On July 15th, China's economic report for the first half of 2026 was released, showing a gross domestic product (GDP) of 69.6 trillion yuan, representing a year-on-year growth of 4.7%.

What signals does this mid-year economic report convey? How is the transformation between old and new growth drivers progressing? Where will the focus for national economic momentum lie in the second half of the year?

Stable Growth Rate Bolsters Confidence for the Second Half

The initial annual growth target was set between 4.5% and 5%, with the 4.7% figure falling precisely within this range.

In an interview, Jie Hu, a practice professor at the Shanghai Advanced Institute of Finance, Shanghai Jiao Tong University, noted that despite complex and volatile external conditions and rising geopolitical risks, the Chinese economy has withstood pressure and operated within a reasonable range during the first half of the year.

Although the GDP growth rate in the second quarter moderated compared to the first quarter, the fundamental trend of stable economic operation and a shift towards new, high-quality development remains unchanged.

Min Deng, Senior Global Partner and Chairman of Greater China Consumer Products and Retail at Bain & Company, observed that the second quarter was a period of significant pressure for the global consumer sector, but domestic data for June already showed sequential improvement.

This provides greater confidence for the outlook in the second half of the year.

Simultaneous Upgrades in Industry and Foreign Trade

Changes in the industrial structure represent one of the highlights.

In the first half of the year, the value-added of industrial enterprises above the designated size increased by 5.4% year-on-year.

Within this, the value-added of equipment manufacturing grew by 9.3%, and that of high-tech manufacturing surged by 13.3%, outpacing the overall industrial growth by 3.9 and 7.9 percentage points, respectively.

A similar trend is evident in foreign trade.

Total goods imports and exports in the first half grew by 16.9% year-on-year, with exports of mechanical and electrical products rising 20.1%, accounting for 63.5% of total exports.

Professor Jie Hu believes that beyond the impressive overall trade volume and growth rate, the continuous optimization of the import-export structure is even more noteworthy, particularly as China's artificial intelligence and robotics products are gaining prominence on the international stage.

He analyzed the growth drivers in foreign trade across three layers: strong demand driven by the "AI revolution," the effectiveness of expanding into "Belt and Road" markets, and the flexible adaptability of private enterprises.

The convergence of these three forces has not only stabilized the total volume but also propelled continuous structural upgrading.

This transformation is also reflected on the investment side.

Sectors representing the direction of industrial upgrading are accelerating their accumulation of strength, becoming a significant force in the optimization of the investment structure.

The Transformation of Consumption: Services Accelerate, Structure Upgrades Rather Than Demand Recedes

People are increasingly willing to spend money on experiences and on things that satisfy emotional and psychological value.

Min Deng observed that Chinese consumers are exhibiting new consumption characteristics.

This is not a decline in willingness or ability to consume, but rather an active upgrade in consumption structure—consumption is shifting from a passive, "feeding-based" growth engine to an active, structured growth engine.

Experts point out that service consumption demand in segmented sectors such as cultural tourism, health and elderly care, education and training, and sports and leisure is accelerating.

The integration of diverse business models and innovation in consumption scenarios continue to generate new growth points.

The path of consumption upgrade is transitioning from the expansion of quantity to the enhancement of quality, moving from goods to services and from "whether there is" to "how good it is."

Outlook for the Second Half of the Year

Looking ahead to the second half of the year, experts believe that the support and leading role of new growth drivers for the economy remain very strong, providing solid support for achieving the annual economic growth target.

Simultaneously, regarding stabilizing growth, promoting transformation, and benefiting people's livelihoods, there is anticipation that various regions and departments will introduce more targeted and precise policies to promote stable economic operation and development towards new, high-quality growth.