Market & Business Opportunities in China (2023-28)

Last Updated: May 29, 2023

Sector Indicator

While China’s economy continues to hold significant potential, the ongoing disruptions and looming macroeconomic risks have somewhat tempered its prospects.


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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.

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GDP|Unit: 100 Million Yuan
GDP Growth Rate|Source: IMF

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Macroeconomic Perspective

In light of current projections, China’s economy is expected to grow by at least 5.6% in 2023, primarily propelled by the rapid normalization in consumer spending. Following a trajectory set during the global pandemic, the rebound in household consumption still holds considerable potential, with an expected continuation for at least another quarter. Notably, savings rates have veered towards pre-pandemic norms in Q1, however, they still remain slightly above that trend. The burgeoning consumption primarily results from a rebound from the suppressed levels caused by the zero-Covid policy. However, it’s important to bear in mind that this surge in consumption may soon decelerate. Sustained consumption beyond Q2 hinges on factors such as heightened income growth, increased confidence levels, and a reduction in excess savings.

In looking further ahead, it seems improbable that China will achieve a growth rate exceeding 4% in the stretch from 2026 to 2030. Post-2030, the economic landscape appears even more daunting, primarily due to an aging population and a continuous decline in the number of working-age citizens.

  • Data:OOSGA.org
  • Analysis:Project Team
Author: Project Team

Our project team combines internal groups, external experts, and partners to assist clients in exploring market opportunities and implementing market entry and growth.

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