ASIATODAY.ID, BEIJING — China’s economy is entering a new phase of transformation, with artificial intelligence (AI), high-tech industries, and the green transition increasingly replacing the property sector as the country’s primary drivers of growth, according to the World Bank’s latest China Economic Update released on Tuesday.
The report projects China’s economy will expand by 4.4% in 2026 before moderating slightly to 4.3% in 2027, reflecting a gradual slowdown as domestic consumption remains subdued and the prolonged correction in the real estate sector continues to weigh on economic activity.
Despite these headwinds, the world’s second-largest economy demonstrated resilience during the first half of 2026. Strong policy support, robust exports, rising investment in advanced manufacturing and technology, and reduced pressure from global energy supply disruptions helped cushion weaker domestic demand.
The World Bank said China’s long-term economic prospects will increasingly depend on successfully rebalancing growth toward household consumption rather than investment-led expansion.
“Further strengthening the social safety net would be a key measure to boost consumption,” said Tatiana Rosito, World Bank Division Director for China, Mongolia and Korea on July 7.
Expanding social benefits, extending protection to informal workers, and providing access based on residency would encourage households to spend more confidently instead of maintaining high precautionary savings.
The report noted that risks to China’s outlook remain broadly balanced. Although easing geopolitical tensions in energy markets and lower oil prices have reduced some external uncertainties, renewed volatility cannot be ruled out. At home, a deeper property-market downturn could further weaken consumer spending and real estate investment.
On the upside, stronger fiscal stimulus and faster-than-expected adoption of artificial intelligence technologies could lift economic growth beyond the World Bank’s current projections.
Beyond the macroeconomic outlook, the report highlights China’s low-carbon transition as one of the country’s most significant structural shifts, reshaping employment patterns and demand for new skills.
Employers are increasingly seeking workers with expertise in green technologies, digital capabilities, systems thinking, and adaptive learning. These skills command significant wage premiums and are spreading well beyond traditional clean-energy industries.
However, the World Bank warned that shortages of qualified workers could constrain the benefits of the transition unless governments accelerate investment in education, workforce training, and social protection.
“The low-carbon transition is creating new job opportunities, but workers need support to move into new roles,” said Elitza Mileva, World Bank Lead Economist for China. Portable green-skill credentials, vocational training, and stronger social protection will be essential to ensure the transition remains inclusive and sustainable.
The report underscores that China’s economic future will be shaped less by property and infrastructure investment than by innovation, artificial intelligence, advanced manufacturing, clean energy, and stronger domestic consumption. As Beijing navigates this structural transformation, the success of its reform agenda will have far-reaching implications not only for China but also for global supply chains, commodity markets, international trade, and the broader world economy. (AT Network)
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