Jiang Jinquan Paints a Promising Picture of China’s Economy

The Director of the Central Policy Research Office says China's GDP has shrunk against the U.S. in recent years only because of RMB depreciation, and its government debt is fine.

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May 29, 2025

How do China’s senior government officials assess the state and future of the country’s economy? Today, we present an address by 江金权 Jiang Jinquan, Director of the Central Policy Research Office (CPRO), an in-house research office of the Central Committee of the Communist Party of China (CPC). This influential office is responsible for providing policy recommendations and insights to matters of governance, spanning political, social, and economic realms. It is also responsible for drafting the ideological framework and key documents of the CPC’s major political events. Jiang, a full minister in the Chinese hierachy, in 2020 succeeded Wang Huning, current member of the Politburo Standing Committee who held the CPRO directorship from 2002.

Jiang’s article, originally published in Issue 2, 2025 of the CPRO-run journal 学习与研究 Study and Research, is based on remarks he made during an internal CPRO study session on January 22, 2025. In this piece, he unpacks Xi Jinping’s speech at the 2024 Central Economic Work Conference, China’s pivotal annual event for setting next year’s economic priorities and strategies.

Jiang’s published assessment of China’s economic accomplishment, reality, and outlook is not unexpectedly optimistic. Notably, he dismissed the recent widening economic gap in GDP between China and the United States. Solely attributing the decline of the Chinese economy to the U.S. in percentage terms, he brushed off relevant discussions as “hyping.” As far as we remember, this is perhaps the first time that a senior Chinese official has publicly commented on the issue. He also cited international studies that compare the Chinese and U.S. economies on purchasing power parity and show China as larger since 2016. Very few senior Chinese officials do that publicly.

This translation is being published later than we had hoped, but publicly available systematic evaluations of the CPRO director are indeed rare. It is also important to note that Jiang’s remarks were made before Donald Trump imposed tariffs on countries worldwide and on China.

—Zichen Wang & Yuxuan Jia

Jiang’s article is also available in the official WeChat blog of 人民论坛 People’s Forum, a magazine affiliated with the People’s Daily.

全面辩证看待我国当前经济形势 ——学习习近平总书记在中央经济工作会议上重要讲话的体会

Viewing China’s Current Economic Situation Comprehensively and Dialectically

Reflections on Studying General Secretary Xi Jinping's Important Speech at the Central Economic Work Conference

At the Central Economic Work Conference held at the end of 2024, Xi Jinping, General Secretary of the Communist Party of China (CPC) Central Committee, delivered an important speech. He provided a comprehensive review of the remarkable achievements of economic work in 2024, offered a sober assessment of the difficulties and challenges facing economic development, and distilled key principles guiding economic work.

General Secretary Xi pointed out that the economy has maintained overall stability and made steady progress, and that high-quality development has been solidly promoted. The country has steadily developed new quality productive forces, continued to deepen reform and opening up, orderly and effectively defused risks in key areas, safeguarded people's livelihood in a solid and vigorous manner, and made new solid strides forward in advancing Chinese modernisation.

However, the adverse effects of changes in the external environment have intensified, and the country’s economy still faces many difficulties and challenges, mainly insufficient domestic demand, operational difficulties in some enterprises, pressures on employment and income growth, and numerous hidden risks. At the same time, it is essential to recognise that the Chinese economy rests on a stable foundation, has multiple advantages, strong resilience, and great potential. The economic fundamentals that sustain long-term growth remain unchanged.

General Secretary Xi Jinping’s judgment on China’s economic situation is farsighted, marked by broad vision, sharp insight, and a commitment to dialectical thinking. We must align our understanding with the assessments and directions put forward by General Secretary Xi and the CPC Central Committee regarding the economy. With this in mind, I would like to share some reflections on my study of General Secretary Xi’s important speech, particularly on how we should view China’s current economic landscape.

1

When assessing China’s economic situation, it is important to consider both quantity and quality. Economic development is an organic unity of quality and quantity. General Secretary Xi pointed out, "We will better co-ordinate the effective promotion of quality and the reasonable growth in quantity, insist on winning with quality, and achieve qualitative change with the accumulation of quantitative change." At this conference, General Secretary Xi Jinping once again stressed that “we should uphold the unity of quality improvement and scale efficiency, fully leverage the advantages of our super-sized market and abundant application scenarios, foster more world-class enterprises and leading technologies, and ensure that quality improvement and quantity growth go hand in hand throughout the entire process of high-quality development.” In 2024, China’s economy achieved effective quality improvement alongside reasonable growth in scale, delivering a remarkable report card.

In quantitative terms, major economic indicators registered strong growth. In 2024, China's economic growth reached 5%, with the gross domestic product (GDP) exceeding 134.9 trillion yuan [18.7 trillion U.S. dollars]; grain output exceeded 1.4 trillion jin [840 billion kilograms]; foreign trade increased by 5%, with exports rising by 7.1%, accounting for about 14.2% of the global market share. At the same time, production and supply grew steadily, industry showed a steady upward trend, and the service industry maintained relatively rapid growth.

A growth rate of 5% is not low for an economy with a scale of over 130 trillion yuan. According to the forecast of the International Monetary Fund (IMF), the average economic growth rate of developed countries in 2024 is 1.8%, and that of developing countries is 4.2%, both lower than that of China. Among the world's major economies, China's actual economic growth rate remains the highest. In 2024, China’s contribution to global economic growth is expected to remain around 30%, reaffirming its role as a key driver and vital engine of the world economy.

In terms of quality, new quality productive forces are steadily advancing. Major achievements in scientific and technological innovation continue to emerge, with significant progress made in key fields such as integrated circuits, artificial intelligence, and quantum technology. The construction of a modern industrial system is accelerating; new industries, new products, and new business models are flourishing, while the intelligent and digital transformation of traditional industries is continuously promoted. The pace of green and low-carbon transformation has quickened, with China becoming the world’s first country to achieve an annual output of over 10 million new energy vehicles.

Looking at a longer timeframe, since the 18th CPC National Congress [in 2012], the country has won the critical battle against poverty. More than 70 per cent of the global population lifted out of poverty during this period were from China, making an outstanding contribution to global poverty reduction. Poverty alleviation is the most highly praised and widely recognised historic achievement of China on the international stage.

China is a pragmatic doer and active participant in tackling climate change, speaking with actions as well as words. In recent years, China has supplied 60 per cent of the world’s wind power equipment, 70 per cent of photovoltaic components, and over 70 per cent of key raw materials for power batteries. China's “new trio”— photovoltaics, lithium-ion batteries, and new energy vehicles—have become major export products for China, signalling the end of the era when Chinese goods were synonymous with low-end products.

Over the past decade, global costs for wind and solar power generation have fallen by more than 60 per cent and 80 per cent, respectively, with China playing a leading role in this transformation. These achievements are backed by a series of major breakthroughs in China’s scientific and technological self-reliance and strength. Altogether, they demonstrate a significant improvement in both the quality and structure of China’s economy.

2

When assessing China’s economic situation, it is important to consider both longitudinal and horizontal perspectives. Evaluations should not only involve longitudinal comparisons with China’s own past performance but also horizontal comparisons with other major economies worldwide. Only through such comprehensive analysis can a fuller understanding be achieved.

From 2013 to 2023, China’s economy maintained a medium-to-high growth rate, averaging 6.1 per cent annually, ranking among the top of the world’s major economies. This growth rate was significantly higher than the global average of around 3 per cent during the same period, with China contributing over 30 per cent annually to global economic growth.

In 2023, China’s economy grew by 5.2 per cent year-on-year, accounting for approximately 18 per cent of the global economy and firmly ranking second worldwide. Its growth rate not only exceeded the global average but also surpassed that of developed economies. By comparison, in 2023 the global economy grew by 3.3 per cent year-on-year, with the United States at 2.9 per cent, the Eurozone at 0.4 per cent, and Japan at 1.7 per cent.

In 2024, China’s economy continued to expand by 5 per cent, remaining above the projected average growth rate of 1.8 per cent for developed economies and 4.2 per cent for developing economies.

In recent years, some domestic and foreign media outlets and individuals have frequently hyped the so-called “widening economic gap between China and the United States.” However, the reality is that the economic gap between the two countries has been steadily narrowing. Although in 2023 China’s nominal GDP converted into U.S. dollars at the exchange rate stood at 64.5 percent of that of the United States—a decline for two consecutive years from the historical peak of 75.2 percent in 2021—this drop was mainly driven by the depreciation of the renminbi and elevated inflation in the United States.

In 2023, the renminbi depreciated by 8.4 per cent compared with its 2021 level. Calculated at the 2021 exchange rate, China’s nominal GDP in 2023 would have amounted to 70.5 per cent of that of the United States. The renminbi’s depreciation thus caused a “conversion loss” of six percentage points when China’s GDP was converted into U.S.-dollar terms.

Since 2021, inflation in the United States has intensified, with the GDP deflator reaching 7.1 per cent in 2022 and 3.6 per cent in 2023, significantly higher than China’s 1.8 per cent and –0.6 per cent over the same period. Using 2021 as the base year, China’s GDP in 2023 would be equivalent to 70.8 per cent of that of the United States.

According to World Bank data, when comparing real GDP measured in constant 2015 U.S. dollars—excluding the effects of price changes and exchange rate fluctuations—China’s GDP in 2023 was equivalent to 78.9 per cent of that of the United States, representing a 2.8 percentage point increase from 2021.

Furthermore, some institutions have employed another internationally recognised method, the purchasing power parity (PPP) method, which shows that China’s total economic output surpassed that of the United States in 2016. Since then, China’s share has continued to grow, reaching 1.27 times that of the United States in 2023.

Additionally, there are differences in the scope of GDP accounting between China and the United States. For instance, firearms and ammunition transactions, as well as the production and sale of cannabis, are legal and included in the United States’ GDP calculations; however, these activities are prohibited in China and therefore excluded from its GDP statistics. Consequently, nominal GDP figures alone cannot fully or accurately capture the true economic comparison between China and the United States.

3

When assessing China’s economic situation, it is important to consider both actual achievements and the conditions. In other words, one must understand the environment and circumstances in which these accomplishments were realised. In 2024, China’s economic development faced a complex and severe situation, marked by increased external pressures and mounting domestic challenges. The achievements attained are indeed hard-won. As the saying goes, 看似寻常最奇崛，成如容易却艰辛“What appears ordinary is most extraordinary; what seems easily achieved is actually the result of great hardship.”

From an external perspective, the crises in Ukraine and between Israel and Palestine remain unresolved. The world has entered a new era of turbulence and transformation. Unilateralism and protectionism are spreading, global economic fragmentation is intensifying, and economic globalisation faces significant headwinds. The adverse impacts of changes in the external environment on China have deepened.

In particular, the United States has persistently contained and suppressed China across various fields—including trade, investment, science and technology, and military affairs—emerging as the largest external obstacle to China’s economic development. Beyond imposing tariffs to hinder exports from China’s traditional industries, the United States has resorted to the “Entity List,” targeting a broad spectrum of sectors, ranging from next-generation information technologies, high-end computer numerical control (CNC) machine tools and robotics, to aerospace equipment, marine engineering machinery, and advanced ships; from advanced rail transit equipment, energy-saving and new energy vehicles, to power equipment, new materials, biomedicine, high-performance medical devices, and agricultural machinery—aiming to comprehensively contain the growth of China’s emerging industries.

Domestically, the “scarring effects” of the COVID-19 pandemic remain evident. Insufficient domestic demand, operational difficulties faced by some enterprises, and pressures on employment and income growth among the populace persist. Potential risks still exist to a considerable degree. In particular, the continued downward trend in the real estate market and the ongoing efforts to promote debt resolution have intensified short-term economic downward pressures, while also bringing about the necessary growing pains associated with economic transformation and upgrading. To some extent, this represents the inevitable cost of transitioning toward high-quality development.

In recent years, the CPC Central Committee has attached great importance to preventing and defusing risks associated with hidden local government debts and has made positive progress in this regard. Some Western scholars have exaggerated concerns over China’s debt risks. In reality, China’s government debt-to-GDP ratio is relatively low. This issue can be analysed from two perspectives:

First, regarding fiscal deficits, China has consistently maintained its deficit-to-GDP ratio below 4 per cent, and in most years below 3 per cent. According to the IMF, the global deficit-to-GDP ratio surged from 3.6 per cent before the pandemic to a historic high of 9.5 per cent in 2021, before easing to 5.5 per cent in 2023. In 2023, the deficit-to-GDP ratios for developed countries and emerging markets were 5.6 per cent and 5.5 per cent, respectively—both significantly higher than China’s level.

Second, from the perspective of government debt, China’s total government debt-to-GDP ratio, including local government financing vehicles (LGFVs) debt, stands at about 70 per cent, with central government debt totalling approximately 30 trillion yuan [4.1 billion U.S. dollars]. According to IMF estimates, global government debt expanded sharply since the pandemic, with the debt-to-GDP ratio rising from 84.2 per cent in 2019 to a record high of 99.4 per cent in 2021, before declining to 93.2 per cent in 2023. Within this, developed countries reported an overall debt-to-GDP ratio of 111 per cent, while developing countries stood at 69 per cent.

Moreover, the majority of China’s government debt is domestically held and largely backed by corresponding assets, which helps keep associated risks relatively low. The CPC Central Committee’s strong emphasis on debt management does not stem from excessively high debt levels, but rather from irregularities in bond issuance by some local governments, which have given rise to significant hidden debt risks. This reflects a proactive approach to risk prevention.

It must be recognised that debt is a double-edged sword: it can be an asset when used prudently, but a liability when mismanaged. Therefore, effective management and use of debt funds are essential. In fact, China’s central government still has fiscal space to increase its deficit and debt levels.

4

When assessing China’s economic situation, it is important to consider both the current state of development and the long-term trend. Economic growth is influenced by a variety of factors, and short-term fluctuations are a normal manifestation of economic dynamics. In recent years, China’s economy has faced numerous internal and external challenges, leading to some volatility. Nevertheless, the fundamental trend and underlying conditions for sustained long-term improvement remain unchanged.

First, the Party's leadership and the socialist system with Chinese characteristics enable timely analysis, decision-making, and deployment at critical moments and important junctures, ensuring that the ship of the Chinese economy rides the waves and sails forward steadily.

For example, since the third quarter of 2024, faced with new circumstances and challenges in economic operations, China has promptly introduced a package of targeted incremental policies, delivering a coordinated policy mix. According to foreign media reports, these measures represent the most powerful economic regulation efforts China has implemented in recent years, not only addressing immediate challenges but also laying the groundwork for future development through structural reforms.

Second, China has the advantage of a comprehensive industrial system, encompassing all categories in the United Nations industry classification system, with the output of more than 220 industrial products ranking first globally. According to a research report released by the Organisation for Economic Co-operation and Development (OECD), Chinese industries account for about 50% of the top-10 choke points across sectors, both upstream as suppliers and downstream as buyers. As a result, many enterprises are deeply reliant on China.

Although some foreign media hype the so-called “outflow of foreign investment from China” or the “relocation of China’s industrial chain,” many enterprises have repeatedly returned to China. Meanwhile, the United States has shifted from a real economy to a virtual one, favouring financial speculation and “making fast money,” which has contributed to the contraction of its manufacturing sector. It is now awakening to the urgent need to revitalise the real economy, particularly manufacturing.

Third, China enjoys the advantage of a super-sized market. With a population of over 1.4 billion and more than 400 million middle-income consumers, years of rapid economic growth have created this super-sized market. The economies of scale bring relevant enterprises and industries with efficiency advantages, which can quickly translate into cost advantages and competitive strengths. The rapid rise of China’s “new trio” enterprises and products exemplifies this trend. As China approaches entry into the ranks of high-income countries, the advantages of its super-sized market, driven by upgraded demand, will become even more pronounced, further strengthening its role in supporting economic development.

Fourth, China enjoys the advantage of abundant human resources. By the end of 2024, China’s working-age population will exceed 800 million, with a labour participation rate ranking among the highest of major economies. The education level of the population continues to improve, as the average years of schooling for the working-age population rise to 11.21 years in 2024, while the number of university-educated individuals exceeds 250 million. This ongoing enhancement in labour quality has helped transform China’s “demographic dividend” into a “talent dividend.” Currently, China possesses the world’s largest total number of research and development personnel and the most comprehensive talent pool globally. China’s Global Innovation Index ranking has risen from 34th in 2012 to 11th in 2024, establishing it as one of the fastest-growing economies in innovation capacity.

Fifth, China possesses the advantage of scientific macroeconomic regulation. The country has fully leveraged the strategic guidance of national development planning and adhered to major strategies such as innovation-driven development, coordinated development between regions, and integrated urban and rural development. At the same time, reforms in fiscal, taxation, finance, and science and technology sectors have been coordinated and advanced to strengthen the consistency of macroeconomic policies, promote high-quality economic development, and ensure that no systemic risks arise. Scientific macroeconomic regulation and effective economic governance transform China’s institutional strengths into effective governance, ensuring steady progress of the national economy.

Meanwhile, the CPC Central Committee, with Comrade Xi Jinping at its core, has consistently reflected on its experiences and deepened its understanding of economic development laws. These insights are systematically summarised at each year’s Central Economic Work Conference. At this year’s conference [2024], it was further emphasised that several important relationships must be properly coordinated.

First, it is essential to necessary to coordinate the relationship between an efficient market and an effective government to form an economic order that is both dynamic and well-regulated. Second, the relationship between aggregate supply and demand must be properly managed to ensure the smooth circulation of the national economy. Third, it is necessary to coordinate the relationship between fostering new drivers and upgrading old ones, and promote the development of new quality productive forces in light of local conditions. Fourth, it is imperative to coordinate the relationship between optimising incremental resources and making good use of existing resources to comprehensively improve the efficiency of resource allocation. Fifth, the relationship between enhancing quality and expanding total output must be coordinated to lay a solid material foundation for Chinese modernisation.

These theoretical generalisations not only enrich the Xi Jinping Thought on Economy but also provide important guidance for current economic work, ensuring that the ship of the Chinese economy rides the waves and sails forward steadily.

From a practical standpoint, China has substantial room for growth. Starting with consumption, significant potential exists in service-related sectors such as elderly care, childbirth, vocational training, and information services. For example, in 2023, China’s elderly population aged 60 and above neared 300 million, accounting for 21.1 per cent of the total population. This signals vast potential for the “silver economy.” If each of these elderly individuals were to increase their annual spending by 1,000 yuan [138 U.S. dollars] on average, it could generate approximately 300 billion yuan [41.6 billion U.S. dollars] in new consumption.

Taking skills training as another example, China currently has around 200 million skilled workers, but only 30 per cent are classified as highly skilled, well below the 40 to 50 per cent typical in developed countries. By enhancing investment in vocational training and fully leveraging its role as a talent reservoir, China can simultaneously ease employment pressures, improve workforce skills, and support the development of industries.

Turning to investment, the issue is not a lack of space for investment but rather how to precisely address shortcomings, improve efficiency, and strengthen long-term momentum. For example, in infrastructure, China’s per capita railway and highway mileage is only between one-sixth and one-half of that of developed economies such as the United States, Japan, and the EU. Over the next three years, approximately 5,000 reservoirs will require hazard elimination and reinforcement.

In industrial development, sectors including integrated circuits, artificial intelligence, quantum technology, and biomanufacturing urgently need to overcome U.S. and Western technology blockades. Investment in key industrial equipment renewal could reach around 5 trillion yuan [694 billion U.S. dollars] annually.

In people’s livelihoods, high-quality and universal supplies in education, healthcare, and elderly care remain insufficient. Over the next five years, construction and renovation of pipeline networks—including city gas, water supply and drainage, and heating—will total about 760,000 kilometres.

In summary, China’s investment space remains very large.

5

When assessing China’s economic situation, it is important to consider both the challenges faced and the measures taken to address them. Marxism teaches that contradictions exist in the development process of all things; they are universal and persistent. Society progresses through the resolution of these contradictions. The Party has always advanced by continuously overcoming hardships and challenges. [As Mao Zedong’s poem says] 雄关漫道真如铁 “Idle boast, the strong pass is a wall of iron; with firm strides we are crossing its summit.” With scientific decision-making, calm responses, courage to struggle, and united efforts, we will surely overcome the difficulties and challenges ahead.

The same principle applies to the economic field. Since entering the new era, has there ever been a year without difficulties or challenges in economic development? The Party Central Committee, with Comrade Xi Jinping at its core, has never shied away from contradictions or hidden problems but has confronted and resolved them head-on. For instance, since the third quarter of 2024, the CPC Central Committee has decisively introduced a package of incremental policies, demonstrating a clear problem-oriented approach.

General Secretary Xi Jinping’s important speech at the Central Economic Work Conference provided a systematic blueprint for addressing external challenges and resolving contradictions and issues in China’s economic operations. The speech clarified the overall strategy, policy framework, and key tasks, offering a set of targeted solutions.

At the macro level, General Secretary Xi called for more proactive and impactful macroeconomic policies, including a more active fiscal policy, a moderately accommodative monetary policy, a well-coordinated policy mix, and focused efforts to optimise the macroeconomic environment.

Specifically, General Secretary Xi Jinping has proposed nine key tasks accompanied by a series of major, highly targeted, and practical initiatives.

In response to the pressing issue of insufficient demand, efforts should be made to vigorously stimulate domestic demand, especially consumer demand. A special campaign dedicated to stimulating consumption should be implemented. Investment from the central government budget should be appropriately increased into major national projects and programs and security capacity in key areas.

To tackle deep-rooted obstacles and external challenges hindering development, reforms must be unswervingly deepened and opening-up resolutely expanded. Efforts should be made to give full play to the driving role of economic system reform and ensure that landmark reform measures are effectively implemented.
Regarding bottlenecks in industrial transformation and upgrading, efforts should be made to drive the development of new quality productive forces through scientific and technological innovation. The country should cultivate innovative enterprises with tiered support. Digital and green technologies should be actively used to transform and upgrade traditional industries.
In response to enterprises’ concerns and demands, efforts should be made to strengthen policy support and optimise regulation and services, address rat-race irrational competition, regulate behaviours of local governments and enterprises, and maintain a fair and just market environment and a clean business environment.
To address risks in key areas, China has announced the strongest debt relief measures in recent years, with policy funding totalling 12 trillion yuan [1.6 trillion U.S. dollars]. It is essential to continuously ratchet up work to reverse the downturn of and stabilise the real estate market, fostering a new development model for the real estate sector. Meanwhile, the conference called for work to address risks in local small and medium-sized financial institutions in a prudent manner, and joint and coordinated efforts by central and local governments to crack down on illegal financial activities.
To boost coordinated regional development, the meeting called for giving full play to the synergy of the coordinated regional development strategy, major regional strategies, and the functional zoning strategy, while actively fostering new growth poles. Industrial collaboration between the eastern, central, western and northeastern regions should be deepened, while maritime economy and bay area economy should be actively boosted. Efforts should be made to pursue coordinated progress in new urbanisation and all-around rural revitalisation and promote integrated urban-rural development.

As long as these key tasks and major initiatives are implemented and put into practice, the outstanding contradictions and problems facing China’s economic development will surely be resolved, and the economic and social development goals for the year will be successfully achieved.

Drawing on the above five dimensions, China’s economic strength is steadily increasing, while its competitiveness and international influence continue to grow. The future remains bright and promising. We must align our understanding with the judgment of the CPC Central Committee and General Secretary Xi Jinping on economic development, strengthen our confidence in victory, and maintain strategic resolve. We must do our own job, earnestly implement the major decisions and arrangements of the Party Central Committee and General Secretary Xi Jinping, concentrate on fulfilling our responsibilities, and contribute wisdom and strength to building China into a great modern socialist country in all respects and advancing the great rejuvenation of the Chinese nation on all fronts.