The domestic and global significance of China's new growth drivers

Editor's note: C. Saratchand, a special commentator on current affairs for CGTN, is a professor at the Department of Economics, Satyawati College, University of Delhi, in India. The article reflects the author's views and not necessarily those of CGTN.

The attainment of a 5% growth rate in the first quarter of 2026 is on account of an underlying trend in Chinese development. This indicates that the Chinese economy is undergoing qualitative transformation, driven by the maturation of "new productive forces" as the Chinese economy comprehensively ascends the technological ladder that pertains to global production networks (GPNs). This is reflected by the value added of equipment manufacturing and high-tech manufacturing which surged by 8.9% and 12.5% respectively from the fourth quarter of last year.

The emerging drivers are not merely sustaining growth against a backdrop of relative international slowdown; they are actively and sustainably reshaping both domestic demand patterns and the architecture of GPNs.

The first growth driver is the critical shift in China involving artificial intelligence (AI), digital manufacturing and green energy, simultaneously increasing both domestic supply and demand by an emerging redefinition of the interdependent contours of industry and community. This is evidenced by the production of 3D printing devices, lithium batteries and industrial robots which climbed, respectively, by 54%, 40.8% and 33.2% over the last year.

AI and digital manufacturing, by enabling economies of scale and scope, are creating a strong dialectic between the production place and the point of service. In Chinese production, AI-driven research and design, predictive maintenance and cloud data analytics are transforming manufacturing into a high-precision, algorithmically optimized ecosystem.

This digitization is generating demand not merely for more steel or concrete, but also for advanced semiconductors, edge computing infrastructure and specialized technical talent. It is also fueling a burgeoning market for smart integration, where robotics and data streams are becoming central. A necessary consequence of this trend is an economic growth path where both product and process innovation are unfolding at historically unprecedented rates.

Simultaneously, the green energy transition is shaping up to be a demand driver that is operating through the conjunction of regulation and preference reorientation. The Chinese journey towards carbon neutrality has transitioned from merely being an environmental concern into becoming a new growth driver.

This manifests in rising demand across a broad spectrum: from the minerals required for battery storage to the green retrofitting of urban and rural centers with smart grids and the proliferation of electric vehicles. This is the creation of a development process centered on electrification, materials science innovation and sustainable logistics.

In other words, the development of new productive forces is now basically self-sustaining.

The second growth driver is China's evolving role within GPNs. China has emerged as a critical node for innovation and application, including on the technological frontier, with which the rest of the world can integrate.

China's continual economic upgrading is injecting vitality into GPNs by generating all-round innovation that has international significance. For instance, advancements in lightweight materials, electric vehicles, AI and robotics, initially developed in high-performance sectors, are feeding back into many international industries, lowering costs and enhancing the potential to increase investment.

Similarly, the scale of deployment of renewable energy infrastructure in China has driven down the international cost of solar and wind power, making the green energy transition economically viable, especially for the Global South, and contributing directly to international climate mitigation efforts.

Moreover, the sophistication of China's service and manufacturing sectors is providing a template for the rest of the world. The integration of skilled workers with robotics in complex service delivery creates operational models that can be deftly adapted to address both labor shortages and efficiency gaps in other economies. This is a form of intangible export, where business processes and software-as-a-service platforms developed in the Chinese economy become internationally significant.

Perhaps most significantly, this qualitative upgrading of the Chinese economy contributes to international growth by acting as a stabilizing anchor for the resilience of GPNs. While tensions in the international political economy, as is currently the case, increase the likelihood of disruption, the deep integration of Chinese services and manufacturing with the rest of the world in terms of imports and exports tends to enhance economic stability.

By comprehensively ascending the technological ladder pertaining to GPNs, China provides both the sophisticated inputs and demand that allow manufacturing and services in the Global South and beyond to be more innovative.

Consequently, China's economic evolution guided by new growth drivers generates a strong net positive spillover effect, creating new international application scenarios that can drive forward innovation and all components of macroeconomic demand throughout the world. It is high time that the architecture of international political economy is cooperatively reworked to more fully realize these scenarios enabled by China's new growth drivers.

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