By combining GDP and GNI, China is transforming its development into a people-centered economy while strengthening its role in the global economy.
Heavy equipment from Taiyuan Heavy Machinery Group, July 1, 2025
The 4th Plenary Session of the 20th Central Committee of the Communist Party of China (CPC) reviewed and adopted the Proposals of the CPC Central Committee for Developing the 15th Five-Year Plan for Economic and Social Development (hereinafter referred to as the Proposals). Wang Wentao, secretary of the CPC leading group and minister of the Ministry of Commerce, stressed that during the 15th Five-Year Plan period, China will adopt an integrated approach combining GDP (gross domestic product) and GNI (gross national income). While developing the “Chinese economy”, the country would also pay increased attention to the “economy of the Chinese”.
This formulation marks a strategic upgrade of China’s economic development concept, reflecting a transition from a traditional production-centered approach to a more holistic and people-centered vision. The key lies in the shift from an emphasis on “national production” to integrated planning of “national wealth”, promoting a profound transformation of the development paradigm.
Two indicators for a complete view
GDP measures the result of the production activities of all resident units within a country, thus reflecting the economic production carried out in a given territory. GNI, on the other hand, is GDP plus net income from abroad, such as investment profits or income from cross-border work, providing a more comprehensive view of a country’s real wealth.
If GDP indicates where production takes place, GNI reveals who earns the income. While GDP focuses on domestic production, GNI covers a broader scope. For example, profits made by Chinese companies from factories or subsidiaries located abroad are not included in GDP, but appear in the calculation of GNI.
These two indicators do not replace each other; they are closely linked and complementary. The concept of “Chinese economy” is based on national production and constitutes the basis for stabilizing employment and protecting living standards, while that of “economy of the Chinese” emphasizes the capacity of citizens to mobilize and allocate resources on a global scale, including income from foreign assets and the establishment of multinationals. Together, these two dimensions represent two sides of the same coin of national power.
According to data from the Ministry of Commerce, by the end of 2024, China had more than 50,000 overseas-based enterprises spread across 190 countries and regions. The stock of overseas direct investment exceeded $3 trillion, placing China among the top three global investors for the eighth consecutive year and accounting for 7.2 percent of total foreign investment globally.
Chinese manufacturer Wuling launches its fully electric and hybrid minivans in Tangerang, Indonesia, on November 5, 2025.
GDP and GNI for integrated and competitive development
Coordination between GDP and GNI, as well as taking into account “Chinese economy” and “Chinese people’s economy”, is a key step for China to promote a higher level of opening-up and achieve high-quality development.
On the one hand, this approach strengthens the resilience of the economy in the face of global fluctuations. In the face of rising deglobalization trends, relying solely on GDP leaves the economy vulnerable to disruptions in international supply chains. Increasing GNI involves encouraging businesses to invest and cooperate abroad, in order to better integrate global resources. The Proposals highlight the importance of expanding cooperation space for bilateral investments, which not only helps attract foreign capital and improve domestic industrial chains, but also enables China to expand internationally and share global development opportunities.
On the other hand, this strategy promotes the transformation and upgrading of the economic structure. GNI growth increasingly depends on the export of high value-added factors, such as technology and brands. If the Chinese manufacturing sector has maintained a world-leading size for fifteen years, overseas investments in high-tech sectors still have significant potential. Encouraging Chinese companies to expand their activities globally, i.e. promoting the “Chinese economy”, allows them to engage in more advanced international competition, advance industries along the global value chain and move from “Made in China” to “Created in China”.
Finally, this approach also constitutes an essential path towards common prosperity. GNI growth contributes to domestic socio-economic development through the repatriation of profits, tax revenues and job creation. Profits made abroad can thus be reinvested to finance technological innovation and improve social well-being in China. Moreover, management experience and international vision acquired in transnational activities enhance the competitiveness of domestic industries, creating a virtuous circle in which global integration increases corporate power and subsequently benefits the domestic economy.
Building a high-level open economic system
The plenary session proposed expanding high-level opening-up and ushering in a new era of win-win cooperation, as well as expanding the cooperation space for bilateral investment and promoting high-quality cooperation under the Belt and Road Initiative (BRI). These guidelines show that China is committed to building a high-level open economic system, the central goal of which is to align domestic regulations with the high standards of international trade agreements, to create a more stable, transparent and predictable environment for global investors and Chinese companies.
To facilitate foreign investment, China is continuing to simplify market access. Restrictions in the manufacturing sector have been removed entirely, and pilot projects have opened up service sectors such as healthcare and telecommunications. By reducing the negative list and optimizing the business environment, the aim is to direct foreign investment to advanced manufacturing, digital economy and other sectors.
To support the globalization of national companies, policies encourage them to expand their activities abroad via mergers and acquisitions or ex nihilo project investments. Under the BRI, Chinese direct investment in partner countries is increasing steadily, promoting the sharing of technology and management expertise, especially in high-speed railways and new energy.
Finally, openness also results in harmonization of rules. China is actively seeking to align its regulations with those of high-level international agreements, such as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA), demonstrating its determination to continue reforms and strengthen economic opening-up.
From GDP to GNI for global development
The coordination between GDP and GNI also offers a Chinese perspective for global economic governance. This concept provides developing countries with a framework to explore trajectories adapted to their own context.
By balancing efficiency and equity, GNI growth helps expand the national wealth pie, thereby providing a material basis for reducing income gaps. It also helps build resilience to risk, and diversifying assets globally can reduce the impact of single market volatility.
In 2024, BRI partner countries accounted for more than half of China’s foreign trade, effectively mitigating the impact of demand fluctuations in the European and American markets.
The “Chinese economy” also encourages the sharing of development benefits with host countries, promoting inclusive globalization. The commissioning of the China-Laos railway has significantly boosted Laos’ GDP, concretely illustrating the principle of win-win opening.
The transition from a model centered on GDP to an approach combining GDP and GNI, and from the “Chinese economy” to the “economy of the Chinese”, marks a profound transformation in the conception of development. It reflects China’s desire to participate in global economic governance with a more open posture and, by building a new development model, to realize the historic shift from “the world’s factory” to the “global value creator”.
The ultimate goal of this strategic reorientation is to fully benefit all citizens from the fruits of development and achieve mutual benefit on a global scale, bringing Chinese wisdom and strength to the global economic governance system.
*WAN ZHE is an economist and professor at Beijing Normal University.
