As we approach 2025, China stands on the brink of a series of transformations. Geopolitical volatility and rising tariffs are forcing the rapid realignment of global trade corridors, fierce domestic competition is reshaping industries, and innovations powered by artificial intelligence (AI) are bringing fundamental changes to day-to-day life. These are just a few of the seismic shifts in business and life we are witnessing in China today. Here are 10 trends worth watching in China in 2025.
Expect China to be fully prepared for geopolitical volatility and rising tariffs next year as it continues to reconfigure its trade portfolio. Trade corridors between China and the Association of Southeast Asian Nations (Asean), the Middle East and Latin America will grow disproportionately.
Indeed, Asean is China’s largest trading partner, accounting for 15 per cent of China’s total trade value; the Global South now represents over 50 per cent of China’s trade. China is also shifting towards higher-value-added products such as electronics, machinery and cars, which last year comprised around 50 per cent of its total exports.
The domestic market will continue to be brutally competitive. Price competition within China will accelerate, putting even more pressure on profitability. From coffee to furniture to e-commerce, there is no relief in sight as companies fight for survival. Private investment has slowed in recent years, which may lead to constrained new supply. Expect more consolidation and bankruptcies in 2025.
Most multinational corporations in China will have to radically transform, driven by fierce local competition and shifting demand. Multinationals in China typically have higher structural costs and less agile organisations relative to their domestic peers. In today’s market, unless multinationals offer a value-for-money proposition that is competitive, their market share and bottom line will shrink rapidly. Standing still is not an option.
We will witness the emergence of Chinese multinational corporations in 2025. The challenges are significant and many will fail, but don’t underestimate the sheer determination and number of Chinese companies venturing abroad. They are setting up joint ventures, building manufacturing sites, localising products and employing locals, a trend that mirrors the strategies Western multinationals have employed for decades. Watch this space.
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Chinese EV maker BYD launches its first Southeast Asia factory in Thailand
Chinese EV maker BYD launches its first Southeast Asia factory in Thailand
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