China posts resilient H1 growth as 15th Five-Year Plan gets underway

While geopolitical tensions and trade frictions continue to weigh on the global economy, China posted steady growth in the first half (H1) of 2026, demonstrating solid resilience as the world's second-largest economy embarked on its 15th Five-Year Plan (2026-2030).

The country's gross domestic product (GDP) grew 4.7% year on year in the first six months, data from the National Bureau of Statistics (NBS) showed on Wednesday. In the second quarter, its GDP expanded 4.3% year on year.

The Chinese economy has "operated within an appropriate range against pressure," continuing to demonstrate strong resilience, the NBS said in a statement, pointing to bright spots such as robust growth in production and supply, stable employment and rapid expansion in new growth drivers.

China's GDP grew 5% year on year in the first quarter. The country has targeted 2026 growth at 4.5 to 5% and will strive for better in practice.

Resilience amid global headwinds

"The growth pace is in line with the annual target," Mao Shengyong, deputy head of the NBS, told a press conference. He said this steady economic performance has laid a solid foundation for achieving major annual targets, particularly the economic growth target.

Although growth moderated in the second quarter, he attributed the slowdown mainly to "short-term factors and external influences," saying the economy remained on a stable footing, with its underlying trend toward innovation-driven and high-quality development unchanged.

Noting that the external environment has become more complex and uncertain, Mao said China's economic strength has helped the country effectively navigate risks and challenges, citing adequate energy supply, mild inflation and solid foreign trade performance in the first half of 2026.

Wednesday's data showed that China's surveyed urban unemployment rate stood at 5% in June, down from 5.1% in the previous month, while per capita disposable income went up 5.2% year on year in the first half of the year.

In the January-June period, the country's value-added industrial output rose 5.4% year on year, and its total retail sales of goods and services, a major indicator of the country's consumption strength, increased by 2.7% year on year.

Mao said the global economy has seen new changes since the beginning of this year, particularly in the second quarter, with major economies expected to experience slower growth.

The International Monetary Fund, he noted, recently cut its forecast for global economic growth this year to 3.0% but raised that for China's full-year growth by 0.2 percentage points.

"The stability and resilience demonstrated by China's economy have provided valuable support for the increasingly uncertain global economy," said Kuang Xianming, deputy head of the China Institute for Reform and Development.

Kuang added that the country's economic transformation and upgrading are unlocking the potential of its vast market, helping stabilize global supply chains and ease inflationary pressures. Meanwhile, its support for free trade and economic integration is providing greater certainty amid geopolitical tensions.

Thriving new engines

Behind such resilience are stronger new growth engines and improving economic quality. NBS data revealed that new growth drivers, represented by high-end manufacturing, the digital economy and modern services, contributed over 40% to economic expansion in the first half of 2026, while energy consumption per unit of GDP declined 1.9% year on year.

The rise of new quality productive forces is particularly evident in the manufacturing sector. Of the 16 factories newly recognized as "lighthouse factories" by the World Economic Forum last month, a designation for manufacturers that excel in deploying advanced technologies, over half are located in China, spanning sectors from ship-making to smart logistics.

The services sector further strengthened its role as a key driver of economic growth. In the first half of 2026, the value added of the services sector increased 5.2% year on year, outpacing overall economic growth by 0.5 percentage points.

Economists also attributed the sound H1 performance to China's complete industrial system, its vast domestic market and increasingly effective macroeconomic policy support.

In the outline of its 15th Five-Year Plan unveiled in March, the country has pledged to focus efforts in areas including modernizing its industrial system, developing new quality productive forces and building a robust domestic market.

Earlier this week, notably, China rolled out its first five-year plan dedicated exclusively to expanding consumption, aiming to unlock the full potential of the country's super-large market, optimize the consumption structure and improve people's livelihoods via targeted measures.

Mao said he expects the strong momentum of new growth drivers to extend into the second half of 2026, while the effects of previously introduced policy measures will become increasingly evident.

"The government will also introduce more proactive and targeted policies in response to changing circumstances to keep the economy running steadily and promote high-quality, innovation-driven development," he added.

Han Wenlong, a professor at the Southwestern University of Finance and Economics in Sichuan Province, said he is confident that China's economy will maintain stable growth in the rest of this year, putting it well on track to meet the annual growth target.

In particular, he said recovery in consumption, supported by targeted policy measures, will further boost domestic demand and provide crucial support for growth, making it a key driver of the country's continued economic improvement.