Equilibrium between traditional and new drivers key for growth

China's transition from old to new growth drivers is gathering pace. A key task in the next stage is to strike a balance between fostering new growth drivers and upgrading old ones, using artificial intelligence, digitization and green technologies to transform traditional industries.

The July 30 meeting of the Political Bureau of the Communist Party of China Central Committee highlighted the growing momentum from new sources of growth while acknowledging the structural challenges facing China's pursuit of high-quality development.

The meeting called for faster progress in shifting from old to new growth drivers in the second half of the year. It also urged policymakers to maximize the effect of existing measures while rolling out targeted new policies in a timely manner.

In the first half of the year, new growth drivers, represented by high-end manufacturing, the digital economy and modern services, contributed more than 40 percent to China's economic growth. Emerging industries such as artificial intelligence, integrated circuits and new energy vehicles performed strongly in production, investment and exports, accelerating the shift from old to new growth drivers.

Specifically, value-added industrial output in equipment manufacturing for enterprises above designated size grew 9.3 percent year-on-year in the first half, while high-tech manufacturing expanded 13.3 percent — 3.9 and 7.9 percentage points faster, respectively, than the 5.4 percent growth recorded by industrial enterprises above designated size. In contrast, real estate development investment fell 18 percent over the same period.

This divergence highlights the profound structural transformation underway as China moves away from a growth model driven by high investment and high consumption of resources toward one powered by digitization, intelligent technologies and green development. While the transition may bring short-term challenges, it is creating new opportunities.

Importantly, new growth drivers are not limited to emerging and future industries; traditional sectors can also generate fresh momentum through technological upgrading and transformation. Achieving this balance will require coordinated efforts to cultivate emerging industries while revitalizing traditional sectors.

The new drivers — although they have emerged as the primary engines of growth in industrial value-added output and some modern service sectors — have yet to become a dominant force across the economy.

The traditional industrial drivers must be upgraded along with the accelerated development of a modern industrial system. For example, on the application side, expanding affordable access to computing power and AI technologies would enable more companies to accelerate their digital and intelligent transformation. This would strengthen the foundations of the real economy while creating new sources of industrial competitiveness.

High-tech and traditional industries are mutually reinforcing forces. High-tech industries provide the technologies needed to upgrade traditional sectors, while traditional industries offer diverse application scenarios for emerging technologies.

China should seize the opportunities created by the rapid growth of high-tech industries and encourage local governments to integrate technological and industrial innovation based on local strengths and conditions. By pursuing differentiated development, regions can build industrial ecosystems in which complementary strengths and synergies generate new growth opportunities.

Strengthening long-term, stable support for basic research will help continuously enhance China's innovation capabilities and lay a solid technological foundation for accelerating the development of a modern industrial system. The country should focus on cutting-edge fields, continue to optimize the structure of investment in basic research, further streamline the chain for transforming innovation outcomes into practical applications and deepen the integration of innovation and industry chains.