China, the world’s most populous nation, continues to be a dominant global economic and political force. Ruled by the Chinese Communist Party (CCP) under General Secretary Xi Jinping, the country maintains tight control over all aspects of governance and society. While it aims for high-quality development and a “community with a shared future for mankind,” it faces significant domestic challenges and a complex international landscape.

Political Landscape:

  • The CCP maintains firm control, with Xi Jinping having significantly consolidated personal power. Political dissent is suppressed and civil society has been largely decimated through multi-year crackdowns on independent NGOs and human rights defenders.
  • The government continues to implement strict regulations across various sectors. Recent examples include new regulations on religious practices in Xinjiang (February 2025) and amendments to the Law on Guarding State Secrets (effective May 2025), which broadens the scope of restricted information.
  • There are no direct or competitive elections for national executive leaders and political positions are only directly elected at the lowest levels, often with intimidation and fraud impacting independent candidates. Ethnic minorities like Tibetans and Uyghurs hold largely symbolic roles in political bodies.
  • While the anti-corruption campaign continues, concerns persist about its effectiveness given the lack of independent institutions like a free press and impartial courts.

Economic Performance and Outlook:

  • China’s GDP grew by 5.0% in 2024, reaching RMB 134.9 trillion (US$19 trillion). Production and industry saw significant increases in sectors like new energy vehicles (38.7%) and integrated circuits (22.2%). The urban surveyed unemployment rate averaged 5.1%.
  • The government has set a GDP growth target of around 5% for 2025. The IMF projects 4.0% real GDP growth for 2025. Key measures to support growth include more proactive fiscal and accommodative monetary policies, boosting consumption, developing “new quality productive forces” (e.g., humanoid robotics, embodied AI), promoting industrial upgrading, urbanisation, rural revitalisation and green transition.
  • Economic Headwinds:
    • Consumer spending remains significantly below levels in many advanced economies and middle-income peers.
    • The real estate sector continues to be a major concern, with market prices falling since mid-2021 and private developers facing distress. This is a significant driver of the economic slowdown.
    • The ongoing confrontation with the United States, including tariffs and restrictions on technology like advanced chips, continues to impact China’s economic outlook and global trade interactions.
    • Reports suggest a reduction in the public availability of certain economic data, making it harder for external observers to assess the full economic picture.
    • While promoting strategic industries, some industrial policies have led to capital misallocation and inefficiencies, such as the reported mass electric car graveyards.
  • Belt and Road Initiative (BRI): While a key driver of China’s economic and global reach, the BRI faces criticism over debt sustainability, transparency, and social/environmental concerns. Future BRI projects are likely to be smaller, more targeted, and economically viable.
  • Demographic Challenges: China’s population decreased by 1.39 million in 2024, with a natural growth rate of -0.99 per thousand. The aging population presents long-term economic challenges.

Human Rights Situation:

  • China is widely considered a repressive regime with no independent civil society, freedom of expression, association, assembly, or religion.
  • Human rights defenders and perceived critics of the government are persecuted. This includes detention and imprisonment of pro-democracy activists and lawyers.
  • Authorities continue aggressive policies to alter the demographics of ethnic minority regions. Concerns about the treatment of Uyghurs and other Turkic ethnic groups in Xinjiang, including past internment in “Vocational Skills Education and Training Centers,” persist.
  • The “Great Firewall” continues to block internet access to information and the government exerts ideological control over education and media. Recent amendments to the State Secrets Law and proposals for a national digital ID card system further tighten control.
  • China actively works to reshape global discourse on human rights, seeking to shield itself from criticism and weaken the independence of UN bodies. This includes a significant increase in oral statements by Chinese government-organized NGOs (GONGOs) at the Human Rights Council and reported instances of intimidation and reprisals against activists.

International Relations:

  • US-China Relations: Marked by ongoing trade and technology disputes, including tariffs and restrictions on chips. Despite some conciliatory signals, the relationship remains complex and competitive.
  • Global Partnerships: China continues to expand its global partnerships, emphasizing equality, openness and cooperation. It advocates for “true multilateralism” and a “community with a shared future for mankind,” promoting its Global Development Initiative, Global Security Initiative and Global Civilization Initiative.
  • Russia Relations: China and Russia maintain a “comprehensive strategic coordination” based on “non-alliance, non-confrontation and not targeting any third party.” Both countries aim to promote a correct view of WWII history and defend the UN-centered international system.
  • “Global South” Focus: China is actively seeking to strengthen ties and cooperation with countries in the “Global South,” viewing them as critical for stabilizing and improving the planet.
  • Regional Diplomacy: China continues to engage actively in regional diplomacy, including with ASEAN nations and other Asian countries.
  • Taiwan: China continues to assert its position on Taiwan through direct pressure and diplomacy, viewing it as a core national interest.

Key Trends to Watch:

  • Economic Rebalancing: The success of China’s efforts to shift from an investment-driven growth model to one driven by domestic consumption and high-tech innovation.
  • Geopolitical Tensions: The ongoing competition with the US and its allies, particularly concerning technology, trade, and regional security.
  • Human Rights Scrutiny: Continued international pressure and scrutiny regarding China’s human rights record, particularly concerning ethnic minorities and civil liberties.
  • Demographic Shifts: The implications of China’s declining birth rate and aging population on its long-term economic and social development.

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