Opinion

China's shift to new growth engines: more than a "gear change"

A recent meeting of the Political Bureau of the Communist Party of China Central Committee called for accelerating the transition to new growth drivers in the second half of the year. According to preliminary estimates by the National Bureau of Statistics, new growth drivers, represented by high-end manufacturing, digital economy, and modern services, now account for more than 40 percent of economic growth. The value-added output of major high-tech manufacturers rose by 13.3 percent year-on-year, while that of major digital product manufacturers increased by 12.3 percent, both significantly outpacing overall industrial growth. The retail penetration rate of new energy vehicles has exceeded 60 percent for three consecutive months, and AI-related sectors such as integrated circuit manufacturing have seen even faster expansion.

The transition to new growth drivers requires a two‑pronged approach. It entails upgrading traditional industries to maintain stable fundamentals, while at the same time cultivating emerging industries to build new growth pillars. On the stability front, authorities are pushing digitalization, intelligent retrofitting, and green transformation to help old sectors regain vitality. On the growth front, the focus is on innovation‑driven development of new quality productive forces, backing new industries, models, and drivers with more R&D, faster tech transfer, and stronger industry‑academia linkages.

The transition also needs institutional innovation and targeted policies to clear bottlenecks. Upgrading top‑level design and fine‑tuning regulation can help remove obstacles, paving the way for industrial upgrading. One priority is deeper market-oriented reforms, aimed at creating better incentives for innovation and stronger support systems for industrial transformation, so as to fully tap into the innovative vitality of businesses and entrepreneurs. Another priority is better policy coordination. Fiscal, monetary, industrial, and employment policies should be more closely aligned, with support focused on areas such as tech upgrades, R&D, green transformation, and new industries. The aim is to direct more financial resources to the real economy while reducing transition costs and risks.

Policy

1. The State Administration for Market Regulation (the National Standardization Administration) recently approved and released 338 important national standards, including 15 mandatory standards and 323 recommended standards, covering areas such as high-tech sectors, traditional industries, work safety, and people's daily lives.

2. An ecological protection plan for the 15th Five-Year period (2026–30) was released recently, setting goals to improve the nation's ecological quality, expand forest coverage, and enhance soil and water conservation by the end of the decade. Specific targets set for 2030 include protected areas to account for no less than 18 percent of China's land area, raising the Ecological Quality Index to 86.5, increasing the soil and water conservation rate to over 74 percent, and expanding forest coverage to 25.8 percent.

Data

1. In the first half of this year, a total of 38 innovative drugs were approved for market launch in China, of which 31 were domestically produced innovative drugs, accounting for more than 80 percent.

2. According to the National Development and Reform Commission, the first domestically produced 100,000-card AI super cluster was officially put into use recently, marking that China's computing infrastructure construction has entered a new stage of 100,000-card-level deployment.

3. According to the National Energy Administration, by the end of 2025, China had built green fuel production capacity, including green methanol and green synthetic ammonia, totaling approximately 8 million tons, and the application scenarios for green fuels have been expanded to multiple fields such as shipping, aviation, land transportation, and industries.

4. Data from the Ministry of Industry and Information Technology show that in the first half of 2026, China's major internet and related service enterprises completed internet business revenue of RMB 1,067.5 billion, a year-on-year increase of 10.1 percent, and total profits increased by 16.6 percent year-on-year. In the first half of the year, R&D expenditure of major internet enterprises increased by 14.1 percent year-on-year.

5. China's homegrown C919 large passenger aircraft landed safely at the new Ulan Bator airport in Mongolia on August 12 after departing from Beijing Capital International Airport, marking the completion of the aircraft's first scheduled international commercial passenger flight. A grand water salute ceremony was held at the airport. This is the first international route opened after the C919 entered commercial operation, marking the official transition of China's domestically developed mainline passenger aircraft into a new phase of regular international operations.

6. According to customs statistics, in the first seven months of this year, the total import and export value of the nine provinces and autonomous regions in the Yellow River basin reached RMB 4.23 trillion, accounting for 14 percent of the country's total import and export value, a year-on-year increase of 15.2 percent.

7. According to Kunming Customs, in the first seven months of this year, the import and export value of cross-border freight transported via the China-Laos Railway has exceeded RMB 20 billion, a year-on-year increase of 29.9 percent.

8. According to the China Futures Association, on a single-side calculation basis, from January to July, the cumulative trading volume of the national futures market was 6.107 billion lots, and the cumulative trading value was RMB 56,898 billion, with year-on-year increases of 18.93 percent and 38.43 percent, respectively.

9. Data from the State Information Center (SIC) showed that on the industrial front, an index tracking production activity in industrial parks, rose 1.0 percent year-on-year in July, indicating broadly stable operations. Activity indexes for the semiconductor, new materials, and digital intelligence sectors rose 11.6 percent, 8.9 percent, and 4.8 percent, respectively.

10. The latest data from the China Association of Automobile Manufacturers show that in July, China's automobile exports reached 1.043 million units, a year-on-year increase of 81.3 percent. Among them, new energy vehicle exports reached 553,000 units, a year-on-year increase of 145.5 percent.

(Source: Economic Daily)