China's economic trajectory in 2026 will no doubt look sanguine

Editor's note: Huang Yongfu is a special commentator for CGTN on economic affairs. After earning a PhD in economics, he started his career at the University of Cambridge and then moved on to the UN system. His current interests lie in Sino-US links and global development. The article reflects the author's opinions and not necessarily the views of CGTN.

The ongoing annual Two Sessions has unveiled the annual economic growth target for the year 2026, the opening year of the new five-year plan. At a time when the international order is undergoing dramatic turbulence, whether China can achieve long-term resilience and sustainable prosperity has drawn increasing global attention.

According to the annual China's statistical communique on the 2025 national economic and social development plan, the Chinese economy has demonstrated remarkable resilience in 2025, with GDP reaching 140.19 trillion yuan (about $20.4 trillion), up 5% year-on-year.

The figure depicts an economy that is more structurally balanced with a higher share of services and a greater contribution of consumption. The tertiary industry grew (by 5.4%) faster than the primary industry (by 3.9%) and the secondary industry (by 4.5%). Final consumption expenditure contributed 52% to GDP growth, compared to 44% in 2024.

The economy is more innovation-driven, with robust expansion in advanced manufacturing and a continued move-up in global value chains. Total expenditures on research and development rose 8.1% year-on-year, accounting for 2.8% of GDP. The purchasing managers' index for high-tech manufacturing in February stood at 51.5%, significantly higher than the overall manufacturing sector index.

In general, China's economic resilience so far should be attributed to its economic strategy, including artificial intelligence (AI) and digital transformation, a strategic boost of domestic demand and investment, a proactive response to geopolitical tensions and a continuous transition toward a green and inclusive economy.

Essentially, China's economic trajectory ahead will increasingly depend on its modernization process, driven by AI, rooted in culture and shaped by uncertainty caused by geopolitical tensions.

Modernization driven by AI

From the meteoric rise of large language models such as ChatGPT and DeepSeek to the rapid expansion of NVIDIA's market share, recent years have seen a range of breakthrough developments in AI technology and its applications. It has expanded across all domains, poised to reshape industries, economies, societies and international relations.

The implications of China's strategic embrace of digital technology and AI are profound, which has not only been reshaping traditional industries but also driving the development of emerging sectors.

Supported by the world's most dynamic digital consumer market and an abundance of real-world industrial test-beds, China is accelerating the formation of a self-sustaining domestic ecosystem that integrates computing power, foundational models and applications. The "AI+" initiative continues to expand across sectors, embedding intelligent technologies deep within the real economy.

Chinese humanoid robots are moving out from research labs into every sector of the economy. With mobile robots, the multi-agent coordination under centralized cluster scheduling is driving manufacturing toward stable, flexible and automated operations, including unmanned logistics and automated material handling.

At the 2026 Spring Festival Gala, humanoid robots debuted with highly sophisticated performances. The 2026 Spring Festival Gala stunned global audiences even further, offering a vivid snapshot of what China calls new-quality productive forces. Robots from Unitree Robotics completed an advanced "Airflare" seven-and-a-half spin, nunchaku routines, and "Drunken Fist" maneuvers. Hundreds of humanoid robots demonstrated autonomous decision-making in folding clothes and cooking. Today, China's AI industry holds immense potential to make a significant global impact.

Modernization rooted in cultural continuity

China's tourism sector has become a strategic pillar industry, contributing to domestic consumption and its growing global appeal. China has the world's biggest domestic tourism market and is a major destination for foreign tourists.

Recent years have witnessed China's surging tourist market. Take the 2026 nine-day-long Spring Festival holiday, the longest on record, as an example. According to data released by the Ministry of Culture and Tourism, both the number of trips made and total expenditure hit historic highs, with 596 million domestic visits being made during the nine-day holiday, while total domestic tourism spending reached 803.48 billion yuan, up 126.48 billion yuan year-on-year. Data from the National Immigration Administration showed that nearly 17.8 million cross-border and cross-boundary trips were recorded during the holiday, up 10.1% year-on-year.

Culture is the soul of tourism. China has more than 5,000 cultural relic protection and exhibition institutions, with about 760,000 immovable cultural relics nationwide and 108 million movable cultural relics in national museums.

To improve attractiveness, some cities try to make the most of their own attractions by leveraging state-of-the-art technologies. For example, the port city of Quanzhou in south China's Fujian Province has tapped the potential of its unique history and culture as the starting point of the ancient Maritime Silk Road to hold a number of cultural events, attracting a large number of young travelers.

Harbin, in north China's Heilongjiang Province, hosts the annual Harbin International Ice and Snow Festival, which attracts artists from around the world to create ice and snow sculptures every winter, as well as a large number of tourists. Southwest China's Chongqing city has been using its picturesque geographical features to develop an array of unique tourism products and music programs, bringing history and culture to life.

Many tourism destinations offer opportunities for visitors to reconnect with nostalgia and cultural roots through lively "village gala" celebrations, temple fairs, intangible cultural heritage performances, heritage-themed attractions and immersive cultural parks.

At the 2026 Spring Festival Gala, the "Ancient Rhythm of the Silk Road" segment used extended reality to make it appear as if dancers were stepping out of millennium-old cave paintings, bringing Dunhuang murals to life. Integration of a thousand-year-old ancient heritage with state-of-the-art technologies reflects a nation's confident revival of traditional culture in contemporary settings.

Uncertainty caused by geopolitical tensions

China's economic policies are being shaped against rising geopolitical tensions with the US-led Western economies, for example, trade conflicts.

Through initiatives such as the "Pax Silica" supply-chain framework, the United States aims to consolidate advantages in semiconductors, high-performance computing and large language models.

In addition to semiconductor export controls, the United States has viewed AI as a defining variable of national competitiveness and has aimed to "win the AI race." The US has adopted a competitive approach characterized by loosening domestic regulatory constraints and tightening export controls. China has been committed to developing home-grown alternatives to foreign chip technology.

In short, China's economic trajectory in 2026 will no doubt look sanguine, as China, with "cultural confidence," is heading toward a new digital civilization by pursuing technological development and cultural preservation simultaneously. The alignment between cultural pride and industrial progress will create a stable, cohesive social fabric, fostering shared prosperity and cultural brilliance. The fusion of cultural continuity and technological progress is shaping a new chapter in human civilization.

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