Gordon Chang
“China’s economy has rebounded and is on an upward trajectory, with its GDP for the year expected to pass the 130 trillion yuan mark,” Xi Jinping said in his 2025 New Year message.
On December 26, China revised upward its gross domestic product figure for 2023 by 3.4 trillion yuan, a 2.7% adjustment. That puts the size of the Chinese economy that year at 129.4 trillion yuan or $17.73 trillion. Xi’s target for the size of the economy, therefore, is easy to reach.
There is, as usual, great optimism displayed by Beijing leaders about the size of the Chinese economy. Few of the official numbers make sense, however, as reported figures are hard to reconcile with, among other things, large cash outflows from the country.
For instance, China experienced the largest outflow from its financial markets in November, as Chinese banks wired $45.7 billion offshore. The amount, announced by the State Administration of Foreign Exchange, includes repatriation of foreign investment in China and Chinese residents’ purchases of offshore securities.
Why the large withdrawals? “The rising tide of outflows signals souring sentiment toward the Asian nation as U.S. President-Elect Donald Trump’s vow to impose 60% tariffs on Chinese goods threatens to decimate trade between the two nations,” reports Bloomberg.
The problem appears to be more fundamental than that, however. Outbound flows started well before the Trump tariff threats were made: The Wall Street Journal in late October reported that, based on its calculations, “as much as $254 billion might have left China illicitly in the four quarters through the end of June.”
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