On the morning of November 29, the 2025 China Macroeconomic Forum took place at the National University Science and Technology Park of Shanghai University of Finance and Economics (SUFE). Centered on the theme Launching the 15th Five-Year Plan Period: Riding the Economic Cycle through Innovation-Driven Growth, the forum released the 2025 Annual Report on China’s Macroeconomic Situation Analysis and Forecast. Attendees included Yao Yang, Dean of the Dishui Lake School of Advanced Finance at SUFE; Lu Zhengwei, Chief Economist of Industrial Bank and Director of the China Chief Economist Forum; Wen Yi, Distinguished Professor at the Antai College of Economics and Management, Shanghai Jiao Tong University; Xu Longbing, Vice Dean of the SUFE Institute for Chinese Modernization; Chen Yuanyuan and Mao Peihua, Vice Deans of the School of Economics; Wu Huabin, Associate Professor and Director of the China Macroeconomic Research Center, together with his research team.
Xu Longbing, Vice Dean of the SUFE Institute for Chinese Modernization, delivered the opening address. He remarked that the forum theme is highly timely, as China stands at the juncture between the 14th and 15th Five-Year Plan periods. The global economy is undergoing profound readjustment, with rising anti-globalization sentiment and heightened uncertainty surrounding international trade rules. Domestically, the Chinese economy is in a critical phase of structural transformation, where growth driven by traditional factors is weakening amid overlapping structural frictions and risks. To navigate these domestic and external headwinds, countercyclical short-run macroeconomic policies alone are insufficient. Long-term structural reforms and new innovation-driven growth engines are essential to consolidate the foundation of high-quality development. He stressed that innovation is the fundamental force for breaking cyclical constraints. Innovation in the new era is systemic in nature; China must accelerate high-level self-reliance in science and technology and foster emerging industries such as artificial intelligence, bio-manufacturing and low-altitude economy. He noted that the SUFE Institute for Chinese Modernization and the China Macroeconomic Research Center will continue to fulfill their think-tank mission, serve national strategies and contribute “SUFE insights”.
Zhang Tongbin, Associate Professor and Deputy Director of the China Macroeconomic Research Center at the School of Economics, presented the 2025 Annual Report on China’s Macroeconomic Situation Analysis and Forecast on behalf of the research team. The report observes that since the start of the 14th Five-Year Plan period, China has achieved remarkable economic results amid a volatile global environment and profound domestic structural shifts. China’s GDP registered a cumulative year-on-year growth rate of 5.2% in the first three quarters of 2025, reflecting steady improvement in macroeconomic performance. The research team maintains that the Chinese economy retains solid fundamentals: households have latent demand, firms retain incentives to invest, and policymakers retain sufficient policy space. As the 15th Five-Year Plan period begins, institutional innovation and structural optimization can rebuild growth momentum and achieve a fundamental shift from debt-fueled growth to innovation-led growth.
Nonetheless, insufficient aggregate demand persists during this transition between old and new growth drivers, manifesting in several unexpected trends: investment growth has fallen below consumption growth, with sharp slowdowns in manufacturing, infrastructure and real estate investment. Prices remained near deflationary territory in the first three quarters, while housing prices continued to bottom out, with month-on-month declines in both new and second-hand home prices widening. The team argues that weak aggregate demand stems from deep-seated tensions accumulated under the old growth model. For a long time, households, firms and governments relied heavily on leverage to sustain rapid expansion, leading to elevated debt levels. The deep correction in the real estate market since 2021 has exposed the fragility of this model. Falling home prices erode household wealth and dampen consumption, which in turn drags down corporate revenue, profits and capacity utilization, intensifies price competition and forces some firms out of business. Corporate exits hurt employment and incomes and further suppress consumption, trapping the economy in a vicious cycle of shrinking wealth, contracting demand, falling profits, excess capacity and deteriorating labor markets. Meanwhile, plunging land-transfer revenues have rendered the land-finance model unsustainable. Even so, the three strengths of the Chinese economy — household demand, corporate incentives and policy room — form the internal logic for future recovery and structural upgrading. In the short run, a prudent yet flexible policy mix is needed to stabilize the real estate market and shore up household asset expectations and consumer confidence. In the medium and long run, innovation is the only path to cross cyclical pressures and restore economic rebalancing and growth.
The keynote session featured presentations by Dean Yao Yang, Chief Economist Lu Zhengwei and Professor Wen Yi.
Professor Yao Yang delivered the keynote speech China’s Economy through the Lens of the 15th Five-Year Plan. He outlined the core priorities of the new plan: strengthening manufacturing and the real economy to build a modern industrial system, and advancing original innovation to achieve self-reliance in core technologies. He framed these priorities within two macro perspectives. First, China’s economy has undergone profound adjustment since 2018. Deleveraging, real estate rectification, financial regulation and curbs on hidden local government debt, while painful in the short term, lay the groundwork for long-run health. The economy is shifting away from its old reliance on finance and real estate toward a new growth structure anchored in manufacturing and technological innovation, entering a new cycle centered on the real economy and indigenous R&D. Second, China’s economic policy is increasingly shaped by technological and industrial competition with the United States. Within this global strategic landscape, China must build a self-controlled, complete industrial system for a major country and achieve breakthroughs in key technologies, which underpin both high-quality development and national security. Against this backdrop, he highlighted two policy priorities: unlocking domestic demand potential by reasonably releasing consumption and investment under stable real estate, infrastructure and fiscal frameworks; and improving financial support for innovation. Within China’s bank-dominated financial system, channels must be developed to channel capital safely and efficiently into market-oriented PE and VC funds to support original, 0-to-1 innovation. He concluded that after years of deep adjustment, China is entering a new development stage centered on manufacturing and indigenous innovation, underpinned by national strategic security. Over the next five to ten years, the Chinese economy will reshape itself around this core narrative and embark on a new cycle of high-quality development.
Chief Economist Lu Zhengwei presented Strengthening the Financial Closed Loop for Innovation. He noted that the 15th Five-Year Plan places the modern industrial system at the top of the agenda, with scientific and technological innovation as its core pillar. A new national whole-of-nation system must be refined to secure decisive breakthroughs in core bottleneck technologies across the full innovation chain. China has begun to build a preliminary financial loop that channels household savings into equity financing for innovation. He argued that a full-chain financial support system for science and innovation spans six stages. In the incubation phase, funding comes from fiscal resources, policy finance and philanthropic grants. At the product maturation and industry introduction stage, government guiding funds take the lead and attract long-term capital from banks, insurers, social security funds and trusts via equity investment. Once technologies mature and are ready for industrialization, streamlined exit channels in the primary market encourage further capital flows into strategic tech sectors, forming a virtuous cycle of early investment, timely exit and reinvestment in innovation. After successful IPOs, ETFs absorb secondary-market capital, with households, social security funds and institutional investors participating, completing the “savings–innovation–recycling” loop. Central Huijin and market stabilization funds reduce volatility, boosting investor confidence and improving market participation. This financial loop for innovation is already taking shape, and three areas need further reinforcement: establishing regular market stabilization mechanisms to lower A-share volatility significantly; encouraging retail investors to adopt ETFs instead of single stocks; and leveraging registration-based IPO reform to create efficient IPO and M&A pathways for firms with potential breakthroughs in bottleneck technologies, while continuously enriching ETF offerings. He forecast that China’s capital market may enter a period of systematic valuation re-rating, converting high savings into sustainable innovation momentum and providing solid financial backing for the modern industrial system and long-run economic growth.
Professor Wen Yi gave the talk Two Major Shifts in the Global Productivity Center. He argued that two pivotal shifts in the global productivity center have occurred since 1 CE. The first began with the Renaissance, moving productivity from the East to the West. The second started in the first half of the 20th century, as productivity began flowing back from the West toward the East. This historic restructuring of the global order is still underway, and China’s rise stands as its most consequential force. Analyzing patterns of global industrial relocation, he identified a core contradiction in capitalist market operations: manufacturing persistently yields lower returns than finance. Manufacturing entails heavy coordination costs and physical infrastructure, while finance enjoys high liquidity. This structural divergence drives market economies to evolve along the path of commercial capitalism → industrial capitalism → financial capitalism, often ending in manufacturing hollowing-out and widening inequality. He outlined four preconditions for financial capitalism: financial capital’s capture of state power, unrestricted cross-border capital flows, state tolerance of widening inequality, and overseas capacity absorbers once domestic manufacturing declines. Based on this framework, he judged that China is unlikely to undergo manufacturing hollowing-out and that US reshoring policies have limited prospects for success. He emphasized that China has transitioned from a bystander to a core participant in the Fourth Industrial Revolution. To secure its position in the new global order, China must build an independent knowledge system, moving beyond simply following international rules to develop its own theories, pathways and institutional frameworks, share Chinese experience and wisdom with the world, and help shape the new global productivity center.
The forum attracted wide attention. The SUFE WeChat Video Channel live-streamed the whole event, drawing nearly 30,000 online viewers and participants. Hosted jointly by the SUFE Institute for Chinese Modernization and the China Macroeconomic Research Center, and co-organized by the Dishui Lake School of Advanced Finance and the School of Economics, the forum was co-chaired by Chen Yuanyuan, Vice Dean of the School of Economics, and Wu Huabin, Director of the China Macroeconomic Research Center and Associate Professor at the School of Economics.
Source | SUFE Macroeconomics Team
