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Standard Bank Group
Inside China 08 July 2026

Sizing the NPF share of GDP; and further, some scaling considerations

Jeremy Stevens

  • The New Productive Forces (NPF) share of GDP has already more than doubled, from about 8% in 2010, to c.19-20% in 2025. It has grown faster than GDP in every five-year period from 2010 to 2025. Its share of exports has reached 13.5%, triple its share a decade ago.
  • Notably, though, the growth premium of NPF over the rest of the economy is compressing as the base expands, falling from over 7 percentage points (pp) in 2015, to 4-5 pp by 2025.
  • The first decisive inflection in the NPF trajectory was payments and data infrastructure, which enabled platforms, smart logistics and credit-scoring, and laid the rails for a broader digital industrial ecosystem, rather than just consumer tech.
  • Since the cashless revolution, we have seen MIC 2025, vulnerability-driven industrial policy and, over the past three years, centralisation, with NPF as the central mobilising objective.
  • NPF spillovers are unleashing smart factories, logistics, finance and agriculture, which are increasingly data-driven. However, the multipliers are currently somewhat limited and uneven; so, frontier firms and regions are racing ahead, while most of the wider economy still adopts these technologies but only partially.
  • The central finding is that NPF is a genuine economic force and will materially improve Chinese living standards, delivering cheaper renewable power, cleaner urban transport, faster digital logistics, more automated factories. Thus, even if it does not restructure the entire economy and remains around one quarter of GDP, the sorts of technological gains unleashed with be broadly felt, and socially useful.
  • The question is whether NPF can generate sufficient aggregate demand and employment absorption to match what NPF produces. Herein, without concurrent reforms in redistribution, private sector governance, financial intermediation, and labour market adjustment, the risk is that NPF delivers isolated productivity gains without the broad macroeconomic transformation that would justify the scale of investment. The sustainable route is gradual, skill-intensive, and institutionally demanding.
  • Our base case sees NPF rising to roughly one quarter of GDP by 2035, contributing around 1 pp to annual growth, with manufacturing's share of NPF slowly giving ground to digital- and AI-intensive services. Upper bound outcomes (NPF near 27% of GDP), and lower bound outcomes (around 20%). The binding constraints are not capital or state capacity but labour quality, domestic absorption, fiscal health, financial structure, private sector confidence, export access and resource/environmental bottlenecks.
  • NPF is a durable growth margin, but profitability and policy risk mean that investors should focus on the enabling layer, rather than on the end-product cycle. The hardware chokepoints, like semiconductors grid equipment, industrial software, offer more stable demand than the assembly-stage industries where overcapacity and price wars are most acute.
 

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