Durban, South Africa — China’s economic growth remains primarily driven by domestic consumption rather than a push to dominate global markets, according to Finance Vice-Minister Liao Min.
Speaking on July 18 during the Group of 20 policymakers’ gathering near Durban, Liao addressed concerns about China’s trade surplus, emphasizing that most of the nation’s production serves internal demand. “When there’s demand from abroad, China exports accordingly. This does not mean, however, that China is trying to dominate every market,” he said.
Recent figures show China’s GDP expanding by 5.3 percent in the first half of 2025, a pace Liao described as “in line with expectations” and a stabilizing force for the global economy at a time of heightened uncertainty. Economists have trimmed global growth forecasts for this year, citing the impact of U.S. tariff hikes introduced by President Donald Trump.
China recorded a goods-trade surplus of approximately US$586 billion in the first half of 2025, partly due to exporters accelerating shipments ahead of potential tariffs. Analysts expect export growth to ease in the coming months, but some project a record annual surplus exceeding US$1 trillion.
Liao noted that over the past four years, consumption has contributed an average of 56.2 percent to China’s GDP growth, up significantly from the 2016–2020 period. Domestic demand overall accounted for 86.4 percent of growth, underscoring the country’s shift toward an internal consumption model.
While U.S. officials have criticized China’s trade practices, citing an outsized manufacturing surplus, Liao rejected claims of overcapacity. “Just because China holds a large market share in certain products doesn’t mean it should be accused of overcapacity,” he said, adding that such arguments oversimplify the nation’s economic structure.
Beijing has responded to trade tensions by accelerating domestic consumption initiatives. The government doubled ultra-long special sovereign bond issuance to 300 billion yuan in 2025, targeting consumer subsidies for electronics, home appliances, and vehicles. More than half of these funds have already been used, spurring sales valued at roughly 10 times the subsidy amount.
Looking forward, China plans to expand service industries, advance green and digital sectors, and strengthen social safety nets such as pensions. These measures aim to sustain long-term consumption growth, ensuring economic stability despite global trade headwinds.
