China Research

China has in recent decades developed into a political and economic global powerhouse, passing by Russia in superpower terms and – in many respects – getting much closer to the United States. Is China in other words regaining its own historical status as the “Middle Kingdom” which still serves as the classical name for the modern China?

“Zhongguo” – then and today

In English, one usually applies the term of “Middle Kingdom” for the old China from back to some thousand years ago. Swedes speak about the “Mittens rike” and Germans about the “Reich der Mitte” – all of them expressing something like the “empire or country of the middle”.

Historically, the Chinese have been defining their country as “zhongguo” of which “zhong” meant middle and “guo” something like state or country. In the beginning, “zhongguo” was standing for the flourishing region along the Yellow River but started later to describe China as the self-image center of the universe. And still today, “zhongguo” is widely used by the Chinese and aims at the country as a whole and its sovereignty.

When regarding the latter aspect, I remember many discussions with the Chinese in the past two decades or so who seemed to be convinced that China rapidly was about to be re-organized as the political and economic center of the world. In many respects – though not all – this scenario of China’s ongoing move to really becoming the political and economic center of the modern world – is on its way to come true.

At least, we can recognize already some revival of the historical Chinese “Magic Kingdom” as the/a global center. But the Chinese political leadership certainly wants more than “some revival” …

I wish today all readers all the best until I come back after my summer break.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University

Through many years, I have questioned the quality of Chinese official statistics. Sometimes, one can hear or read about statistical improvements. This may be partly the case – but who knows? Doubts are still in place, underlined by the competent research of BOFIT which is linked to the Finnish central bank, Suomen Pankki.

Worrisome domestic and global economic environment

According to the National Bureau of Statistics (NBS) in Beijing, Chinese GDP grew by 5 percent in Q1 of 2026 compared to Q1 last year. This is actually on the upper end of the growth objective of 4.5-5 percent for 2026 as a whole, despite all domestic and international distortions and wars. However, transparency of this development remains limited.

5 percent of economic growth in Q1 has been managed officially despite all the worrisome developments at home and internationally. GDP-growth rates remain unbelievably stable in China. Domestically, China is facing the the ageing population, the imbalanced property sector, major debt problems locally, and uncertain consumers – major challenges alongside all the technological achievements. On the other hand, official statistics also showed that investments and exports performed quite well in the beginning of 2026.

For example, exports grew by 20 percent to ASEAN countries (Q1 in value terms), by 32 percent to Africa and by 9 percent to Latin America. However, exports to the U.S. continued to decrease (-16 percent). 

Anyway, I still wonder for how long time or whether Chinese policy makers can continue to manage their dual economy simultaneously, the lagging and the leading one. An answer still cannot be given. 

The alternative calculation of BOFIT

Finnish research institute BOFIT (The Bank of Finland Research Institute for Emerging Economies, https://www.bofit.fi/en ) in Helsinki is well-known for its research on emerging economies, nowadays particularly on China, Russia and also the Ukraine. BOFIT publishes regularly important statistical indicators on these countries (https://www.bofit.fi/en/monitoring/statistics/) – but also an alternative China forecast on its own which contrary to NBS gave a slight slowdown in Q1 (https://www.bofit.fi/en/monitoring/statistics/alternativeindicatorsofchinaseconomicgrowth/). 

Nota bene: BOFIT’s next forecast on China will be published on May 5.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University