A photo shows part of the skyline in Shenzhen, South China's Guangdong Province on July 12, 2026. Photo: VCG

China's economic growth is undergoing a structural shift, with new and emerging technologies moving beyond a supporting role to become genuine drivers of growth. According to data released by China's National Bureau of Statistics (NBS) in July, the high-end manufacturing, the digital economy and the modern services contributed more than 40 percent of China's growth in the first half of 2026.

What is particularly notable is how this growth is being generated: through faster innovation and stronger technological capabilities rather than simply producing more of the same. Technologies such as artificial intelligence (AI), robotization, new energy and digitalization are spreading across sectors, supported by substantial research and development (R&D) investment and, increasingly, by commercial applications.  

NBS data show that integrated circuit output alone reached nearly 280 billion units in the first half, up 23.1 percent year-on-year, underlining how quickly this capacity is expanding.

At the same time, greater emphasis on the domestic market as a source of growth has helped the country absorb shocks from global crises and cushion the impact of geopolitical tensions and trade frictions on international trade. It has also helped offset the natural limitations of export markets.

China has also benefited from the sheer size and purchasing power of its domestic market. These advantages allow new technologies and products to achieve economies of scale and drive learning-curve gains in manufacturing, as demonstrated by the development of new-energy vehicles and renewable energy.

The expansion of sustainable public transport and continued infrastructure upgrades have not only contributed directly to GDP growth but also boosted productivity across sectors by generating agglomeration economies, spurring innovation and creating new comparative advantages.

All of this has been underpinned by growing investment in R&D. China's R&D expenditure reached 2.8 percent of GDP in 2025, exceeding the OECD average for the first time. Its R&D workforce surpassed 7.5 million in full-time-equivalent terms, making it the largest in the world. This capacity has enabled China to lead globally in patent activity and, crucially, to shorten the path from invention to industrial-scale production.

China's strategy therefore centres on combining innovation with the rapid modernization of manufacturing. Taken together, these strengths are creating long-term value and giving China genuine and durable competitiveness, not merely short-term resilience.

The rise of AI, robotics and innovative medicines, dubbed the "next new three," should be understood against the same development trajectory that has driven China's "new three" of electric vehicles, lithium-ion batteries and photovoltaic products.

As I have followed China's development closely, what stands out to me is how long this transformation has been taking shape. From the late 1980s, China began building science and technology parks and developing an ecosystem for innovation and industrial growth, while working to attract global firms in advanced manufacturing. These efforts gathered strong momentum after the country joined the World Trade Organization in 2001, alongside its wider opening-up and reform agenda.

In 2015, the Made in China 2025 initiative set out a 10-year plan to upgrade Chinese manufacturing and accelerate the transition from investment-driven to innovation-driven growth. China's R&D output has risen sharply since then.

Arkebe Oqubay Photo: Courtesy of Arkebe Oqubay

The results are evident today. New-energy vehicles, renewable energy and battery storage technologies have advanced rapidly, with costs in some areas falling by more than 90 percent over the past decade. Biotechnology and pharmaceuticals have likewise grown rapidly. Perhaps most striking is the speed with which new products now move from invention to market, supported by an increasingly resilient industrial value chain.

Beneficial, inclusive growth

China's experience therefore offers valuable lessons in building innovation-led growth, both for emerging and developing economies in the Global South. Its wider significance lies in the potential to support broader global development.

The 2026 World Artificial Intelligence Conference in Shanghai marked a significant milestone in efforts to ensure that AI development remains beneficial and inclusive. 

At the conference, China announced that it would provide developing countries with 5,000 opportunities for AI training and seminars over the next five years. It will also establish international AI application cooperation centers with the African Union and other regional organizations and help 30 countries use the AI-powered MAZU meteorological early-warning system.

These commitments matter to developing economies, particularly because AI still lacks an effective global governance framework.

At a time when protectionism is slowing global innovation and distorting fair competition, China, unlike the US, has embraced a more open-source-oriented path to AI development, helping level the playing field by making advanced technologies more accessible to emerging economies.

Looking ahead, China has considerable capacity to shape global technological development and help build a governance system that benefits all United Nations member states. China has demonstrated a clear commitment to opening-up and equitable cooperation with developing countries. The priority now is to strengthen and expand that cooperation.

Several channels can help advance this process. The United Nations remains the natural institutional home for global collaboration, while South-South platforms, including the Forum on China-Africa Cooperation, BRICS and China-ASEAN cooperation, are well suited to addressing the specific priorities of the Global South.

Institutions such as the Asian Infrastructure Investment Bank and the New Development Bank are equally important. They offer financing models that many developing countries currently struggle to obtain elsewhere.

Reforming the global governance system matters just as much. A more representative United Nations, in which developing countries are properly represented at the decision-making table, would bring fresh dynamism to the way technology and its benefits are shared. Cooperation among industry associations, the private sector and research institutions can then accelerate this process on the ground.

Ultimately, technology should be a bridge, not a barrier. How China chooses to share its technological advances will help determine whether the next wave of global development is inclusive or leaves half the world behind.

The author is a British academy global professor at SOAS University of London, a former senior minister and special adviser to the prime minister of Ethiopia. bizopinion@globaltimes.com.cn