Interview: Chinese economy shows resilience and potential: World Bank economist

by Xinhua Writers Yu Jiaxin, Ren Jun, Pang Yuanyuan

BEIJING, Dec. 15 (Xinhua) -- The World Bank has raised its 2025 economic growth forecast for China, the world's second-largest economy, by 0.4 percentage points in its latest update, compared with the projection released in June.

In an exclusive interview with Xinhua, Elitza Mileva, the World Bank's lead economist for China, said the upward revision was made because China's economy has demonstrated strong resilience this year and outperformed the World Bank's initial expectations at the start of the year.

China's GDP growth was 5.2 percent year on year in the first three quarters of this year. "This is quite resilient given that the economy is facing quite a few domestic as well as external challenges this year," Mileva said.

China's new fiscal and monetary policies have bolstered domestic consumption and investment, she noted, adding that the country's exports have remained resilient despite shifting global trade policies since the start of the year.

According to Mileva, proactive policies aimed at boosting household consumption, including raising pension benefits and providing childcare subsidies, are expected to strengthen the social safety net, reduce precautionary savings and exert a more sustainable impact on driving domestic consumption.

She said that the Chinese government's focus on building a unified national market and addressing unfair competition at the local level will shore up the private sector's confidence and investment appetite.

Underpinning the Chinese economy's resilience is the country's robust human capital and vibrant technological innovation, the economist said, noting that the investment China has made in education is of great significance.

The World Bank also noted that roughly one-third of the new foreign direct investment inflows into China have gone to high-tech sectors, reflecting foreign investors' growing interest in the country's advanced technology industries.

Commenting on the formulation of 15th Five-Year Plans at both national and local levels, she said high-quality development remains a top priority on China's economic and social agenda, with enormous opportunities emerging in consumption-driven growth, innovation-driven transformation and low-carbon development sectors.

"China has made this transition from very strong growth in past decades to a more moderate pace of growth today, but that pace of growth is more sustainable," she emphasized.

Mileva highlighted China's commitment to green and low-carbon transformation. The steady development of renewable energy and decarbonization in the power and heavy industrial sectors are expected to generate new growth momentum and employment opportunities, she said.

The World Bank also raised its forecast for China's economic growth in 2026 by 0.4 percentage points. She explained that the upward revision for next year reflects that this year's economic performance has exceeded initial expectations, with some growth momentum set to carry over into the coming year, while the effects of fiscal policies are also expected to underpin economic growth next year.

Mileva stressed that China's future growth potential is enormous, particularly given its room for productivity gains through innovation and improved resource allocation. She noted that this is crucial because of China's significant role in driving global economic growth.

"What happens in China is very important," said Mileva, adding that China plays a key role in global value chains and supply chains, and through its exports and active overseas investment, the country is bringing more technologies and expertise to the global stage. ■