China

Since 1978, the beginning of China’s reform and opening up period, GDP growth has averaged over 9 percent a year, lifting almost 800 million people out of extreme poverty and transforming China from a low-income to upper-middle-income country. Access to health, education, and other services has improved significantly over this period. By 2020, China had eradicated extreme poverty. However, in 2024, 15.2 percent of the population still lived on less than $8.30 a day (in 2021 purchasing power parity [PPP] terms), a higher living standard benchmark used as a reference by the World Bank to compare progress across countries.

China’s strong growth relied on investment and export-oriented manufacturing, an approach that has largely reached its limits and led to economic and environmental imbalances. A rapidly aging population presents additional challenges: a declining labor force is slowing GDP growth, while the growing ranks of the old could put pressure on public finances. Addressing these challenges will require stronger productivity growth and a shift in economic structure from manufacturing to high-value services, from investment to consumption, and from high to low carbon intensity.

Given its size, China is central to many regional and global development issues. Global climate challenges cannot be solved without China’s engagement. Although not the main source of historical cumulative emissions, China now accounts for a third of annual global carbon dioxide and 30 percent of greenhouse gas emissions, with per capita emissions now surpassing those of the European Union and on par with the average for the Organization for Economic Co-operation and Development (OECD). Achieving China’s goals of peaking carbon emissions before 2030 and reaching carbon neutrality by 2060 is crucial for mitigating climate change. China’s growing economy is also an important source of global demand. Its economic rebalancing will create new opportunities for manufacturing exporters, although it may reduce demand for commodities over the medium term.

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China’s growth momentum remained robust in the first half of 2025, with real GDP expanding by 5.3 percent year-on-year, supported by accommodative macroeconomic policies and strong exports. Nevertheless, the economy faces headwinds including a protracted property sector downturn, subdued confidence, deflationary pressure from weak domestic demand, and heightened uncertainty from shifting global trade policies.  The authorities have increased fiscal stimulus to boost domestic activity, alongside monetary easing to support market liquidity and lower financing costs.

Structural reforms are needed to reinvigorate the shift toward more balanced high-quality growth. The challenge is to find new drivers of growth while addressing the social and environmental legacies of China’s earlier development path. Stronger productivity growth is needed to offset diminishing returns to investment and a declining workforce. The role of the state also needs to continue to evolve, with a new focus on providing a clear, fair, and stable business environment; strengthening the regulatory system and the rule of law to further support the market system; and ensuring equitable access to public services to all.

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China began its partnership with the World Bank in 1980, initially as a recipient of World Bank financial and technical assistance, and now, increasingly as a contributor of finance and development experience. China graduated from the International Development Association (IDA), the WBG’s fund for the world’s low-income countries, in 1999, becoming a donor to IDA in 2007. In subsequent IDA replenishment cycles, China has steadily increased its contributions, now the fifth largest contributor in IDA21. China is the third largest shareholder of the International Bank for Reconstruction and Development.

The World Bank Group’s engagement in China has evolved with the country’s development trajectory and shifting priorities. In the early years, the WBG brought international experience to help design economic reform strategies, improve project management, and address key bottlenecks to growth. More recently, a two-way relationship has evolved —the World Bank offers international expertise to help address China’s key development challenges and pilot reforms through projects and programs; and China’s development experiences enhance the WBG global knowledge and capacity to help other developing countries.

Joint flagship studies, which began more than 10 years with  China 2030: Building a Modern, Harmonious, and Creative Society,  have been important for deepening the dialogue on policies. These studies have also provided a model for other middle-income countries.

In partnership with the Ministry of Finance , the China–WBG Global Center for Ecological Systems and Transitions (GKC), launched in December 2024, capitalizes China’s unique development experience in ecosystem restoration, and leverages growing global knowledge including World Bank Group’s expertise and global networks, bringing together stakeholders from around the world to exchange ideas, experience, and best practices, all the while promoting the creation of new knowledge.

World Bank-financed projects introduce innovations and pilot new approaches. They also serve as platforms for knowledge exchange. The current lending program focuses on global public goods and the strengthening of key institutions. Key thematic areas include decarbonization, environmental protection, water pollution control and prevention, biodiversity protection, and pandemic preparedness.

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