Foreign financial institutions show confidence in China’s economic prospects in 2025, highlighting its innovation-driven growth

Multiple foreign financial institutions and their analysts have drawn great confidence in their prospects in the Chinese market from the ongoing two sessions, highlighting China's innovation-driven growth and sustainability.

"For many multinational companies, China is and will remain an important market. China is too big to be missed - as a critical source of revenue and profitability," Denis Depoux, global managing director of Roland Berger, told the Global Times on Thursday.

The Chinese economy has demonstrated strong stability and resilience in the context of rising complexity and global unpredictability, which provided a stable business environment for multinationals. More importantly, China today is not only a manufacturing powerhouse but also a global innovation powerhouse, which drives trends in digitalization, sustainability, and other high-tech industries, and leads in both research and development (R&D) intensity and commercialization speed, Depoux said.

China on Wednesday set an annual GDP growth target of around 5 percent for 2025, according to the Government Work Report delivered to the National People's Congress (NPC) for deliberation.

The report outlines other key development goals for this year, including a surveyed urban unemployment rate of around 5.5 percent, over 12 million new urban jobs, and an increase of around 2 percent in the consumer price index.

"We find the NPC's message of a focus on tech innovation and consumption encouraging and it should help to sustain the market's momentum," Laura Wang, chief China equity strategist at Morgan Stanley, said in a note sent to the Global Times on Thursday.

The country achieved economic growth of 5 percent in 2024 as an impactful policy package, along with other pro-growth measures, helped fuel strong economic momentum.

"For the outlook for the entire year in 2025, we believe China will remain on the path of recovery. Domestic demand and technological innovation are expected to be the main drivers, as indicated by a series of policies and government announcements," An Yun, deputy general manager and chief investment officer at Schroders Fund Management (China) Co, told the Global Times on Thursday.

There have been significant structural advancements in technology since the start of 2025, such as breakthroughs by DeepSeek in large language models and robotics by Unitree, BYD's full autopilot coverage strategy, and the local implementation of artificial intelligence (AI) collaboration between Apple and Alibaba, among others.

"These advancements dramatically change the consensus on China's technological prospects," An said.

In recent days, foreign investors have increasingly turned their attention to the burgeoning opportunities in AI and robotics. About 100 foreign institutions have been actively researching China's A-share listed companies since February, conducting surveys of more than 60 listed companies, as the domestic financial newspaper Shanghai Securities Journal reported in February.

The new quality productive forces - one of the priorities on this year's government agenda - show China's determination toward industrial modernization and value-added driven economic leadership, across sectors. For multinationals, this transformation of the Chinese economy provides ample opportunities in industrial modernization, for example, automation, machine tools, and software, Depoux said.

This year's two sessions have stressed expanding higher-standard opening-up regardless of changes in the external environment. "We should steadily expand institutional opening-up and take the initiative to open wider and advance unilateral opening-up in a well-ordered way, so as to promote reform and development through greater openness," the Government Work Report noted.

China has been unswervingly expanding institutional opening-up in recent decades to realize high-quality development and offer the world new growth momentum and opportunities, rolling out various policies.

In one of its latest moves, China in January revealed a guideline that outlined 20 measures to expand financial opening-up in the country's pilot free trade zones and a free trade port. According to this document, foreign financial institutions will be granted the same treatment as their Chinese counterparts when providing new financial services not available in the country at that stage.

At the start of 2025, Morgan Stanley announced that Morgan Stanley Futures (China) Co, a wholly owned subsidiary, had officially commenced business to provide brokerage services for China's onshore commodity futures. Standard Chartered Securities China said that its Shanghai branch had obtained a license to conduct securities and other business in China.

"We are pleased to see China continuously fulfilling its commitment to expanding high-level opening-up, which will boost the confidence of foreign-funded institutions to continue investing in the Chinese market," said Janice Hu, China head of UBS AG and chairperson of UBS Securities Co.

Amid China's financial market opening-up, sustainable development and emphasis on new quality productive forces, we look forward to continuing our contributions to advancing the internationalization of the capital market, supporting the development of new quality productive forces and enhancing the overall quality of financial services, Hu said.