Market & Business Opportunities in China (2023-28)

Since the start of its economic reform, China has maintained a double-digit growth rate for over thirty consecutive years. Starting from a point of parity with Canada in 1980, it swiftly rose to become the second-largest economy in the world and has continued to lead the economic development of Asia throughout the 2020s.

During China’s period of opening up, its vast economic potential, low-cost labor, and abundant natural resources also stimulated the development of surrounding economies and the world at large. For the first few decades, China absorbed significant labor demand from advanced economies and spread manufacturing across the country, universalizing education and vocational training while promoting domestic scientific research and innovation. Between 2023 and 2024, China is set to surpass the United States to become the largest retail market in the world.

Despite facing numerous setbacks in manufacturing recently due to causes such as the US-China trade war, the pandemic, zero-COVID policy, and the trend of companies diversifying their supply chains, China remains—and will continue to be—the most important manufacturing hub globally. While the trend of regional manufacturing will become increasingly prominent in the future (for example, the US will focus on domestic production for key industries while shifting other manufacturing needs to Mexico, the EU will move to Eastern Europe, and India will increase its investment in domestic manufacturing), these countries will continue to rely heavily on China. Moreover, the enormous demand from China’s 1.4 billion citizens and increasing geopolitical tensions have pushed the Chinese government to focus more on self-sufficient development.

However, challenges like factories struggling to find workers, youth unemployment rates exceeding 20%, and an economic downturn compounded by the prospect of 12 million new graduates this year, have driven China’s manufacturing industry to increase its investment in productivity-enhancing technologies, such as industrial automation, artificial intelligence, and operational improvements. Although we anticipate the effects of past subsidy policies for stimulating industry development to be limited due to the conservative fiscal situation of China’s provincial governments, the Chinese government’s increased emphasis on economic security ensures that breakthroughs will be made in related industries.