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Where does China’s production capacity come from?

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By Zhong Caiwen, People’s Daily

China’s production capacity is deeply rooted in the country’s vast market.

China is a developing country with a population of over 1.4 billion. The fundamental purpose of its production is to meet the ever-growing expectation of the people for a better life.

Since the reform and opening up, China has transitioned from a planned economy to a socialist market economy, which has boosted production in different sectors and enhanced its supply capabilities.

As China’s economy continues to grow steadily and with the incremental upgrading of Chinese industries, the potential of China’s domestic demand has been consistently expanding and unleashed, which will enhance production capacity in a cycle of mutual reinforcement.

China boasts a large and steadily expanding middle-income group, with per capita GDP surpassing $12,000, creating a huge consumer market.

In 2023, China’s total retail sales of consumer goods exceeded 47 trillion yuan ($6.5 trillion), with final consumption expenditure contributing 82.5 percent to economic growth. Consumption has become the main engine driving economic growth and the primary driver of China’s expansion of production capacity.

Over the past few years, China has been the world’s largest consumer of automobiles, home appliances, clothing, and jewelries, among others. This wouldn’t have been possible without massive domestic production capacity, as relying solely on imports wouldn’t have been enough.

Technological innovation and enhanced production efficiency are the driving forces of China’s production capacity.

Innovation serves as the engine of productivity. China adopts the innovation-driven development strategy and keeps expanding investment in scientific and technological innovation. It ranks second in the world in terms of total R&D investment. A total of 679 Chinese companies were listed among the world’s top 2,500 R&D investors last year.

Technological innovation has enhanced China’s production efficiency and forged more comparative advantages. In recent years, China’s traditional top three products, or the “old three” — mobile phones, computers and home appliances, and three major tech-intensive green products, or the “new three” — new energy vehicles (NEVs), lithium-ion batteries and photovoltaic products, have gained widespread popularity in the global market. This success is attributed to the continuous technological innovation and efficiency improvements in the extensive and specialized industries in China, along with the unwavering commitment to excellence by Chinese entrepreneurs.

It is particularly important to see that China is the only country in the world that possesses all the industrial categories in the United Nations industrial classification. By harnessing the well-established industrial ecosystem and leveraging market dynamics, China can quickly transform technological innovation achievements into high-quality production capacity.

A Bloomberg article said that the global energy transition is largely attributed to China’s provision of low-cost and clean products.

China is embracing the new round of sci-tech revolution and industrial transformation worldwide and has no intention of criticizing or suppressing other countries that are leading in areas such as artificial intelligence, commercial aerospace, and low-orbit satellites. Instead, China is genuinely committed to learning from others with an aim to promote scientific and technological development through mutual learning and exchanges.

Similarly, developed countries should embrace China’s technological advancements in areas like new energy with fairness and openness, keeping in mind the benefits of all humanity.

A large portion of China’s production capacity is attributed to multinationals.

Foreign-invested enterprises have played a significant role in the growth of China’s manufacturing. As China becomes more integrated into the global economy, many foreign enterprises have chosen China as their primary production base, producing goods for sale on a global scale. Among them are many American companies.

For instance, the remarkable success of Apple as the second most profitable and highest-valued company in the world can be largely credited to the dedicated Chinese workers and efficient Chinese enterprises along its supply chain. Apple has announced to expand its R&D labs in China to better support its production line.

Tesla produced over 1.84 million new energy vehicles last year, with half of them being manufactured in its Shanghai Gigafactory. Tesla’s exports from China account for nearly 30 percent of Chinese exports of the NEVs.

Multinationals often follow a typical approach: making decisions at headquarters, manufacturing products in China, distributing them in global markets including China, and repatriating the profits generated to their home countries. Such business model can lead to win-win outcomes for all stakeholders.

By launching more important projects in China in the coming future, particularly in industries such as chemistry and the NEVs, multinationals are set to see more improvements in their competitiveness and production capacity.

The growth of China’s production capacity is credited to the combined efforts of an efficient market and a proactive government.

Throughout the history of industrial development in developed countries, successful industrial upgrading relied on both market dynamics and government strategies to guide and support industries.

For instance, the rapid economic growth of countries like Japan, Germany, and South Korea after World War II was largely a result of government assistance for key industries. Industrial policies have been a longstanding practice in the United States, with the CHIPS and Science Act alone providing over $52 billion in subsidies.

Since the reform and opening up, China has drawn lessons from developed countries and used strong domestic demand to drive economic growth. By directing the allocation of resources through industrial planning, China has been actively developing a modern industrial system.

Since the accession to the World Trade Organization, China has consistently complied with the subsidy-related rules and developed its production capacity within a market economy environment.

China’s industrial policies never violate market principles. China does not seek to exclude competition with other countries or unreasonably favor its own industries. Instead, China aims to continuously improve marketization levels and adopt tailored industrial policies that suit local conditions. This approach allows for orderly competition among industries, ultimately achieving an equilibrium between supply and demand.

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A living testimony about MKA: The Aondoakaa that I know Written By Brahms Tor-Ikuan

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My people of Benue State,

I am not speaking to you today as a politician. I am speaking as a brother whose family was held up by Chief Mike Kaase Aondoakaa, MKA, when we had no one else to hold onto.

My elder brother, Verem Ukaa-Ikuan, was not just my blood. He was a very dear and close friend to Chief MKA. When my brother fell ill and was diagnosed with liver damage caused by poisoning, MKA didn’t treat it as someone else’s problem. He took it on as his own.

He worked closely with Verem during his time as Attorney General of the Federation, and when the sickness came, he moved immediately. Searches were conducted, and Apollo Hospital in India was earmarked for a liver transplant. Every travel arrangement was made personally by Chief MKA.

But we hit a wall. Verem was too weak to fly a long commercial flight. Only an air ambulance could get him to India alive. At that time, there was only one functional air ambulance in the entire country, owned by Julius Berger. It was completely out of reach for even the most high-profile citizens.

Chief MKA went all out. He did not give excuses. He did not delay. He used every connection and every ounce of influence he had to secure that air ambulance for my brother.

On the day it was secured, Barr. Terna Yaji, his Senior Special Assistant, called me a few minutes after 6pm. He told us to prepare Verem for departure and take him to Makurdi airport very early the following morning. I informed him, my brother passed on at exactly 6 o’clock a few minutes ago. I told Barr. Terna Yaji, and I saw a devastated MKA.

During the burial, Chief MKA was out of the country on national assignment. He was pained that he could not be there physically. His entire team, led by the late Onov Tyuulugh, represented him fully. And his message to us at the burial has never left me:

“If death were law, as the Attorney General, a law would have been made no matter what to ensure Verem will just not die but live forever.”

That is who Mike Kaase Aondoakaa is when nobody is watching. He does not abandon his people. He does not forget. He stood with our family then, and he has stood with us till date.

Now he is asking for the chance to govern Benue State.

Benue needs a governor with a heart like that. A governor who fights for you even when there’s no political gain. A governor who sees you as family, not as a vote.

I am standing with Chief Mike Kaase Aondoakaa for Governor of Benue State.
For compassion that moves to action.
For loyalty that does not fade.
For leadership that proves itself in the darkest hour.

Join me. Let us give Benue a leader who has already shown what he will do for us.

God bless Chief Mike Kaase Aondoakaa.
God bless Benue State.

Brahms Tor-Ikuan, a beneficiary of MKA’s benevolence writes from Makurdi

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China-U.S. relations cannot return to past, but can move toward better future

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By Guo Jiping

At the invitation of Chinese President Xi Jinping, U.S. President Donald Trump will pay a state visit to China from May 13 to 15.

After many twists and turns, China-U.S. relations have arrived at a new historical juncture. The year 2026 carries special significance for both countries. China is embarking on its 15th Five-Year Plan period (2026-2030), while the United States celebrates its 250th anniversary. 

Amidst increasing global uncertainty and volatility, the international community looks to Beijing, hopeful that this high-level engagement will offer clarity and stability for the future trajectory of China-U.S. relations.

Observers note that over the past decade, the relationship has weathered two significant periods of strain. The first began in 2018 with the U.S. initiation of trade tariffs against China. Stabilization was achieved only after extensive dialogue and complex interactions spanning several years. The second period of tension occurred more recently in 2025. Remarkably, the cycle from rising friction to renewed stability unfolded within just a few months this time.

The progression from years-long to months-long stabilization cycles, and from repetitive friction-dialogue patterns towards clearer strategic direction and consensus-building, reflects China’s consistent approach: readiness to negotiate combined with firm adherence to principles and clear boundaries. China’s demonstrated resilience has garnered international respect and created conditions conducive to resolving differences through dialogue.

Today, China-U.S. dialogue occurs on a more equitable basis. Communication is increasingly pragmatic, with clearer articulation of respective bottom lines. This resilience suggests the potential for a new, more stable chapter in the relationship.

Head-of-state diplomacy plays an irreplaceable strategic guiding role. Last year, when a wave of tariff tensions rattled the world, the two presidents steered China-U.S. economic and trade ties back on course. 

Under the guidance of the consensus reached by the two presidents, the teams from both sides have so far held six rounds of consultations and are currently engaged in a new round of talks. 

Since the meeting between the two heads of state in Busan last October, China-U.S. relations have generally maintained a stable and improving momentum — a trend widely welcomed by both peoples and the international community.

The strategic guidance provided by the two heads of state helps identify “dangerous reefs” ahead in China-U.S. relations. The Taiwan question is the most important and most sensitive issue at the very core of China-U.S. relations, and it concerns the political foundation of bilateral ties. 

Xi has repeatedly elaborated China’s principled position on the Taiwan question to Trump, emphasizing that Taiwan is China’s territory, and China must safeguard its own sovereignty and territorial integrity, and will never allow Taiwan to be separated. Clearly defining principles and bottom lines is precisely the responsible approach needed to prevent serious risks in China-U.S. relations.

The aspiration of the Chinese and American business communities to deepen ties and cooperation has never changed. At present, more than 7,000 Chinese-funded enterprises operate in the United States, while about 80,000 American-invested enterprises are active in China. 

These firm choices made at the forefront of the market clearly and powerfully demonstrate the true nature of China-U.S. economic and trade relations: mutual benefit and win-win cooperation. 

As China enters the 15th Five-Year Plan period, its commitment to high-quality development and high-standard opening up will create broader incremental space for China-U.S. cooperation.

The will of the people stands as a profound and enduring force shaping the trajectory of China-U.S. relations. Whether at those pivotal moments when China and the United States seized every moment to break the ice, or when bilateral relations slid to a low ebb, the sincere aspiration of the two peoples for mutual understanding and friendship has never changed.

As exchanges deepen and produce tangible results, perceptions are improving positively. More Americans are actively participating in fostering people-to-people friendship, contributing greater rationality and constructive perspectives to the relationship.

In the face of profound changes unseen in a century, China and the United States, as permanent members of the United Nations Security Council and the world’s two largest economies, shoulder even greater responsibilities. Promoting global development, safeguarding peace and security, and improving global governance all require cooperation between the two countries. 

This year, China will host the APEC Economic Leaders’ Meeting and the U.S. will host the G20 Summit. Whether the two sides can demonstrate the vision and responsibility expected of major countries, and deliver more tangible benefits to the world, bears directly on the well-being of both peoples and the future of humanity.

China-U.S. relations cannot return to the past, but they can move toward a better future. Both sides should proceed from a sense of responsibility to history, to the people, and to the world, and explore ways to build a strategic, constructive, and stable China-U.S. relationship featuring mutual respect, peaceful coexistence, and win-win cooperation.

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China’s robust Q1 performance lifts global confidence 

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By He Yin, People’s Daily

China recently unveiled its economic performance for the first quarter of 2026. Its GDP reached 33.4193 trillion yuan ($4.9 trillion), up 5 percent year on year in real terms, accelerating by 0.5 percentage points from the fourth quarter of last year. 

The figures have drawn close attention from the international community, which generally believes that amid rising global uncertainty, China’s economy has demonstrated resilience and vitality, injecting much-needed stability and positive momentum into the world.

At present, global instability is intensifying. The spillover effects of geopolitical conflicts are expanding, and international organizations such as the UN and the Asian Development Bank have warned of growing downside risks. The global economy is moving forward under pressure. 

In the face of mounting external uncertainties, China’s economy continues to display strong resilience, robust internal momentum, and proactive, effective macroeconomic policies. Phrases such as “better than expected” and “growth against the headwinds” have frequently appeared in international media coverage. 

Kristalina Georgieva, Managing Director of the International Monetary Fund, noted that China’s economy has shown resilience, possesses immense potential, and will have a positive impact on the world.

Driven by innovation, high-quality development surges forward. In the first quarter, China’s equipment manufacturing sector contributed nearly 50 percent to the growth of value added in industrial enterprises above designated size. In the first two months of the year, high-tech manufacturing accounted for more than half of the increase in total industrial profits, underscoring the growing role of new growth drivers. 

China’s industries are advancing rapidly toward high-end, intelligent, green and upgraded development, delivering continuous breakthroughs in fostering new quality productive forces. 

Exports of green products such as electric vehicles, lithium-ion batteries, and wind turbines and their components rose by 77.5 percent, 50.4 percent, and 45.2 percent, respectively. Meanwhile, investment in frontier fields including AI and humanoid robotics increased by 45.5 percent year on year, and the business vitality index of technology-driven enterprises rose by 8.1 percent. 

Global media outlets have observed promising signs: China’s thriving clean energy technologies are creating huge economic value, and robust demand for AI devices is driving steady growth of China’s foreign trade. These positive trends vividly demonstrate China’s progress in developing new quality productive forces.

Domestic demand has also shown overall improvement, creating favorable conditions for sustained economic expansion. 

Promoting a development model driven more by domestic demand, consumption, and endogenous growth reflects China’s strategic response to changes in its development stage and the evolving international environment. 

In the first quarter, retail sales of consumer goods grew by 2.4 percent year on year, while fixed-asset investment returned to positive growth, indicating that the domestic market continues to deepen and expand. 

At the sixth China International Consumer Products Expo held in Hainan province, a wide range of global debuts, Asia-Pacific premieres, and China launches were showcased, further strengthening China’s reputation as a premier global destination for quality consumption. 

The country’s vast market continues to empower economic development. Some U.S. media outlets observed that China is transitioning toward a more diversified growth model, one that benefits not only China itself but also offers valuable lessons for the global economy.

Amid profound adjustments in the global economic landscape, China remains committed to high-level opening up, creating broad opportunities for the world through its own development. 

A series of opening-up measures have been rolled out, including the launch of island-wide independent customs operations at the Hainan Free Trade Port, revisions to the Foreign Trade Law to better align with international rules, and an expanded version of the Catalogue of Encouraged Industries for Foreign Investment. These steps are improving both the quality and scale of trade cooperation. 

In the first quarter, China’s total goods trade exceeded 11 trillion yuan for the first time in the same period, maintaining double-digit growth and reaching the highest quarterly growth rate in five years. 

Its trade with Belt and Road partner countries accounted for 51.2 percent of the total, while trade with Africa grew by 23.7 percent. Trade with ASEAN, Latin America, the European Union, the United Kingdom, and other APEC economies also recorded double-digit growth. China’s role as a “world market” continues to generate positive spillover effects globally. A more open China will remain a steady anchor for the world economy as it navigates challenges.

The year 2026 marks the opening of China’s 15th Five-Year Plan period (2026-2030). Stable economic growth provides a solid foundation for a strong start to this new phase, while also serving as a stabilizer for the global economy amid turbulent conditions. China will continue to inject sustained confidence and strong momentum into global development.

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