing quality, from factor-driven to innovation-driven growth. The doubling of its growth rate over the global average is not merely a numerical advantage, but a comprehensive lead in development model, industrial structure, and growth resilience.

The writer is a researcher at the National Academy of Development and Strategy at Renmin University of China.

The views do not necessarily reflect those of China Daily.