China
China’s Economic Shift Encourages Global Rethinking
China is shifting from an export-led growth model to one focused on domestic consumption and stabilization, marking a strategic response to international tensions and prioritizing fiscal stimulus and market intervention.
Economic Shift Towards Domestic Consumption
China is undergoing a significant economic transformation, moving away from its export-driven and investment-heavy growth model to focus on domestic consumption and internal stability. This transition reflects a broader geostrategic recalibration in response to a polarized global environment and the escalating tensions between the U.S. and China.
The Two Sessions and New Economic Priorities
The changes were especially evident during the Two Sessions in March 2025, where the Chinese People’s Political Consultative Conference and the National People’s Congress convened. The government is emphasizing domestic demand, financial market stability, and unprecedented fiscal stimulus, marking a departure from prior fiscal discipline.
Aggressive Fiscal Strategy for Stability
A key aspect of this new approach is lifting the longstanding 3% fiscal deficit ceiling, now targeting 4%, the highest in modern Chinese history. This strategy prioritizes growth over austerity, with state interventions aimed at stabilizing crucial sectors like real estate and finance. Proposals, such as Liu Hanyuan’s suggested stabilization funds, reflect this proactive stance to manage financial risks effectively.
Source : China’s economic pivot invites global recalibration
