Overseas financial institutions are expressing renewed confidence in China’s economic prospects as the nation’s commitment to high-quality growth begins to yield tangible results. Recent data from the National Bureau of Statistics (NBS) reveals that China’s gross domestic product (GDP) expanded by 5 percent year-on-year in the first half of the year, with a seasonally adjusted growth of 0.7 percent in the second quarter, marking the eighth consecutive quarter of positive growth.
Wu Yibing, head of the China unit for Singapore’s state investment company Temasek, highlighted that China’s competitive edge now stems from its emphasis on research and innovation. Historically recognized for its manufacturing prowess due to an abundant labor force and high production efficiency, the shift towards high-tech industries signals a significant transformation in the economy.
The NBS data also indicated a robust increase in value-added industrial output, which rose by 6 percent year-on-year in the first half. Notably, the equipment manufacturing sector, which constitutes one-third of the overall industrial output, experienced a growth of 7.8 percent. The high-tech manufacturing sector outperformed expectations with an impressive 8.7 percent increase.
Particularly striking was the surge in production of key technological products: service robots, smartphones, and new energy vehicles saw remarkable growth rates of 22.8 percent, 11.8 percent, and 34.3 percent, respectively, in the first six months of the year. A recent report by Bloomberg emphasized that China’s long-term pursuit of high-quality growth is beginning to bear fruit, with advancements in electric vehicles, solar panels, and other high-tech industries sustaining economic expansion near the targeted pace of around 5 percent.
Investment and exports are also highlighted as critical components of China’s economic landscape. Ji Mo, chief China economist at DBS Group Research, noted the positive impact of large-scale equipment upgrades and trade-in of consumer goods, which have effectively driven investment alongside the issuance of local government special bonds and ultra-long special treasury bonds. Infrastructure construction investment rose by 5.4 percent in the first half, while manufacturing investment increased by 9.5 percent. Furthermore, net exports contributed 0.7 percentage points to GDP growth during this period.
Liu Jing, an economist at HSBC, pointed out that China has solidified its position as a major global supplier of goods, managing to expand its market share despite facing trade restrictions. Experts from various overseas financial institutions acknowledge the accelerated development of new productive forces, the continuous impact of policy measures, and the recovery of external demand as key factors supporting China’s economic resilience.
However, they also caution that further reforms and opening-up are essential to address challenges such as insufficient effective demand and a complex external environment. As China navigates these hurdles, the international community watches closely, hopeful for sustained growth and stability in the world’s second-largest economy.
