Experts are maintaining an optimistic outlook on China's future trajectory as it navigates a crucial phase of economic transition.
The positive perspective is grounded in a robust new growth engine, characterized by a burgeoning middle class, evolving consumption patterns, substantial greenfield investment, and the integration of artificial intelligence and data into the economic landscape.
Official figures released on Wednesday revealed that the Chinese economy exceeded expectations by growing 5.2 percent in 2023, surpassing the government's set target of 5 percent.
Notably, consumption emerged as a significant growth driver.
Data from the National Bureau of Statistics revealed final consumption contributed 82.5 percent to GDP growth in 2023, with retail sales of consumer goods up 7.2 percent year-on-year to more than 47 trillion yuan ($6.6 trillion).
Speaking at a session during the World Economic Forum in Davos, Kevin Rudd, Australia's ambassador to the United States, emphatically dismissed the notion of "peak China" and underscored the significant role of the Chinese consumer.
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"The Chinese consumer is the best guarantor of China's economic future. So long as the Chinese consumer has confidence in the future, the economy will continue to grow reasonably well – that's a core fact," he said.
"Remember, the scale of the Chinese consumer market is unprecedented in global economic history. I don't accept 'peak China' at all. I think it's intellectually and analytically flawed because of the untapped potential of Chinese consumer demand."
Premier Li Qiang, in his Davos address, highlighted China's supersized market with its rapidly unlocking demand. The middle-income bracket, currently comprising more than 400 million people, is projected to double, to 800 million, in the next decade.
Lu Minfang, CEO of Mengniu Dairy, a leading Chinese dairy company, shared insights into three key factors contributing to China's economic optimism during an interview with China Daily in Davos.
He emphasized the rapid expansion of the middle class as a massive consumer market. The second factor, according to Lu, involves strategic investments in green initiatives, data and AI, which are identified as the new engines driving economic growth. The third factor is attributed to the hard work of the Chinese people, who position China as a global leader in productivity.
Expressing confidence in China's commitment to carbon reduction for addressing climate change, Lu said: "In the future, even in industries like dairy, I can confidently say that when you calculate CO2 emissions per kilo of milk, China is going to be the lowest."
Lu further underscored the prevalent desire among the Chinese population for an improved quality of life, foreseeing advancements in food quality, nutrition and overall well-being. While acknowledging existing constraints in infrastructure, healthcare and education, he expressed his belief that the government is actively addressing these challenges.
"Once these issues are resolved, the release of buying power from Chinese consumers will propel market innovation and lead to enhancements in product quality," Lu said.
Vivian Jiang, chair of Deloitte China, added her optimistic perspective, highlighting the net-zero economy as a catalyst for opportunity.
"The consumption behaviors of younger generations will be very different," she said. "And they will create many opportunities, whether from service consumption or any other areas, such as entertainment, outdoor sports, pet economies."
Jiang said she sees a multitude of possibilities arising from the unique preferences and lifestyles of the younger demographic.
Taking a digital market perspective, Jiang emphasized the transformative potential of technology, stating: "China probably has the biggest market for user cases … there is a place for businesses to test the commercial viability of those innovations."
Ben Cavender, managing director of the China Market Research Group, highlighted China's ongoing economic transition after two decades of consistent high growth driven by government-led initiatives.
"Investments in infrastructure, exports and real estate all made sense from a policy perspective as there were clear, easy gains for the economy and for the quality of lives of everyday Chinese," he said.
As of 2024, the economic landscape has become more intricate, prompting Cavender to note that many previously effective growth strategies have been implemented.
Recognizing this, he said the Chinese government is adopting a more measured approach to economic reform.
Looking ahead, he suggested China is poised to secure a global leadership position in industries with substantial economic potential during the next five decades.
"So, it is likely that we see economic support targeted at industries with room to scale, like the auto industry, semiconductors, or renewable energy. It would also be good if there is deeper support for small, private enterprise as this ultimately will be where most job creation happens in an advanced economy," he added.