China's annual "two sessions" are being held in Beijing from March 4 to 11. The Chinese Premier Li Qiang delivered the government work report on March 5, stating that the growth target of GDP in 2025 is around 5%.
"China's around 5% GDP growth would be a realistic target, if there isn't a major disturbance from trade wars across the world", noted Harold James, Professor of History and International Affairs at Princeton University and the official historian at the International Monetary Fund (IMF) in a recent exclusive interview with GDToday.
China's rising contribution to global economy
Since China embraced the opening-up policy in 1978, the country has become the main trading partner of over 150 countries and regions, with its GDP in 2024 reaching nearly 135 trillion yuan, contributing some 30% to global economic growth.
Nonetheless, China has long been underrepresented in international institutions, the IMF official historian stated, adding its quota in the IMF hasn't reflected the country's importance in the world economy.
He reflected on the 2008 global financial meltdown, which particularly affected North America and Europe, but had less effect in Asia and South America.
"China was the big engine that got the world out of the difficulty. There was a tremendous Chinese fiscal boost, a 4 trillion renminbi program. The Europeans and the Americans were exporting to China," Prof. James noted.
There was the implicit idea that China would be rewarded with a greater share and influence in international financial institutions.
However, that took a very long time. Prof. James explained that every time there's a quota increase in the IMF, it requires going through the U.S. Congress. The process gets held up and is very slow.
Prof. James lauded the Belt and Road Initiative (BRI) that China launched in 2013, noting that the initiative offers a different type of globalization, that is, in some ways, more inclusive.
Last year, the share of countries jointly building the BRI in China's foreign trade (imports and exports) exceeded 50% for the first time.
"You then have new institutions, the Asian Infrastructure Investment Bank and the New Development Bank, that are parallel to the Bretton Woods institutions," added the IMF official historian.
"At a moment when multilateralism looks as if it's under threat, above all because of the actions of the United States, we need to think about ways in which the multilateral institutions can really be strengthened and made more effective," Prof. James warned.
In 2024, China's total goods trade increased by 5 percent year-on-year to reach 43.85 trillion yuan. The country has maintained its position as the largest in goods trade for 8 consecutive years. Its services trade amounted to a record high of 7.5 trillion yuan, in terms of US dollars, exceeding USD 1 trillion for the first time.
A realistic target amid a possible trade war worldwide
"We're currently in a little bit of uncertainty because we've just had these big Trump tariffs," noted Prof. James.
The US President levied another 10% tariff against China on March 4, following the 10% tariff imposed in early February. His 25% tariff against Canada and Mexico came into force on Tuesday after a 30-day pause, which, as Prof. James said, "produced a big market reaction."
Given the uncertainty hanging over all countries, Prof. James worries about a possible global trade war.
The IMF official historian detailed his concerns, such as the US's move to pressure Europe to take the same measures.
"People are worried there as well about right-wing politics and parties doing well in de-industrialization. They may see the need for a similar response," he added.
For all the concerns, Prof. James underscored that there would be a silver lining for China — the waxing role of new and high-tech sectors of the Chinese digital economy.
He cited the example of DeepSeek, a Chinese AI startup founded by Liang Wenfeng, a 39-year-old programmer born in Guangdong's city of Zhanjiang, which gained worldwide attention earlier this year due to its large language models and low costs.
"The big success of DeepSeek in producing an equivalent to OpenAI with a much lower level of investment required indicates how this technology is going to be really transformative, but doesn't necessarily require the enormous investments characteristic of the capacity of the American capital market to finance these large investments," noted Prof. James.
AI is going to be useful in terms of applications in other domains, as Prof. James projects, such as in pharmaceutical discovery, medical technologies, as well as business infrastructure.
"These are not areas that require enormous amounts of investment, but require a capacity to change and to be open to new ideas and new ways of organizing." In the view of Prof. James, China indeed has great advantages in this regard.
Reporter | Zhang Ruijun
Script | Zhang Ruijun
Video | Ou Nanying
Poster | Cai Junru
Editor | Ouyang Yan, Yuan Zixiang, James, Shen He
