The Chinese consumer market and innovation-driven sectors continue to show robust growth momentum, presenting significant opportunities for businesses that can successfully navigate the competitive landscape, according to Joe Ngai, Senior Partner and Chairman of McKinsey Greater China.
In an interview on the sidelines of the World Economic Forum Annual Meeting 2026 held in Davos, Switzerland, Ngai pointed to strong underlying demand, particularly in services and specific goods categories, as a key positive signal for the Chinese economy.
"If you look at consumer demand, especially around areas like services, I mean, don't underestimate the fact that last year was the year where Chinese services was growing actually very, very fast. Look at travel, look at tourism, look at a lot of the non-fiscal goods. I think that consumption has been going up. If you look at actually, even this year, white goods -- a lot of the appliances, electric vehicles, that has been growing up. I think when you look underneath the hood, there's actually quite a lot of positive signals on the consumption side. If you look at this year, what they're trying to do, I do think that the Chinese consumers will be increasingly an important part of the Chinese economy. And I think that that is something to look forward to," Ngai said.
He also identified innovation as a powerful engine for growth.
"In China, there's actually the old economy and there's a new economy, but the new economy is all the things that we're talking about, AI, EVs, batteries, right? All these things, we have robotics and new life sciences, biotech and all those, we are growing as fast as ever before, right? This is something where they are globally competitive. So I think what is important in China these days is how do you align yourself? How do you use technology? How do you use these new ways to position yourself in the right swim lanes so [that] you're in the growing part of the economy and not in the suffering part of economy. And that's really like my message to all clients. It's like, where are you? And if you're in the wrong swim lane, you better get yourself over there. Otherwise you'll be suffering," he said.
Addressing China's business environment, Ngai described the market as intensely competitive but open, suggesting that success there builds global competitiveness.
"I think the Chinese economy has always been quite open to foreign businesses. The difficulty is actually the competition itself in China, right? So in China, it's not like the Chinese company competing against the multinational. It's every company competing with everybody, right? So in many ways, when you go into China, this is like, I call it the world's toughest gym, right? So the question for them is not whether China is open or not, it's whether they are competitive enough to serve the Chinese consumers who are discerning, who are intensely looking at all the deals out there, looking for value for money, right? And how do you compete and do well in there?" Ngai said.
"The flip side, though, is if you can win in China, you're pretty competitive in rest of the world. So we do encourage multinationals to say, well, you are going to get into that gym, because if you're fit in there, you go to the rest of the world in those gyms, you're pretty good," he said.
Services, hi-techs bolster China's economic resilience: McKinsey China chair
