Economy keeps on stable growth path

China's economy has remained on a stable trajectory despite short-term fluctuations, as robust expansion in new growth drivers and resilient foreign trade continued to underpin overall momentum, the country's top economic regulator said on Friday.

Experts said such resilience has helped cushion near-term pressures, and the economy remains well placed to operate within a reasonable range in the next stage, while stronger domestic demand will be key to reinforcing its internal drivers.

Stronger and more targeted countercyclical measures are needed, they added, as higher energy costs stemming from geopolitical tensions and still-weak domestic demand continue to weigh on growth momentum.

Li Chao, a spokeswoman for the National Development and Reform Commission, said softness in some April indicators should be viewed in the context of the broader economy, whose stable operations and structural upgrading remained intact.

Notably, emerging growth drivers have continued to gather steam, with value-added output, investment, exports and profits in high-tech manufacturing all maintaining rapid growth, Li said at a news conference in Beijing.

In the first four months, the industrial output of high-tech manufacturing rose 12.6 percent year-on-year, while investment in high-tech industries increased 6.1 percent year-on-year, according to the National Bureau of Statistics.

Such momentum is increasingly being reinforced by the rapid development of artificial intelligence, which has become an important variable shaping China's economic performance, said Luo Zhiheng, chief economist and head of the research institute at Yuekai Securities.

"AI is generating fresh demand across the computing power, software and information services chains, providing an incremental boost to production, investment and exports," he said.

Policy support is also being stepped up. Li said the NDRC is working on follow-up supporting policies to advance the rollout of the "AI Plus" initiative and provide stronger support in key areas.

China is not only competitive in AI hardware, but also well positioned in the energy and power infrastructure, said Robin Xing, chief China economist at Morgan Stanley.

He added that the world's second-largest economy is relatively insulated from the global oil shock, thanks to a more balanced energy mix and strategic reserves.

As part of efforts to strengthen energy and power infrastructure, China is expected to invest more than 5 trillion yuan ($736 billion) during the 15th Five-Year Plan period (2026-30) to build a safer, more reliable, green, low-carbon and intelligent new-type power grid, the country's top economic regulator said.

Foreign trade has also shown strong resilience, Li added. In the first four months, China's total imports and exports rose 14.9 percent year-on-year, with the trade structure continuing to improve as market cooperation became more diversified and the product mix further upgraded.

On the back of robust exports as well as strong AI — and green-related capital expenditure, Morgan Stanley recently lifted its full-year growth forecast for China to 4.8 percent, putting it toward the upper end of the country's annual growth target range.

Still, experts said that while China's economy is on a recovery path, the rebound has yet to become fully self-sustaining, underscoring the need for more targeted policy support.

Zhang Bin, deputy director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said stronger countercyclical policy support is needed to drive a more robust recovery in demand.

The NDRC said earlier that it will work to ensure that this year's 755 billion yuan in central budgetary investment and 1 trillion yuan in ultra-long-term special treasury bonds are largely allocated by the end of June, while steadily rolling out 800 billion yuan in new policy-based financial instruments.