Winter economy heats up Employees in an ice and snow park in Zhangjiakou, North China’s Hebei Province, assemble snow-making machines on Novermber 20, 2024. During the 2023-24 season, China's ice and snow tourism grew 38 percent year-on-year in terms of visitor numbers and 50 percent in revenue, according to the tourism authority. Photo: VCG

Facing a complex international landscape, marked with fluctuating economic cycles and intertwined structural contradictions, China's economy is undergoing a significant transformation, shifting from the previous phase of rapid growth to one of high-quality development.

As the new year of 2025 draws near, the Chinese economy stands at a key conjunction in this evolving transition, while propelled by a barrage of new growth drivers.

For a long time, consumption, export and investment, also known as a "troika" of economic growth, have been China's major drivers of GDP growth. However, in recent years, the three traditional drivers have shown signs of fatigue. The theoretical foundation of the "three engines" growth theory has struggled to fully explain the complex changes in China's economy under the current economic situation.

With the continuous optimization and upgrading of the economic structure, a new line-up of growth drivers for China's economy, known as "the new three engines," has gradually taken shape. This new system comprises production efficiency, transaction efficiency and products innovation.

Improved production efficiency helps accelerate manufacturing, while enhanced transaction efficiency facilitates smoother market circulation, and products innovation diversifies product offerings, broadening the boundaries of economic growth. Together, these new three factors act as important sources of sustainable economic growth in China.

Gao Liankui Photo: Courtesy of Gao Liankui

At present, China's economy has entered a steady path of growth. While this natural growth model may not match the rapid pace of the previous high growth rates, largely driven by government and corporate investments, it is still characterized by stability and sustainability. And throughout this transformation, China's economy has showcased numerous bright spots.

First, the country's economic structure is undergoing a remarkable transformation, with consumption increasingly emerging as the primary driver of growth. The previous model, which heavily relied on the real estate sector, is being supplanted by a consumption driven approach. This shift not only fosters sustainable economic development but also generates new sources of momentum for economic growth.

For instance, as winter brings colder temperatures, the ice and snow-related consumption is thriving across many regions in China. Earlier in November, the State Council issued a guide to stimulate the vitality of the ice and snow economy and detailed 24 measures to back up the sector. By 2027, the size of ice and snow economy in China is expected to reach 1.2 trillion yuan, and by 2030, the size will likely hit 1.5 trillion yuan.

Meanwhile, sales revenue of home appliances under the policy-backed commodities trade-in program reached 201.97 billion yuan ($28.11 billion) as of December 6, data from the Ministry of Commerce showed.

Moreover, the technological transformation of the manufacturing sector is yielding results. Ongoing enhancements in production efficiency, transaction efficiency and products innovation have established a robust foundation for sustained economic growth.

Notably, in areas such as new energy vehicles and semiconductors, Chinese companies are demonstrating significant momentum in technological advancement and market expansion, infusing new vitality into the consumer market. Technology innovation has emerged as a key driver of China's growth now.

In the meantime, the optimization of the export structure is another bright spot of China's economy. With the rise of the "new three products" (electric passenger cars, lithium batteries and solar cells), China's export structure is continuously improving, demonstrating the growing competitiveness and innovation capabilities of Chinese manufacturing. This change not only increases the added value of export products but also adds new impetus to China's foreign trade.

In summary, China's economy is undergoing a significant transformation from high-speed growth to high-quality development, fueled by the emergence of three new engines that are injecting fresh vitality into economic growth.

The author is a Beijing-based economist and founder of China Original Economics Forum. bizopinion@globaltimes.com.cn