Editor's note: Matteo Giovannini, a special commentator on current affairs for CGTN, is a finance professional at the Industrial and Commercial Bank of China, a non-resident associate fellow at the Center for China and Globalization, and a member of the Global Young Leaders Dialogue. The article reflects the author's views and not necessarily those of CGTN.

As the 2026 Two Sessions convenes in Beijing, international attention has again turned to China's economic outlook. Some Western media outlets have quickly focused on the government's growth target set at 4.5%-5%, portraying it as evidence of mounting economic pressure or even a failing growth model. Such interpretations, however, rely on selective reporting and overlook the broader transformation underway in the world's second-largest economy.

China is not simply pursuing growth for growth's sake. Instead, it is undergoing a deliberate transition from high-speed expansion to high-quality development – a strategic shift that reflects the evolving needs of a more mature and sophisticated economy. When placed in a global perspective, a growth rate around 5% remains among the strongest for major economies, ensuring that China continues to serve as a key driver of global economic growth.

What some critics describe as a slowdown is better understood as structural upgrading. After decades of rapid industrialization and infrastructure-led growth, China is now prioritizing efficiency, sustainability and technological progress. This transition naturally changes growth dynamics, but it also lays the groundwork for a more resilient and innovative economic model.

A central feature of this transformation is the rise of new quality productive forces. These emerging drivers are reshaping China's economic landscape and strengthening its long-term competitiveness.

The digital economy has become a cornerstone of modernization. Advances in artificial intelligence, cloud computing and digital platforms are transforming industries and boosting productivity across sectors. From manufacturing to logistics and financial services, digital integration is helping Chinese companies move up the value chain and compete more effectively in global markets.

Advanced manufacturing is another important pillar. China has made notable progress in sectors such as high-end equipment, electric vehicles, robotics and semiconductors. These industries are enabling it to transition from being primarily the world's factory to becoming a global hub for technological innovation and industrial upgrading.

Green development is equally central to this shift. China is already the world's largest producer and installer of renewable energy technologies, including solar panels and wind turbines. At the same time, the rapid expansion of the electric vehicle industry is reinforcing China's role as a leader in the global energy transition. These sectors are not only helping reduce carbon emissions but also creating powerful new engines of economic growth.

Beyond technological innovation, China's economic resilience is also reflected in the continued strength of foreign trade and the steady expansion of domestic demand.

Despite an uncertain global environment marked by geopolitical tensions and rising protectionism, China's trade sector has demonstrated strong adaptability. Exporters have diversified their markets and increasingly moved toward higher value-added products, helping maintain the country's central role in global supply chains.

At the same time, domestic consumption is playing an increasingly important role in sustaining economic stability. Rising incomes, continued urbanization and the expansion of the middle-income group are gradually shifting the growth model toward greater reliance on internal demand. Policies aimed at improving social welfare and expanding the service economy are further supporting this transition.

Another aspect often overlooked in external commentary is China's emphasis on risk management. Efforts to address structural challenges, such as local government debt and imbalances in the real estate sector, are sometimes interpreted abroad as signs of weakness. In reality, these measures reflect a proactive strategy to safeguard long-term financial stability.

Rather than allowing vulnerabilities to accumulate, policymakers are working to defuse risks while channeling resources toward more productive sectors. This process may temporarily moderate growth in certain industries, but it ultimately contributes to a healthier and more sustainable economic system.

China's development path is also shaped by its unique national conditions. With a population of more than 1.4 billion and a vast and diverse regional economy, China cannot simply replicate Western economic models. Instead, it has pursued a pragmatic approach that combines market mechanisms with strategic policy guidance.

This model has supported one of the most significant development transformations in modern history. Hundreds of millions of people have been lifted out of poverty, infrastructure has been modernized at remarkable speed, and the country has become a major contributor to global trade and innovation.

Today, the focus is no longer solely on how fast the economy grows, but on how sustainably and inclusively it develops. High-quality growth, driven by innovation, green technology and domestic consumption, represents the next phase of China's modernization.

For observers willing to look beyond headline numbers, the conclusion is clear. China's economy is not entering a period of decline. Rather, it is undergoing a complex but necessary transition aimed at strengthening long-term resilience and competitiveness. In an uncertain global economic environment, a stable and dynamic Chinese economy will continue to play a crucial role in supporting global growth and technological progress.

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