A New Asian Economic Landscape | China Powers Asia’s Growth

Jiuri reports from Tokyo

From 2010 to 2024, most developing economies in Asia maintained annual growth of 4%, with many expanding by more than 5%. The region accounted for around 45% of global manufacturing output and became home to the world’s most concentrated network of industrial and supply chains.

In the first half of 2025, the Asia-Pacific region received 295.7 million international visitors, up 5.4% year on year.

In June 2026, Asia’s manufacturing purchasing managers’ index stood at 50.4, remaining above the 50-point threshold for a third consecutive month.

South Korea welcomed more than 10 million foreign visitors in the first half of the year, a record high.

Against a backdrop of widening divergence in the global economy and rising protectionism, Asia has developed a more dynamic regional economic cycle. The benefits of regional integration are continuing to emerge, while multiple growth centres are increasingly working in tandem.

This raises an important question: where does Asia’s economic resilience against external shocks come from?

The answer is clear: China is the central engine of this accelerating regional economy. Its policies, industrial capacity and vast domestic market form three key pillars supporting Asia’s economic resilience.

Two “60 Percent” Figures and One “30 Percent”

To understand China’s role in Asia, it is first necessary to examine three figures.

The first is that Asia now contributes more than 60% of global economic growth. According to IMF data, the region’s contribution exceeded 60% in 2025, double the approximately 30% recorded 25 years earlier.

IMF Managing Director Kristalina Georgieva put it plainly: the future of the global economy cannot be discussed without discussing Asia.

The second figure is China’s contribution to global growth, which has remained at around 30%—greater than the combined contribution of the Group of Seven economies.

Speaking at the Boao Forum for Asia, Peking University professor Justin Yifu Lin noted that, despite broad weakness in the global economy, China continues to contribute approximately 30% of annual global growth.

The third figure is that China and India together account for 70% of Asia’s economic growth.

Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, offered a more precise estimate: for every one-percentage-point increase in China’s economic growth, growth in emerging markets worldwide, including those in Asia, rises by approximately 0.3 percentage points.

Taken together, the figures reveal a clear chain of influence. Asia generates more than 60% of global growth, while China alone contributes around 30%. Within Asia, China and India account for 70% of the region’s expansion.

The IMF’s Research Department has described China as, without question, one of the major engines driving economic growth.

How Does the Engine Work?

China supports Asian growth through three progressively reinforcing channels.

The first is trade.

China and the Association of Southeast Asian Nations have been each other’s largest trading partners for six consecutive years, while the share of intra-Asian trade has continued to rise.

In the first half of 2026, China’s imports from and exports to countries participating in the Belt and Road Initiative rose by 13.6%, accounting for 51.2% of its total foreign trade. Trade with ASEAN increased by 16.6%.

Demand from China alone helps sustain the operation of numerous industrial chains across Asia.

The second channel is investment.

Reports released by the Boao Forum for Asia describe Asia as one of the world’s most attractive destinations for foreign direct investment, as well as one of the regions with the greatest development potential and resilience. China and ASEAN remain the Asian economies most attractive to foreign investors.

At the same time, Asian economies are gradually shifting from being primarily recipients of capital to becoming overseas investors themselves.

Chinese companies are building battery supply chains in Southeast Asia, investing in infrastructure in Central Asia and relocating manufacturing capacity to South Asia. Each investment is helping reshape the region’s economic geography.

The third channel is technological spillover.

Developing economies in Asia are advancing more rapidly in digital transformation than many other regions, accelerating the growth of the digital economy.

China’s capabilities in digital payments, cross-border e-commerce and artificial intelligence are spreading to neighbouring economies through regional industrial and supply chains.

Vietnam’s electronics assembly sector, Indonesia’s nickel-processing industry and Malaysia’s semiconductor packaging operations all bear the imprint of Chinese technology and investment.

Trade creates flows, investment builds long-term capacity and technological spillovers generate multiplier effects.

The Chinese model of regional growth is not limited to purchasing goods from neighbouring countries or building factories overseas. It also helps regional partners improve how they produce, innovate and compete.

The Weight Carried by the Engine

The engine may be powerful, but it is not operating without strain.

While recognising China’s important role in supporting regional growth, the IMF has also highlighted mounting pressures. Rising global oil prices, persistent uncertainty and structural challenges are expected to weigh on Chinese economic activity.

Energy-supply shocks caused by conflict in the Middle East are pushing up inflation and narrowing the space available for policy intervention.

Reports from the Boao Forum have identified additional risks. Technological advances and artificial intelligence could create employment challenges for young people, while uncertainty over trade rules and continuing supply-chain bottlenecks may erode workers’ incomes.

For the engine to keep running, horsepower alone is not enough. It also requires a stable supply of fuel and effective lubrication.

Asia’s Next Step

IMF forecasts indicate that Asia’s economic growth will slow from 5% in 2025 to 4.4% in 2026 and 4.2% in 2027.

The pace may be moderating, but the direction remains unchanged.

Zhang Jun, secretary-general of the Boao Forum for Asia, offered a more forward-looking assessment:

“Asia’s economic integration and sustainable development will inevitably encounter many difficulties and challenges. However, as long as all parties maintain confidence and work together, Asia will be able to advance further towards high-quality economic development.”

China is the engine of the Asian economy, but the purpose of an engine is not to replace the rest of the vehicle. It is to drive it forward.

When a vehicle is climbing a hill, the power of the engine matters. More important, however, is that all four wheels are turning.