Meeting signals stronger H2 policy push

The symposium chaired by Premier Li Qiang with experts and entrepreneurs in July came at a critical juncture in mid-year. Against the backdrop of the current economic situation and with an eye to China's long-term development, the meeting laid out systematic arrangements for economic work in the second half.

The meeting highlighted three major priorities in policy focus. Macroeconomic policy is moving from implementing existing measures to giving greater emphasis to both existing and incremental policies.

Efforts to expand domestic demand are shifting from investment primarily in physical assets to a coordinated approach that combines investment in physical assets with investment in people.

At the same time, industrial upgrading is moving beyond technological breakthroughs to focus more on the large-scale commercial application of such advances.

The meeting called for making full use of existing policies while conducting advanced studies and preparing additional policy measures.

This message carries particular significance near the midpoint of the year, signaling that macroeconomic policy is moving from a phase of implementing and consolidating existing measures, to one in which existing and incremental policies work in tandem.

At the theoretical level, this reflects the principle that macroeconomic regulation should be targeted and effective.

Marxist political economy requires a proper balance between overall economic equilibrium and structural optimization. China's economy currently faces structural challenges, including insufficient effective demand and overcapacity in some industries.

As the marginal impact of relying solely on existing policy measures diminishes, additional measures are needed to generate new growth momentum.

The call to "conduct advanced studies and prepare" incremental policies indicates that preliminary work on measures in key areas has largely been completed and that they can be introduced when conditions warrant.

This approach of preparing policy tools in advance — while acting in accordance with changing circumstances — maintains strategic resolve while leaving room for policy flexibility, providing greater space to respond to uncertainties that may emerge in the second half.

The urgency is also evident in the current economic climate. As China begins implementation of its 15th Five-Year Plan (2026-30), profound changes are taking place in both the domestic and international environment, while the economy faces prominent challenges such as relatively strong supply and weak demand. The shift in growth drivers has reached a critical stage.

Against this backdrop, preparing additional policy measures itself serves as a strong signal to the market. It shows that policymakers have reached a basic consensus on the need to strengthen policy support, with macroeconomic policies in the second half moving from providing a floor for growth toward taking more proactive action.

A clear policy signal is particularly important for stabilizing expectations among market entities and boosting confidence in investment. It provides greater certainty at a time when economic agents are seeking greater clarity about policy direction.

The meeting called for a systematic approach and for "coordinated efforts in investment in things and investment in people", while stressing the need to improve public services such as healthcare, eldercare and childcare in order to expand domestic demand through improving people's livelihoods. This signals a significant shift in the policy approach to expanding domestic demand.

The concept of "investment in people" has a strong theoretical foundation. Human capital theory, which emerged in the mid-20th century, has shown that economic growth driven mainly by the expansion of physical capital can be distorted and unsustainable. Sustainable growth requires coordinated development of human, physical and natural capital.

"Investment in people" can help expand domestic demand through both the supply and demand sides.

On the supply side, investment in people can improve the quality of the workforce and strengthen technological innovation capabilities, providing key factor support for the development of new quality productive forces.

On the demand side, greater investment in areas such as education, healthcare and eldercare can directly reduce households' need for precautionary savings, increase their propensity to consume and unlock suppressed consumption demand.

Research shows that investment in people's livelihoods can generate a stronger multiplier effect on household consumption than any indirect transmission effects from infrastructure investment.

This creates a virtuous cycle in which improvements in people's livelihoods stimulate consumption while stronger human capital supports supply-side upgrading. It represents a concrete application, particularly the principle of safeguarding and improving people's livelihoods through development.

The participation of the founder of Pang Donglai, a retail company, at the symposium offered a microlevel reflection of this policy approach.

By improving employee benefits and enhancing the consumer experience, the company has achieved growth, demonstrating that investment in people can serve not only as a government policy priority, but also as a competitive advantage for businesses.

Its approach to improving supply-side quality and stimulating domestic demand through better services provides a potentially replicable model for addressing weak consumer confidence.

The meeting placed particular emphasis on promoting the "large-scale commercial application of new technologies such as artificial intelligence".

The focus on commercialization signals a shift in industrial policy from encouraging research and innovation to facilitating the application and commercialization of technological achievements.

In terms of technological evolution, AI is moving from breakthroughs at the theoretical level toward a new stage of industrial transformation. This is not simply a matter of adding AI to existing businesses as an external tool. Rather, the development of "AI+" represents a fundamental shift in the way industries operate.

AI is evolving from an auxiliary tool into an underlying infrastructure, from optimizing individual processes to reshaping entire systems, and from isolated applications to broad-based empowerment across industries.

In August 2025, the State Council — the nation's Cabinet — issued guidelines on implementing the "AI+" initiative in depth, elevating the initiative to the national strategic level and calling for broad and deep integration of AI with different sectors and fields of the economy and society. The latest meeting's emphasis is in line with this top-level policy design and sends a further signal that implementation should be sped up.

China also has distinctive advantages in promoting the large-scale commercial application of AI.

On the technology side, several Chinese large language models have reached internationally advanced levels in overall capabilities. On the industrial side, China has a complete range of industries and abundant application scenarios, while its strong manufacturing capabilities allow AI technologies to be rapidly turned into physical products and commercial applications.

On the institutional side, China's socialist system provides strong capabilities for coordinating resources and mobilizing strengths from different sectors.

Overall, the signals from the symposium represent a practical application at a critical stage of China's economic development.

The effectiveness of policy ultimately depends on implementation.

In the second half, as existing and incremental policies work together, the concept of investment in people is being translated into concrete measures in areas such as fiscal policy, employment and social security. And as the large-scale commercial application of AI accelerates, China's economy has the conditions and capacity to consolidate its recovery and achieve its economic and social development targets for the year.

This will demonstrate China's commitment to getting off to a strong start during the 15th Five-Year Plan period, while also providing further confidence in the path toward Chinese modernization.

The writer is a research fellow at the National Academy of Development and Strategy at Renmin University of China.

The views do not necessarily reflect those of China Daily.