Stability was reflected in the consistent performance of key macroeconomic indicators. In H1, China’s GDP reached 66.05 trillion yuan ($9 trillion), surging by 5.3 percent year on year. Growth came in at 5.4 percent in the first quarter (Q1) and 5.2 percent in the second (Q2), resulting in a 0.3-percentage-point increase over both the same period and the full year of 2024, when GDP growth was 5 percent. These figures suggest that while growth has remained steady, it has also shown a modest upward trend.
Economic transformation and high-quality development made new progress.
Innovation prompted the rapid rise of new industries, technologies and business models. In 2024, the combined value added by these emerging sectors made up about 18 percent of GDP. That momentum carried into this year, with hi-tech industries growing by 9.5 percent in the first half.
The domestic market became more active. In response to external pressures, the Central Government has introduced several policies to boost domestic demand, support production and facilitate circulation.
“Overall, more proactive and targeted macroeconomic policies have produced tangible results in H1, with the economy continuing its steady recovery and showing strong resilience and vitality,” Sheng said. “At the same time, challenges remain. External uncertainties persist, domestic demand is still insufficient and the foundation for sustained recovery needs further reinforcement.”
Structural upgrade
In H1, the three driving forces of the economy—final consumption expenditure, gross capital formation and net exports of goods and services—contributed 52 percent, 16.8 percent and 31.2 percent to economic growth, respectively.
“Domestic demand, particularly consumption, has emerged as the primary engine driving GDP growth,” Sheng said.
Retail sales of consumer goods reached more than 24.54 trillion yuan ($3 trillion), marking a 5-percent increase year on year. In Q2, growth accelerated to 5.4 percent, up 0.8 percentage points from Q1, suggesting that China’s consumer engine is gaining speed, though not yet at full throttle.
“The consumer goods trade-in program (which incentivizes households to replace old appliances, electronics and vehicles with newer, energy-efficient models through subsidies and discounts—Ed.) has had a major and immediate impact on spurring consumption,” Guo Liyan, deputy head of the Economic Research Institute of the National Development and Reform Commission, said at the Guoshi Forum on the Chinese economy, hosted by China News Service in Beijing on July 15.
Key product categories under the program, such as household appliances, cultural and office supplies, communication devices and furniture, posted strong double-digit growth, she said.
An anchor of stability
China’s total import and export volume reached 21.79 trillion yuan ($3 trillion) in H1, a 2.9-percent increase year on year and the highest level ever recorded for the period. Notably, exports alone exceeded 13 trillion yuan ($2 trillion) for the first time in a first-half cycle, a strong 7.2-percent growth.
“The data underscore the resilience of China’s foreign trade,” Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, said at the forum.
“What matters is continuity,” he added, pointing out that China’s foreign trade has expanded for seven consecutive quarters, nearly two full years.
Quality homes
In H1, China’s fixed assets investment reached 24.87 trillion yuan ($3 trillion), up 2.8 percent year on year. Stripping out real estate, the growth rate stood at 6.6 percent.
Sheng said as China enters a new stage of development, investment in traditional industries has largely plateaued. Real estate investment, for example, continued to decline in H1. These structural adjustments are adding short-term pressure to overall investment growth.
“Still, the investment structure is showing clear signs of improvement,” he said. In the first six months, manufacturing investment rose by 7.5 percent, accounting for 25.2 percent of total fixed assets investment. Investment in hi-tech services surged by 8.6 percent, well above the average.
Positive expectations
“China’s 5.3-percent GDP growth in H1 reflects not just economic resilience, but also the strong support from sustained fiscal and monetary policies,” Ming Ming, chief economist at CITIC Securities, China’s largest securities firm by assets, said at the forum.
He said the fiscal policy has become noticeably more proactive. For instance, 1.3 trillion yuan ($181 billion) of ultra-long-term special government bonds—those with a term of more than 10 years—was issued, 300 billion yuan ($42 billion) more than last year. Support for the consumer goods trade-in program doubled from 150 billion ($21 billion) to 300 billion yuan ($42 billion).
Ming expects more pro-growth policy measures in H2. However, given the strong macroeconomic performance in H1 and the substantial use of existing policy resources, any additional stimulus will likely come from innovative policy tools, he said.
These tools, he believes, will focus on support for the service sector and consumer spending. BR
-The Daily Mail-Beijing Review News Exchange Items
