As the global economy evolves and industries become increasingly knowledge-driven, nations are looking toward new sources of growth beyond traditional sectors. One of the most promising and fastest growing of these is the creative economy—a diverse sector encompassing arts, media, design, fashion, technology, and cultural industries. According to UNESCO, the creative and cultural sectors contribute $4.3 trillion to global GDP, and generate 50 million jobs worldwide, almost half of which are held by women. These industries are expected to account for 10% of global GDP by 2030. With such staggering potential, countries with a deep history and unique heritage are tapping into their creative economy as a strategic tool for economic diversification, job creation, and international influence.

China is currently confronting economic challenges that have tempered its rapid growth, including substantial local government debt, a struggling real estate sector, and subdued domestic consumption. In response, the Chinese government initiated a series of stimulus measures in September 2024 to rejuvenate growth and bolster confidence in the economy.

The recent decline in venture capital (VC) investment in China has far-reaching consequences, not only for the startup ecosystem but also for the broader Chinese economy. Once a vibrant hub for entrepreneurial activity, China’s startup scene is now facing significant challenges as VC funding drops to its lowest levels in years. The decline in capital investment is stalling the creation of new businesses, affecting employment, and slowing the pace of technological innovation – factors that collectively threaten the country’s long-term economic trajectory and President Xi Jinping’s ambitions.

On November 8, China's National People's Congress Standing Committee (NPCSC) approved a proposal to refinance local government debt aimed at addressing the significant “hidden debt” incurred by provincial governments burdened by large unfunded mandates.

With President-elect Donald Trump returning to the White House, China faces a familiar yet unpredictable challenge. During his first term, Trump’s hardline stance reshaped U.S.-China relations, pivoting to a more confrontational approach centered on trade imbalances, tariffs, and restrictions on technology.

As President-elect Trump reenters office, China will be one of his foreign policy centerpieces. And no one should doubt his intentions. While often candidates’ tough rhetoric is softened upon taking office, in his first term, Trump managed to change both the narrative and the policy toward China away from engagement and integrating them into the global community to a limited containment approach.