China Economy
China steps up domestic demand as global hub
China is accelerating efforts to boost domestic consumption, positioning itself as a major hub of global demand. At the China Development Forum 2026, executives highlighted that the country’s ultra-large market, industrial strength, and rapid innovation capabilities are creating opportunities for multinational companies.
Pan Gongsheng, governor of the People’s Bank of China, said China will maintain a supportive monetary stance, leveraging policy tools such as interest rates, reserve requirements, and open market operations to sustain liquidity. Household consumption’s contribution to GDP has risen from 37% in 2010 to 52% in 2025, signaling a structural shift toward consumer-driven growth.
Finance Minister Lan Fo’an emphasized investments in public services, childcare, and eldercare, aiming to improve well-being while fueling domestic demand. Executives from multinationals, such as Danfoss and ABB, noted that China’s innovation ecosystem, talent pool, and industrial infrastructure create fertile ground for technology deployment and sustainable solutions.
Takeaway: China’s push for consumption-led growth is both domestic and global, offering opportunities for multinationals while signaling a structural evolution in the country’s economic model.
China Global Expansion
German firms eye western China
A delegation of over 20 German business leaders visited Chongqing to explore business opportunities in western China. Sectors represented included food processing, trade, consulting, and publishing.
Chongqing’s strategic location on the upper Yangtze River and its comprehensive industrial system—covering 39 of 41 industrial categories—make it an attractive hub for German companies expanding inland from the Yangtze River Delta, which hosts more than 60% of German enterprises in China.
Thomas Bonschab, managing director of TiNC International, noted: “China has a huge potential market, and it’s still growing. We are positioning to capture different business segments efficiently.” The delegation expressed strong interest in cooperation across industries and joint exploration of international markets.
Takeaway: Multinational firms are increasingly looking beyond coastal regions, aligning their global strategies with China’s inland economic growth and industrial diversification.
China Industry
Laopu Gold drives high-end jewelry boom
Laopu Gold reported 2025 sales of 31–32 billion yuan ($4.5B), more than triple the previous year, with net profit up over 220%. Growth was driven by premium mall positioning, brand expansion, product upgrades, and rising gold prices, which climbed nearly 65% in 2025.
The company now operates around 50 stores domestically and seven overseas, targeting markets such as Japan and Singapore. Rising gold prices have increased consumer demand for luxury goods seen as wealth-preserving, though higher raw material costs have pressured margins.
Takeaway: High-end consumer segments in China are resilient, and brands that combine premium positioning with supply chain scale can thrive despite commodity cost pressures.
China Technology
Novartis deepens R&D and manufacturing in China
Novartis continues to expand in China, focusing on innovation, local manufacturing, and partnerships with domestic biotech firms. In 2025, Novartis grew 8% in China, making it the second-largest multinational pharmaceutical company in the country.
The company submits all new drug applications simultaneously in China and global markets, with several approvals in China preceding Europe. A 600 million yuan facility for radioligand therapy in Zhejiang province aims to meet domestic demand faster, while collaborations with local biotech firms facilitate licensing and co-development, reflecting China’s maturation as a global innovation hub.
Takeaway: China is no longer just a market for foreign R&D; it is becoming a source of globally relevant biopharma innovation.
Guangdong testing center advances NEV and low-altitude tech
A 3.6 billion yuan ($520M) intelligence-connected NEV testing center opened in Shaoguan, combining NEV and low-altitude aircraft testing. The platform supports full lifecycle testing—from components to system validation—integrating wind tunnels, road simulations, and low-altitude communications.
Feng Xingya, chairman of GAC Group, said the facility will enhance product quality, safety, and innovation, providing a foundation for the Guangdong-Hong Kong-Macao Greater Bay Area’s emerging mobility ecosystem.
Takeaway: Multi-domain innovation platforms like this signal China’s ambition to lead in next-generation mobility and integrated technology ecosystems.
OpenClaw highlights AI promise and risk
OpenClaw, the open-source autonomous AI agent, was a major topic at Nvidia’s GTC in San Jose. Capable of performing complex, real-world tasks—from scheduling to multi-step actions—it represents a shift from query-based AI to agentic AI.
Developers worldwide, including in China, have rapidly adopted OpenClaw, driving massive token usage. At the same time, cybersecurity experts and Chinese regulators warn of significant security risks. Nvidia unveiled Nemo-Claw to add privacy and security layers, and Tencent Cloud upgraded enterprise solutions to support safe deployment.
Takeaway: The rise of agentic AI underscores a critical tension: while these systems expand capabilities, robust governance and security frameworks are essential for adoption at scale.
AI cloud infrastructure under pressure
China’s cloud providers, including Alibaba Cloud, Baidu Cloud, and Tencent Cloud, have raised AI service prices by 5–34%, reflecting surging demand and rising infrastructure costs.
The main driver is explosive token consumption, fueled by AI agents like OpenClaw. Weekly token usage on OpenRouter reached 14.8 trillion in early March, up 160% in two months. Analysts warn that the rapid growth of AI workloads will continue to strain compute, storage, and bandwidth, potentially driving further price increases.
Takeaway: The economics of AI are evolving rapidly; enterprises and investors must consider compute cost, token efficiency, and infrastructure scalability when planning AI adoption.
Overall Insights
This week’s developments reinforce several key trends for overseas investors:
- China’s domestic consumption and industrial policies are creating new opportunities for multinationals.
- Emerging inland hubs like Chongqing are attracting foreign investment.
- High-end consumer and luxury markets remain robust despite commodity fluctuations.
- China’s technology ecosystem, from AI agents to NEVs and biopharma, is rapidly maturing, but adoption is intertwined with governance, cybersecurity, and infrastructure constraints.
- AI workloads and cloud economics are becoming central considerations for investment and operational planning.
China continues to blend innovation, scale, and regulatory evolution, offering a complex yet promising landscape for technology and investment worldwide.