Economy resilient, stronger momentum ahead

Looking ahead to the second half, although the external environment still faces considerable uncertainties, China's economy is expected to stabilize and continue improving as the combined effects of existing and incremental policy measures become more fully evident and the transition from traditional to new growth drivers accelerates. The economy has maintained solid momentum in the first half, stabilized in the middle of the year and gained further strength toward year-end. Taking all factors into account, we believe China has the capability to successfully accomplish this year's major economic and social development goals.

First, foreign trade is expected to maintain relatively strong growth and continue providing solid support for economic expansion.

China's comprehensive industrial system, well-coordinated supply chains and highly efficient manufacturing ecosystem — together with the continued upgrading of intelligent and green manufacturing — are steadily strengthening the country's new competitive advantages in international trade. Over the coming period, capital expenditure across global AI-related industrial chains is expected to continue expanding rapidly, supporting faster growth in exports of semiconductors, electronic components and other products. Meanwhile, China's improving industrial competitiveness will further promote exports of high-value-added products. As an important hub of global industrial and supply chains, China's high-tech manufacturing sector has demonstrated strong resilience. It not only provides reliable support for global technological upgrading and product supply, but also creates broader opportunities for trade, investment and technological innovation by expanding domestic demand, deepening industrial upgrading, and fostering the development of the green and digital economies.

Second, new growth drivers are expected to gather stronger momentum and effectively offset adjustment pressure from traditional growth drivers.

New quality productive forces — represented by AI, advanced manufacturing and green energy — are moving from isolated breakthroughs to integrated industrial expansion. The explosive growth in demand for AI computing power is expected to drive further growth in chip sales, while tech companies are accelerating both research and development investment and capacity expansion.

Meanwhile, the deep integration of the digital economy with the real economy is expected to sustain rapid growth in emerging sectors such as industrial robotics, cloud computing and the internet of things, thus reshaping the foundation of China's industrial system. As the transition from traditional to new growth drivers accelerates, the contribution of the new economy to overall growth is expected to increase further in the second half, effectively offsetting the adjustment pressure from traditional growth drivers.

Third, the combined effects of existing and incremental policy measures will become more evident, providing strong support for faster growth in domestic demand.

The second half will be a critical period for ensuring policy implementation and accelerating project progress. The entire 800 billion yuan ($118 billion) allocated for major national strategies and security capacity-building projects, together with the 200 billion yuan earmarked for large-scale equipment upgrades and consumer goods trade-in programs, has already been distributed and is expected to generate more tangible investment and economic activity.

Investment related to the above-mentioned six networks will continue to expand. Closely linked to improving people's well-being and strengthening long-term development capacity, investment in these six networks is expected to exceed 7 trillion yuan this year, making them a key pillar for stabilizing economic growth.

On the consumption side, measures such as raising the minimum wage, increasing pension payments and expanding medical insurance subsidies are expected to boost consumer confidence at the source. As existing policy funds are put into use more quickly and incremental policy measures are implemented with greater precision, domestic demand is expected to make a steadily larger contribution to economic growth, providing strong support for accomplishing this year's development goals.

The writer is director of the Department of Economic System Reform at the Institute of Economics, Chinese Academy of Social Sciences.

The views do not necessarily reflect those of China Daily.