Unexpected resilience and further economic transformation propel China's high-quality growth

Editor's note: Liu Chunsheng, a special commentator on current affairs for CGTN, is an associate professor at the Beijing-based Central University of Finance and Economics. The article reflects the author's opinion and not necessarily the views of CGTN.

While major global economies grapple with inflation and recession, China has delivered a mid-year report card featuring structural upgrades with 5.3 percent growth. The latest data from the National Bureau of Statistics reveals that China's economy is demonstrating unexpected resilience amid complex international conditions. More significantly, the improvement in growth quality is gradually surpassing the speed itself, as new quality productive forces emerge as a key driver of economic momentum.

Against a backdrop of sustained external demand pressure, China's economic foundation displays remarkable stability. The job market remains fundamentally steady, with June's CPI turning positive, signaling recovering demand. The continued rebound in core CPI during the second quarter further indicates restored consumer confidence. As the world's most industrially complete nation, China's manufacturing advantages grow more pronounced during volatile cycles. Robust growth in equipment manufacturing, especially breakthroughs in high-end CNC machine tools and industrial mother machines, has solidified the foundation of the real economy. This comprehensive industrial ecosystem forms a protective "moat" against external shocks.

Simultaneously, domestic demand continues to drive growth. Consumption contributes stably over 50 percent to economic expansion, with service consumption significantly outpacing goods consumption. Explosive growth in cultural tourism reflects immense domestic potential, while logistics efficiency improvements strengthen national circulation. Upgraded consumption and infrastructure enhancement now form a virtuous cycle. As people, goods, and capital flow more freely, the economic body gains resilience against headwinds.

New growth engines reshape development logic

The most striking transformation in the first half lies in the fundamental shift of growth drivers. High-tech industries grew significantly faster than GDP, establishing sustained leadership momentum. Breakthroughs in intelligent manufacturing stand out, with innovation conversion efficiency markedly improving—the cycle from R&D investment to industrial application is shortening at an unprecedented speed.

Digital and green dual engines propel deep structural adjustments. The digital economy's GDP share passed a critical threshold, evolving from consumer internet to industrial internet. Technologies like cloud computing and industrial IoT are reshaping traditional industries. Green transition accelerated dramatically, with new energy vehicle penetration exceeding 50 percent, marking a market inflection point. Despite trade barriers against the "new trio" exports (EVs, lithium batteries, solar panels), global production capacity distribution has diversified risks.

New consumption paradigms also redefine growth. Spending now extends beyond goods to experiential services, knowledge payments, and health management. Phenomenal cultural IP-driven consumption reflects unleashed supply-side creativity. This supply-creating-demand model is replacing traditional consumption logic across sectors, injecting sustainable momentum.

Forging resilience amid transition pains

Throughout this transformation, China's economy exhibits unique resilience, underpinned by a fundamental shift in its growth paradigm. The traditional "investment-export" dual engines are gradually giving way to a "domestic demand-innovation" driven model, where high-tech service investment maintains robust double-digit growth, and frontier fields like AI large models are accelerating commercialization at an unprecedented pace. Most notably, innovation input has transcended reliance on policy subsidies—market-driven R&D investment continues to rise steadily, a clear sign of a maturing innovation ecosystem where enterprises now take the lead in technological breakthroughs.​

Structural adjustments are deepening despite lingering challenges. While real estate investment remains in correction, manufacturing investment steadily increases its share in the economic structure, and the service sector continues to expand, particularly knowledge-intensive industries. Concurrently, the employment structure is optimizing: the digital economy has spawned a multitude of new professions, from AI trainers to renewable energy technicians, effectively cushioning job market pressures and providing essential social stability for the ongoing transition.​

Concrete progress is evident in risk mitigation efforts. The real estate sector shows early stabilization signs, with sales decline narrowing and inventory levels dropping in key cities. Local government debt risks have been alleviated through innovative tools like special refinancing bonds, significantly strengthening the financial system's shock resistance. These coordinated measures have successfully held the line against systemic risks, creating a secure environment for the economy's smooth transition toward high-quality development.

Turning China's new productive forces from vanguard to mainstay

Three pressures persist: escalating external uncertainties, lingering real estate adjustments, and fragile micro-level confidence. Yet the transition window presents greater opportunities. Policy space remains ample—fiscal-monetary coordination can intensify, and consumption stimulus may strengthen. Crucially, new productive forces are entering a self-reinforcing cycle: new energy industries built complete ecosystems from R&D to application, while digital technologies penetrate agriculture and services comprehensively.

As high-tech industries grow twice the rate of GDP and innovation factors flow freely, China's economic metabolism advances, and engine replacement inevitably brings growing pains. But mid-year data proves that new drivers aren't just emerging —they're steering economic direction.

This quiet revolution transcends growth statistics. As innovation theory reveals: true development never stems from repetitive expansion, but from qualitative leaps through "creative destruction." China's economic metamorphosis now navigates this critical phase. The core task ahead is elevating new productive forces from the vanguard to the mainstay. This demands not only continuous technological breakthroughs but synchronized institutional innovation—when innovation ecosystems optimize, market access equalizes, and intellectual protection strengthens, 5.3 percent growth will become the solid foundation for high-quality development, ensuring China's economy resilience against global turbulence.