Global South powers new growth

By deepening ties with multiple partners based on their national interests, developing countries have grown into a pivotal ‘middle force’ in an increasingly polarized world

The world economy trudged forward in 2025 amid intensifying geopolitical rivalry, the Ukraine crisis, frequent regional conflicts, climate change, combined with food and energy security crises. According to the World Bank, over 830 million people globally lived in extreme poverty in 2025. Concurrently, the Western-dominated architecture of global governance showed signs of faltering.

Following Donald Trump’s return to the White House, the closure of the flagship foreign aid agency — the US Agency for International Development — precipitated a 9 percent year-on-year drop in total official development assistance from developed countries, with 22 donor nations following suit. This dealt a significant blow to the traditional multilateral development governance system.

The undercurrent of protectionism continued to surge. Trade policies characterized by high tariff barriers and the promotion of industrial reshoring and “friend-shoring” severely disrupted global supply chains and dampened trade growth. The International Monetary Fund forecast that global economic growth would slow from 3.3 percent in 2024 to 3.2 percent in 2025.

Performance across the advanced economies has been particularly weak. The G7 is forecast to expand at an average rate of just 1.2 percent in 2025, with the United States, the eurozone and Japan expected to grow by only 2 percent, 1.2 percent and 1.1 percent, respectively, marking a notably diminished contribution to worldwide growth.

Amid the shifting tides of global economic “decentralization”, the Global South — comprising emerging markets and developing economies — has displayed striking resilience and vitality in the face of headwinds.

In 2025, these economies are projected to expand by 4.2 percent on aggregate, a pace more than three times that of the G7 average, and are set to contribute close to 80 percent of global growth once again.

This outperformance is fueled by distinct regional dynamism across emerging markets and developing economies. Asia leads globally with an expected growth of 5.2 percent, where China’s sustained recovery and a manufacturing rebound across Southeast Asia have partly offset dampening effects from external trade tensions. Sub-Saharan Africa is forecast to grow by 4.1 percent, supported by stabilizing commodity prices and the gradually materializing benefits of deeper regional integration, driven by the African Continental Free Trade Area. Even in regions with more moderate expansions, such as Latin America and the Caribbean at 2.4 percent, or those facing conflict-related challenges, such as the Middle East at 3.5 percent, internal structural adjustments and continued regional cooperation are fostering positive momentum.

The IMF indicates that the Global South is no longer the “vulnerable zone” of the world economy but has emerged as a critical new engine driving growth amid global adversity.

The momentum of the Global South in 2025 reflects more than a passing phase; it is the culmination of sustained strategic choices and cooperation forged over decades. Confronted with intensifying major-power competition, the vast majority of these nations have consciously refused to “take sides”, adopting instead pragmatic and non-aligned foreign policies. By leveraging their collective agency to deepen ties with multiple partners based on their own national interests, they have grown into a pivotal “middle force” in an increasingly polarized world order. This strategic autonomy has secured them broader policy space and unlocked diversified pathways for growth.

Mechanisms centered on South-South cooperation are transforming from vision into tangible growth drivers. Major initiatives and platforms — such as the expansion of the BRICS cooperation mechanism, high-quality Belt and Road cooperation and the AfCFTA — are advancing “hard connectivity” in infrastructure, and “soft connectivity” in rules, standards and people-to-people exchanges. The scope of cooperation is swiftly expanding beyond traditional sectors such as roads, ports and energy into new frontiers such as the digital economy, green technology and artificial intelligence. A United Nations Conference on Trade and Development report indicates that South-South trade expanded around 8 percent in the first half of 2025, surpassing the global average of 6 percent. Asia has contributed the largest share to world trade growth in 2025, solidifying its role as the core driving force of global supply chains. Consequently, a more resilient internal circulation and cooperation network, which is less dependent on traditional Northern markets, is taking shape at an accelerated pace.

Simultaneously, the Global South is actively seizing green and digital transitions as strategic opportunities for leapfrog development. On the green front, a climate-pragmatic approach prevails. Nations integrate emissions reduction with development goals, treating clean energy as a new growth lever. For instance, Indonesia is building a domestic battery industry, while Chile is advancing its national lithium strategy — both aiming to move up the global value chain.

In the digital realm, from Africa’s continent-wide digital transformation vision to Southeast Asia’s push to attract semiconductor and electric vehicle supply chains, many countries are skipping traditional industrial phases. This momentum is supported by large youth populations, a growing middle class and more integrated and resilient regional industry chains. Together, these factors are creating a virtuous cycle of “consumption upgrading driving industrial upgrading” within domestic markets, which now serve as a crucial buffer against external shocks.

Looking ahead, the challenges remain formidable. The IMF forecasts a further slowdown in global growth to 3.1 percent in 2026, with the G7’s average growth projected to be just 1.1 percent, 2.1 percent for the US, 1.1 percent for the eurozone and 0.6 percent for Japan. The Global South faces a complex landscape of internal and external challenges. Internally, pronounced structural contradictions persist. Governance capacity and policy continuity require strengthening in many economies, which remain locked in mid-to-low positions in global value chains, heightening their systemic vulnerability. Externally, they are exposed to a dollar-centric international monetary system and financial volatility, while their voice in global economic governance remains inadequate. The stability of the multilateral trading system is threatened by protectionism, and technological disruptions — such as the rise of AI — risk exacerbating existing digital divides.

As a committed member and major development partner of the Global South, China is continuously advancing high-standard opening-up and collaborating with others to address common challenges. Through high-quality Belt and Road cooperation, it fosters multidimensional connectivity — sharing not only capital but also technology, expertise and development experience. From electric vehicle supply chains in Southeast Asia to digital infrastructure hubs in Africa, these efforts help partner countries move up global value chains.

China’s proposals, including the Global Development Initiative, Global Security Initiative, Global Civilization Initiative and Global Governance Initiative, offer constructive pathways for enhancing global governance. Meanwhile, institutions it initiated or cofounded, such as the Asian Infrastructure Investment Bank and the New Development Bank, have become key actors in bridging the global development financing gap through their efficient and pragmatic operational models.

As former Ethiopian president Mulatu Teshome remarked at the 2025 Understanding China Conference, “The success stories registered by the ‘Chinese path to modernization’ model offer a new option to other developing nations.”

The author is a special research fellow at the Beijing Research Center for Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and a professor at the Belt and Road School at Beijing Normal University.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.