Illustration: Liu Rui/GT
In 2024, the added value of China’s “three new” economy – encompassing new industries, new business formats, and new business models – expanded by 6.7 percent year-on-year, calculated at current prices. This growth rate surpassed the overall GDP increase at current prices by 2.5 percentage points, as reported by the National Bureau of Statistics (NBS) on Thursday. Amid China’s ongoing efforts to further open its economy to the world, the expansion of these cutting-edge sectors heralds new opportunities for the global economy.
Understanding new industries and new business models is straightforward, but what exactly are new business formats? According to the NBS, the term “new business formats” refers to the emergence of new segments, chains, and forms of activity that evolve from existing industries and sectors. This evolution is driven by the demand for diversified, varied, and personalized products or services, relying on technological innovation and application. In essence, “new” and “technological innovation” are the keywords.
The “three new” economy is a vibrant segment of China’s economy, represented by the internet, the knowledge economy, cutting-edge technology, and other sectors.
According to the NBS, China’s “three new” economy accounted for 18.01 percent of the nation’s GDP in 2024, an increase of 0.43 percentage points from the previous year. This demonstrates that the “new” component of China’s economy is continuously increasing.
The backdrop to all this is that, although there has been a rise in trade protectionism on the international stage, driven by certain countries, China continues to advance its policy of opening up to the world. As China’s connections with the global economy deepen further, the growth of China’s “three new” economy is expected to generate more positive spillover effects.
In recent years, the growth of China’s “three new” economy has given rise to a number of globally competitive companies. These enterprises are increasingly looking outward, expanding their international investments. By integrating Chinese businesses into the global innovation system and value chain networks, they not only foster China’s global economic integration but also bring additional employment, tax revenue, and development opportunities to the countries and regions where they invest.
Official data indicates that in 2024, China’s outward direct investment across all sectors amounted to $162.78 billion, a 10.1 percent increase compared with the previous year. While it’s challenging to derive an accurate estimate of the specific contribution rate of the “three new” economy to the growth of China’s outward investment, it is reasonable to assume that the growth of China’s emerging sectors has played a role in driving companies’ investments in overseas markets.
Equally important, within China, the development of the “three new” economy is continuously boosting economic growth by creating more jobs, enhancing labor productivity, promoting consumption upgrades, and expanding domestic investment opportunities. As China further opens its market to the world, multinational corporations looking to engage with the Chinese market are presented with new opportunities.
The “three new” economies have permeated consumer sectors such as clothing, food, housing, and transportation. They are creating new demand and stimulating new consumption patterns. For example, the integration of internet technology with the traditional dining industry has led to the development of new dining services. Utilizing the internet and social media, these services provide personalized ingredients, customized dining environments, and delivery options.
China’s consumer market is evolving rapidly. In recent years, the accelerated application of technological innovation in the consumer sector has given rise to new consumption scenarios and growth points. As China continues to open its markets, the growth of these new consumption trends offers fresh opportunities for multinational corporations.
However, these companies face intense competition in the Chinese market as they seek to capitalize on these new opportunities. This means that they must continually enhance their understanding of the shifts in China’s consumer market and improve the competitiveness of their products and services to catch the fast-moving train of China’s “three new” economy.
The further opening-up of China’s “three new” economy offers vast market and investment opportunities globally. How to seize these opportunities remains a question worthy of consideration for multinational corporations.
The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn