Illustration: Xia Qing/GT

True strength is revealed in the storm; backbone is forged through trials. 

In the first half of this year, China's economy advanced under pressure and maintained an overall steady trajectory of development oriented toward the new and the better. The gross domestic product (GDP) grew by 4.7 percent year-on-year. We effectively responded to external changes such as geopolitical conflicts and trade frictions, and skillfully navigated complex domestic conditions marked by strong supply and weak demand, as well as the overlapping of old and new challenges. The results achieved are hard won and truly valuable.

Measured against China's target, 4.7 percent is a growth rate that meets expectations. The annual economic growth target set by China's two sessions is 4.5 percent to 5 percent. The 4.7 percent growth in the first half of this year falls within this reasonable range, aligning with the Communist Party of China Central Committee's scientific assessment of the economic situation and its policy arrangements. It has laid a solid foundation for a good start to the 15th Five-Year Plan period (2026-30). 

Key economic indicators have operated steadily; employment and prices have remained stable; and the 4.7 percent growth rate is broadly consistent with current conditions in factor supply, technological progress and institutional innovation. It is a realistic pace that matches China's potential growth rate. Major economic provinces generally grew faster than the national average and played a leading role. At the same time, financial risks continued to ease in the first half of this year, local government debt risks were being orderly resolved and various constraints remained appropriately calibrated - leaving room to cope with uncertainty and improve the quality of development. 

Looking at the structure of growth, 4.7 percent is a rate of real substance. Behind the growth figures is China's shift toward new growth drivers and a better economic structure, resulting in high-quality development that is both stable and dynamic. 

The growth features higher technological content. New quality productive forces are gathering strength. Innovative chain-leading enterprises with core technologies, along with specialized and sophisticated small and medium-sized enterprises focused on niche sectors, are emerging and growing rapidly. In the first half of this year, new growth drivers contributed more than 40 percent directly to economic growth.

Artificial intelligence (AI) is empowering industries. Recently, a new generation of open-source large models has been intensively released, systematically putting forward China's proposals for building an AI ecosystem and establishing a governance framework. Innovative achievements continue to emerge, with the number of authorized AI-related patents growing 34.8 percent year-on-year. 

The growth has greater green content. The green and low-carbon transition of energy is accelerating. In the first half of this year, clean energy accounted for 36.2 percent of power generation by industrial enterprises above designated size. Green new growth drivers are expanding rapidly, with lithium battery output rising 39.3 percent and the cumulative retail penetration rate of new-energy vehicles reaching 54.1 percent. Zero-carbon industrial parks and zero-carbon transport corridors are also being developed in an orderly manner.

Benefits for people's livelihood are more tangible. Measures to stabilize and expand employment while improving its quality have been implemented, social security has been strengthened and residents' incomes have risen steadily. In the first half of this year, nationwide per capita disposable income of residents grew 5.2 percent in nominal terms year-on-year. The consumer market continued to expand, with new growth points such as service consumption and experience-based consumption being cultivated. Service retail sales rose 5.3 percent in the first half of this year, consumption in county-level and lower-tier markets led the growth, and holiday consumption and inbound tourism consumption remained robust.

Advancing under pressure, 4.7 percent is a growth rate of strong resilience. External headwinds intensified while domestic cyclical and structural pressures accumulated. China's economy braved the wind and waves to delivere a satisfactory performance, demonstrating strong shock-resistance and self-adjustment capacity. Externally, geopolitical turbulence continued, and conflict in the Middle East disrupted global energy markets, leaving many countries short of energy and facing high oil prices. 

China had earlier laid out a new energy system and petroleum reserve system, pursued a market diversification strategy, and ensured effective energy supply and price stability. 

In the past half-year, there was no shortage of refined oil products in the market, and confidence in energy security has continued to grow. At the same time, amid rising global trade protectionism and the proliferation of tariff and non-tariff barriers, Chinese products - with their strong cost-performance advantages - have won favor among consumers in an increasing number of countries. Exports have remained robust. From electric vehicles, lithium batteries and photovoltaic products to AI, robots and innovative medicine, Chinese goods are reshaping the landscape of foreign trade through frontier technologies and original capabilities. 

Domestically, the resolution of risks that had accumulated over many years in local government debt, the real estate market, and small and medium-sized financial institutions has objectively exerted a certain contractionary effect on the economy and required some short-term growth cost. Yet this short-term cost is the price of long-term economic and social stability and sustainable development. 

From the perspective of market fundamentals, the contradiction of strong supply and weak demand remains pronounced, and investment in particular faces considerable pressure in stabilizing and recovering. Investment growth is closely linked to the stage of development. The current focus of China's investment policy is not simply to maintain a certain speed, but to better align with the requirements of high-quality development and place greater emphasis on investment quality and overall returns. 

In the first half of the year, efforts focused on strengthening coordinated construction of the "six networks," namely the water network, the new-type power grid, the computing power network, the next-generation communication network, the urban underground pipeline network and the logistics network,promoting the upgrading of manufacturing, and addressing shortcomings in water network and urban underground pipeline networks, channeling more resources into the future and into people's livelihood.

Looking ahead, 4.7 percent is a growth rate with strong momentum. China's economic development enjoys broad room for maneuver, enormous market potential, and powerful resilience and vitality. There is potential for growth. With continued increases in R&D investment, China's original innovation capacity is steadily strengthening. Scientific and technological innovation is deeply integrating with industrial innovation, and innovation-driven development is becoming a powerful engine of China's economic growth. 

China's stock of talent ranks among the largest in the world; human capital is steadily shifting from a quantity dividend to a quality dividend. New factors of production such as data and computing power continue to empower traditional ones, jointly supporting high-quality economic development. 

There are dividends from the reform. We place emphasis on using reform methods to resolve developmental challenges, and the endogenous driving force of the economy is continuously strengthening. Construction of a unified national market is advancing in depth. Outstanding problems in areas such as irregular local investment attraction, market access barriers and public bidding are being addressed. This will expand the breadth and depth of China's market and further unlock the potential of its super-large market. Continued comprehensive efforts to address "involution-style" competition will foster a healthier market environment, forcing enterprises to move beyond single-dimensional price competition and accelerate the shift from scale expansion and price competition toward quality improvement and value competition.  

There is policy space. Unlike some economies that rely on high debt and large deficits to stimulate growth, China has not taken the path of over-dependence on strong policy stimulus. Macroeconomic policies have remained proactive and effective, while structural policies have been precisely targeted, avoiding the creation of a policy "dependency." 

Overall, the supporting conditions and fundamental trend for China's long-term economic improvement remain unchanged. The macroeconomic policy toolkit is well stocked, and there is still considerable room for counter-cyclical adjustments. China is in a position to roll out practical and effective incremental policies in response to changing circumstances, and is fully capable of achieving the annual economic and social development goals.