Data released by the National Bureau of Statistics (NBS) on July 15 showed that China’s gross domestic product (GDP) reached 69.5704 trillion yuan in the first half of the year, expanding 4.7% year-on-year at constant prices. GDP grew 5.0% year-on-year in the first quarter and 4.3% in the second quarter.
Against a backdrop of multiple unstable and uncertain external factors and prominent domestic imbalance between ample supply and weak demand, what signals does this half-year economic report send? How should we interpret the 4.7% GDP growth rate in the first six months?
Stable Production: High-End Manufacturing Acts as Key Growth Driver
With GDP up 4.7% year-on-year in H1, the overall economic trend remained steady and controllable.
Su Jian, Professor at the School of Economics and Director of the National Economic Research Center of Peking University, told reporters that under the general work tone of pursuing progress while maintaining stability this year, the 4.7% GDP growth basically matched market expectations. Relatively insufficient domestic demand, especially continuous declines in investment growth, constituted the major drag on GDP expansion.
In Su’s view, the economy presented a divergent pattern of stable production, strong exports, weak consumption and sluggish investment in the first half of the year, a phased outcome amid structural adjustment and capacity reduction.
“Despite lingering major external uncertainties, we must recognize that the core driver of robust foreign trade growth in H1 lies in shifts in China’s industrial structure. High-tech products have replaced traditional goods as new engines propelling export expansion, which aligns with domestic economic and industrial restructuring,” Su noted.
Industrial value-added of industrial enterprises above designated size rose 5.4% year-on-year nationwide in H1. By major industrial sectors, mining value-added increased 3.6%, manufacturing 5.6%, and production and supply of electric power, heat power, gas and water 5.5%. Value-added of equipment manufacturing jumped 9.3%, while that of high-tech manufacturing surged 13.3%.
“From the production side, industrial output posted solid growth, with sound momentum in equipment and high-tech manufacturing. The year-on-year growth of industrial value-added above designated size picked up in June. Taking the higher base into account, this points to robust production, and month-on-month growth further signals accelerating output. Year-on-year growth of export delivery values also improved, with real physical trade volumes continuing to expand after stripping out price factors,” said Yang Chang, Chief Analyst of the Policy Research Group at Zhongtai Securities Institute.
Yang also commented that the 4.7% growth fell within the full-year target range of 4.5% to 5% set at the start of the year. It is worth noting that quarterly performance diverged noticeably: GDP expanded 5.0% in Q1 versus 4.3% in Q2, with a marked slowdown in fixed-asset investment growth. The pace of policy rollouts requires close monitoring going forward.
Strong Exports: Foreign Trade Maintains Robust Momentum
China’s total import and export volume for the first half of the year topped 25 trillion yuan for the first time in the same period of history, sustaining solid scale while delivering numerous bright spots.
“Since the start of this year, the national economy has forged ahead with resilience and vitality, with foreign trade registering strong and steady growth,” Wang Jun, Vice Administrator of the General Administration of Customs, stated at a State Council Information Office press briefing.
Official data showed China’s total goods trade volume hit 25.47 trillion yuan in H1, a year-on-year increase of 16.9%. Exports stood at 14.73 trillion yuan, up 13.4%, and imports reached 10.74 trillion yuan, rising 22.1%. Overall, foreign trade maintained a sound performance, and China retained its position as the world’s largest goods trading nation.
Notably, import and export growth accelerated markedly in the first six months. Q2 trade volume reached 13.61 trillion yuan, climbing 18.4% year-on-year, marking the fastest quarterly growth since Q3 2021.
Wang Jun attributed export growth fundamentally to the precise matching between “Made in China” products and diversified global market demand.
On one hand, global demand for computing power, data centers and terminal equipment kept expanding, boosting exports of related goods. Exports of electronic components and computer parts posted double-digit growth in H1, while shipments of intelligent bionic robots deeply integrated with AI technology exceeded 10,000 units to more than 90 countries and regions worldwide.
On the other hand, deepening global green and low-carbon transformation lifted demand for new energy infrastructure and consumer goods. H1 exports of lithium batteries and wind turbine units, two core green energy products, rose 37.6% and 35.6% respectively. Green mobility goods also saw vigorous growth: new energy vehicles, electric railway locomotives, electric motorcycles and bicycles registered year-on-year rises of 68.7%, 45.1% and 31.5%.
Behind the high foreign trade growth lies rising innovation content in exported goods. Driven by rapid AI development, imports and exports of relevant products gained strong traction. Trade volume of computing hardware including electronic components and computer parts hit 5.13 trillion yuan in H1, surging 56.6%. Smart products such as AI glasses, AI translators and mechanical exoskeletons underwent rapid iteration, with a constant stream of innovative products emerging.
Against projections of slowing global trade growth, why has China’s foreign trade bucked the trend with sharp expansion?
Su Jian explained that profound shifts have taken shape in China’s foreign trade landscape, covering trade partners and industrial mix alike. Since last year, China has advanced multilateral trade cooperation and expanded exchanges with ASEAN, the EU and other economies, partially offsetting downward risks in China-U.S. trade. On the product side, high-tech goods have replaced traditional commodities as the backbone of trade expansion.
Even as some countries resort to tariff pressures, Chinese foreign trade enterprises have taken proactive steps to expand global cooperation and seek new partners. Compared with the same period last year, 267,000 foreign trade enterprises expanded their business to new countries and regions in H1, with their combined import and export value jumping 22.6% and accounting for nearly 70% of China’s total trade volume.
“The core reason for China’s outperforming foreign trade growth amid global headwinds lies in domestic industrial restructuring and rapid expansion of high-tech industries. Booming high-tech sectors and new quality productive forces have replaced cheap labor as China’s comparative advantage, driving resilient export expansion,” Su said.
Expanding Consumption: Full Recovery Remains an Uphill Battle
The consumer market, closely linked to residents’ daily lives, saw moderate expansion in H1, with service retail posting the fastest growth.
Total retail sales of consumer goods reached 24.8722 trillion yuan in H1, up 1.3% year-on-year, 0.1 percentage points lower than the growth in the first five months. Total retail sales of consumer goods and services rose 2.7% year-on-year, including a 5.3% increase in service retail sales and a 1.1% rise in goods retail sales.
In June alone, total retail sales of consumer goods edged up 1.0% year-on-year, compared with a 0.6% decline in May.
By consumption category, goods retail sales hit 22.0467 trillion yuan in H1, growing 1.1% year-on-year, while catering revenue stood at 2.8255 trillion yuan, a rise of 2.8%.
Among retail goods above designated size, communications equipment and tobacco & alcohol delivered standout performances in H1, with year-on-year growth of 14.4% and 13.2% respectively. By contrast, automobile products and construction & decoration materials lagged, falling 12.6% and 8.8% year-on-year.
“Signs of consumption recovery are visible: June year-on-year growth rebounded, catering sales picked up, and goods retail growth improved. Summer consumption boom strongly boosted the overall consumer market,” Yang Chang observed.
Meanwhile, the Consumer Price Index (CPI) recorded mild inflation. The national CPI rose 1.0% year-on-year in H1. In June, CPI increased 1.0% year-on-year while slipping 0.3% month-on-month. Core CPI, excluding food and energy prices, went up 1.2% year-on-year in H1 and 1.0% in June.
With total retail sales of consumer goods only rising 1.3% in H1, can consumption stage a solid recovery in the second half? What policy support is needed?
According to Su Jian, consumption recovery fell short of expectations for two major reasons. First, residents’ income growth remained relatively slow, with little improvement in income and employment expectations — the fundamental drag on consumption expansion. Second, large-scale state subsidies to boost consumption in 2025 partially crowded out 2026 consumption and created a high comparison base.
“Major adjustments to state consumption stimulus policies in late 2025 will ease restraining effects on H2 2026. Coupled with further economic recovery in the second half, consumption is projected to keep rebounding,” Su forecasted. On policy front, stabilizing residents’ income and employment expectations is a top priority. In addition, improved regulatory oversight and optimized market environments are required to support service consumption.（Outlook New Era）
Edit：Liu Zhiyu Responsible editor：Li Yulu
Source：https://mqjwb.tidenews.com.cn/epaper/article/2026-07-16/4502501
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