Tech-driven consumption in growth focus

China is accelerating a shift toward a new growth model anchored in tech-driven domestic consumption as geopolitical tensions and technological disruption reshape the global economic landscape, officials, business leaders and economists have said.

They made the remarks on Wednesday at the World Economic Forum Annual Meeting in Davos, noting that such a model of sustainable growth is expected to not only reshape global economic expansion but also to create broader development opportunities worldwide.

Zhu Min, a member of the Senior Expert Advisory Committee, China Center for International Economic Exchanges, said China is entering a critical phase of transformation as it moves away from traditional growth drivers toward a model centered on technology, consumption and productivity gains.

Over the next five years, China is expected to place greater emphasis on technology as an important engine of growth, with artificial intelligence playing a central role, said Zhu, who was also a former deputy managing director of the International Monetary Fund.

According to Zhu, while the United States remains strong in fundamental research, China has developed distinct advantages in applying AI technologies across industries, particularly through open-source and cost-effective models. "China emphasizes application — vertical use in all sectors," he said, noting that such models could find broad acceptance globally.

Used to be defined only by affordability, "'Made in China', over the next 20 years, will be cheap but good and high-tech," Zhu said.

Zhu also stressed that strengthening domestic demand will be essential to sustaining growth. According to the National Bureau of Statistics, the contribution rate of final consumption expenditure to GDP growth reached 52 percent in 2025.

The focus is increasingly on the domestic market, with boosting consumption seen as essential to ensuring that economic growth is firmly anchored in domestic demand, he said.

The strategy outlined by Zhu is already visible in the actions of leading domestic companies, which are turning technological innovation into tangible consumer growth.

With about 700 million annual active customers in the fourth quarter of 2025, Chinese e-commerce giant JD said there remains significant room to boost consumption.

According to JD, products with real AI capabilities — such as robots and smart glasses — are emerging as major new engines of consumption, with sales in the two categories tripling and rising tenfold year-on-year in 2025, respectively.

"Sales of robots were constrained by supply. Otherwise, growth would have been even stronger," said Sandy Xu Ran, CEO of JD. "AI function is no longer a nice-to-have feature. It's a must-have core product value to drive consumption and growth in the retail industry."

To keep pace with evolving consumer demand, Xu said the company works closely with brand manufacturers to develop C2M (consumer-to-manufacturer) products that can quickly capture emerging consumption trends.

The company has also invested nearly 30 billion yuan ($4.1 billion) in rural markets to expand logistics and infrastructure in towns and villages, enabling faster and more reliable delivery services and supporting broader consumption growth.

"Growth momentum is increasingly coming from smaller cities and rural areas rather than major metropolitan centers," said Dong Junfeng, chairman of China UnionPay.

This trend reflects the role of digital infrastructure, logistics and mobile payments in broadening access to consumption, he said.

Eswar Prasad, a professor at Cornell University, said China's efforts to rebalance and restructure its economy are significant not only for China itself but also for the global economy, given the country's role as a major contributor to global growth and trade.

He also said that, as a major economy leading the world in both GDP and trade volume, it is a logical and natural progression for the renminbi to play a greater role in international finance and become an important reserve currency.

However, this would require further progress in areas of capital account openness and regulatory frameworks that inspire confidence among domestic and foreign investors, Prasad said.

While China has taken steps to open its economy through various connectivity and market access measures, the key issue, he said, is whether investors believe these measures are durable and that China will remain open over the long term.

yinmingyue@chinadaily.com.cn