
Four Chinese Innovation Trends to Watch in 2025
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As we enter 2025, it’s shaping up to be a pivotal year for global superpowers. The re-election of Donald Trump could either "Make America Great Again," as promised to his voters, or destabilize the U.S. both internally and on the global stage. Will AI continue driving tech giants’ valuations upward, or are we on the brink of a U.S. stock market crash? Could Trump ignite new trade wars with former allies and adversaries, and what ripple effects might this have on Europe, China, and the Global South?
On the military front, will the conflict in Ukraine finally come to an end, and how will Europe navigate its aftermath? Could the crisis in Gaza and regime change in Syria escalate into a regional war involving Iran? Meanwhile, will China manage to restore confidence in its economy, or are we witnessing the early tremors of a systemic economic shock?
Lastly, will the U.S. and even some EU countries retreat from their commitments to the 2015 Paris Climate Agreement, and will China now take the lead in steering the world toward a sustainable, green future? This year hopefully holds the answers to these critical questions, and the outcomes will undoubtedly reshape our world order for years to come.
2025 is shaping up to be another year of unpredictability, with any predictions about global trends sharply divided. Some analysts believe the U.S. will thrive while Europe struggles, while others see Trump’s return as a wake-up call for Europe to unite and strengthen its position. Opinions about China's economic trajectory differ even more. Some predict that China's economy will peak in 2025, mirroring Japan's economic stagnation post 1995. Others are more optimistic, expecting stimulus policies and innovation initiatives to kickstart a new phase of economic recovery and growth.
One thing seems clear: Western trend watchers anticipate China’s economic peak is imminent, while Chinese trend watchers predict a U.S. market crash and prolonged stagnation in Europe. Given the current global uncertainties, 2025 stands out as one of the most challenging for me, as a thought leader, to make confident predictions.
However, despite the turbulence in world affairs, I am confident in identifying four key Chinese innovation trends poised to shape the global future in 2025.
1. Chinese companies are ready to go global.
What set 2024 apart for Chinese innovation was the global recognition of the exceptional quality of Chinese New Energy Vehicles (NEVs), which took the world by storm. It was the year BYD surpassed Tesla in global car sales, marking a significant milestone. In response, both the U.S. and Europe imposed tariffs on Chinese NEVs to protect their domestic automotive industries. Meanwhile, non-Chinese car brands continued to lose market share in China to competitive local brands. 2024 also saw Volkswagen closing factories in Germany, Northvolt filing for bankruptcy in the US, and Japanese automotive giants Nissan and Honda announcing plans to merge in a bid to compete with the growing dominance of Chinese automakers.
2024 marked a significant mindset shift for Chinese companies, as they now much more confidently believe they can compete with any global brand. Looking ahead, 2025 is set to see even greater momentum for Chinese brands going global. This shift is driven by three key factors:
Chinese buyers are trading down, making global markets increasingly attractive for Chinese companies.
Chinese brands have closed the quality gap with Western competitors, positioning themselves as globally competitive players.
Biden’s technology war against China has inadvertently boosted self-confidence in Beijing and among Chinese producers, encouraging them to view global markets as strategic opportunities for expansion rather than mere export destinations.
South-East Asia and the Middle East are seen as mid-term investment and growth opportunities, while Europe is viewed as a short-term market focused on profit and brand establishment.
2. Chinese Large Language Models (LLMs) will rise as a phoenix
In the final days of 2024, the Chinese startup DeepSeek launced a groundbreaking open-source AI model (DeepSeek V3). This model outperformed Meta ’s Llama 3.1 and Alibaba’s Qwen 2.5, while delivering results on par with OpenAI’s ChatGPT-40 and Amazon’s Claude 3.5.
The most significant achievement, however, was the efficiency and speed of its development. The Chinese research lab trained the model in just two months, using GPUs that cost only $5.5 million USD, a stark contrast to the hundreds of millions or even billions spent by American competitors.
What sets DeepSeek V3 apart is its mixed-model architecture. Instead of relying on a single monolithic approach, it activates different sub-models dynamically to optimize performance for specific token-generation tasks. This design reduces inference costs, enhances scalability, and improves latency and processing speed. DeepSeek V3 not only demonstrates technical excellence but also signals a new era of co