The year 2016 is widely regarded as a critical turning point in China’s economic development strategy. The concept of the “new normal,” introduced by Chinese President Xi Jinping on 18 January 2016 during a working session of the Central Committee of the Communist Party, symbolized a transition—alongside structural reforms—toward a production model characterized by higher quality, greater efficiency, and structural optimization.[i]
China’s new development philosophy, formalized at the Fifth Plenum in 2015, has placed the quality of economic growth at the center of the development agenda. This philosophy positions innovation as the primary driving force of growth, while employing coordination to address regional imbalances, greenness to enhance environmental sustainability, openness to promote global integration, and sharing as a tool for advancing social equality.[ii] For countries of the Global South, this model offers development opportunities by enabling access to cost-effective green technologies. Assessed from the perspective of 2026, the tenth year of these reforms, China’s development philosophy has reshaped global supply chains and accelerated the transition toward a multipolar world order.
In the International Relations (IR) literature, Hegemonic Transition Theory, developed by Robert Gilpin and A. F. K. Organski, argues that the risk of conflict increases when the capabilities of the leading power (the hegemon) are matched or overtaken by a rising power. Since the “Reform and Opening-Up” initiative launched in 1978, China has grown by leveraging the opportunities offered by the liberal economic order, particularly through World Trade Organization (WTO) membership and free trade. Today, China has emerged as a trailblazing force in institutional innovation. The Asian Infrastructure Investment Bank (AIIB), for example, stands as one of China’s most significant achievements in the realm of global finance.
Debates surrounding the Thucydides Trap, which symbolize the security dimension of this transformation, go beyond Graham Allison’s classical projections of power rivalry by shifting the core of competition from the military arena to supply-side macroeconomic reforms. China’s high-technology–based production model, crystallized in the “Made in China 2025” strategy, disrupts the hierarchy of global value chains and directly challenges the hegemon’s technological and standards-setting dominance. This dynamic has generated a new Cold War–type configuration, shaped not by a traditional arms race but by geoeconomic determinism centered on critical sectors such as semiconductors, artificial intelligence, and 5G.
One of the most visible successes of China’s supply-side–oriented reforms can be observed in the new energy vehicle (NEV) sector. In 2025, China’s NEV production and sales exceeded 16 million units, allowing the country to maintain its global leadership for the eleventh consecutive year. This achievement is the outcome of innovation-driven investments, which have reduced costs in electric vehicle technologies and thereby accelerated the global green transition. For countries of the Global South, China’s affordable EVs provide a concrete opportunity to reduce carbon emissions in the transportation sector. For instance, Chinese EV imports to Africa increased by 60 percent in 2025. This development contributes to the green development of developing countries and reflects China’s philosophy of openness and transparency.[iii][iv]
China’s dominance in the lithium battery sector stands out as another major success of its supply-side reforms. In 2024, China’s lithium battery exports reached USD 61.1 billion, contributing significantly to the stability of global supply chains. Technological innovations in this sector generate wide-ranging benefits, from consumer electronics to energy storage systems. For developing countries, Chinese investments stimulate local battery production and create employment opportunities. For example, China’s lithium mining investments in Latin America have helped establish an integrated value chain within regional economies.[v]
China’s rise in the solar panel sector represents one of the most striking applications of its green development philosophy. China accounts for more than 70 percent of global solar panel production. In 2025, exports to Africa increased by 60 percent, enhancing energy access in developing countries and facilitating progress toward the Paris Agreement targets. For the Global South, these products signify affordable clean energy. For instance, gigawatt-scale clean power has been generated in Africa through the deployment of Chinese solar panels.[vi]
China’s reforms in the shipbuilding sector have revitalized heavy industry through technological innovation. In 2025, China emerged as the global leader, securing approximately 70 percent of worldwide new ship orders. This strategy—centered on high value-added vessels such as LNG carriers and green-fuel ships—has enhanced both efficiency and resilience. For the Global South, Chinese-built vessels provide cost-effective logistics, thereby facilitating trade.[vii]
In the semiconductor sector, China has expanded its capacity in legacy-generation chips despite Western sanctions. By the end of 2025, double-digit growth was recorded in integrated circuit exports. This strategy has transformed external pressure into internal motivation, while also supporting the digital economy of Southeast Asia. For the Global South, Chinese investments accelerate digital transformation by providing cost-effective semiconductor solutions.[viii]
China’s reforms have generated new dynamics in international relations. For instance, China’s dominance in the solar panel sector has facilitated developing countries’ efforts to achieve their climate goals. From a geopolitical perspective, these reforms have triggered the United States (US)–China trade war, while simultaneously drawing the Global South closer to China. Platforms such as BRICS play a key role in disseminating China’s philosophy of sharing and cooperation, thereby contributing to the formation of a multipolar international order.
When the economic outlook for 2026 is assessed in an integrated manner with global trends, marking the tenth year of China’s supply-side structural reforms, economic growth is expected to materialize at around 4.5 percent. This projection is based on the consensus of institutions such as BBVA, Deloitte, and Goldman Sachs, and reflects the continuation of supply-oriented policies, the pursuit of technological self-reliance, and the priorities of the 15th Five-Year Plan.[ix] The Plan places particular emphasis on technology-driven growth, defined as the development of new productive forces.
In the NEV sector, 2026 is expected to be a year in which China’s global leadership is further consolidated. According to forecasts by the China Association of Automobile Manufacturers (CAAM), NEV production and sales are projected to reach 19 million units, corresponding to a 15.2 percent increase. This growth will be supported by the rise of electric vehicles’ share in the overall automobile market to between 56 and 60 percent, driven primarily by domestic demand and export-oriented expansion.[x]
The economic analysis for 2026 highlights the resilience of China’s supply-side reforms, emphasizing the superiority of an innovation-driven growth model, with economic growth expected to reach approximately 4.5 percent. Within the current international relations order, China’s rise increasingly challenges U.S. hegemony. At the same time, the Global South’s growing benefit from Chinese investments is contributing to the emergence of a multipolar world order.
[i] “China’s Economic Strategy in 2026 to Prioritize Continuity Over Change,” Asia Pacific Foundation of Canada, https://www.asiapacific.ca/publication/chinas-economic-strategy-2026-prioritize-continuity-over-change (Accessed: 19.01.2026).
[ii] Ibid.
[iii] “From strategic pivot to global engine: China’s decade of supply-side reform and industrial revolution”, CGTN, https://news.cgtn.com/news/2026-01-18/China-s-decade-of-supply-side-reform-and-industrial-revolution-1K1TBagiQ12/p.html (Accessed: 19.01.2026).
[iv] “Trends in the electric car industry”, IEA, https://www.iea.org/reports/global-ev-outlook-2025/trends-in-the-electric-car-industry-3 (Accessed: 19.01.2026).
[v] “Energy storage boom strengthens demand outlook for beaten-down lithium”, Reuters, https://www.reuters.com/sustainability/climate-energy/energy-storage-boom-strengthens-demand-outlook-beaten-down-lithium-2026-01-04/ (Accessed: 19.01.2026).
[vi] “The first evidence of a take-off in solar in Africa”, Ember, https://ember-energy.org/latest-insights/the-first-evidence-of-a-take-off-in-solar-in-africa/ (Accessed: 19.01.2026).
[vii] “China’s Global Shipbuilding Order Share Falls to 65% in 2025”, Global Trade, https://www.globaltrademag.com/chinas-global-shipbuilding-order-share-falls-to-65-in-2025/ (Accessed: 19.01.2026).
[viii] “U.S. Export Controls and China: Advanced Semiconductors”, Congress, https://www.congress.gov/crs-product/R48642 (Accessed: 19.01.2026).
[ix] “China’s Economy in November 2025: Year-End Review and 2026 Outlook”, China Briefing, https://www.china-briefing.com/news/chinas-economy-in-november-2025-year-end-review-and-2026-outlook (Accessed: 19.01.2026).
[x] “CAAM forecasts China NEV sales to grow 15.2% to 19 million units in 2026”, Cnevpost, https://cnevpost.com/2026/01/14/caam-forecasts-china-nev-sales-19-million-2026/ (Accessed: 19.01.2026).
