What does the 4.7% economic growth in the first half of the year indicate?

The wind and rain reveal the true chapter, honing one's confidence. In the first half of the year, China's economy pushed forward under pressure, continuing the overall stable and new oriented development trend, with a year-on-year growth of 4.7% in Gross Domestic Product (GDP). We have effectively responded to external environmental changes such as geopolitical conflicts and economic frictions, effectively managed complex situations such as strong domestic supply and weak demand, and the combination of new and old problems, and achieved hard won and valuable results.

Compared to the target, 4.7% is the expected economic growth rate. The annual economic growth target set by the Central Economic Work Conference and the National People's Congress and the Chinese People's Political Consultative Conference is 4.5% -5%. The 4.7% growth rate in the first half of the year is within this reasonable range, which is in line with the scientific judgment and deployment requirements of the Party Central Committee on the economic situation, and lays a solid foundation for the start of the "15th Five Year Plan". Important economic indicators are running steadily, employment and prices remain stable, and the growth rate of 4.7% is basically matched with current conditions such as factor supply, technological progress, and institutional innovation. It is a realistic and potential economic growth rate. The growth rate of major economic provinces generally exceeds the national average growth rate, playing a pivotal role. Meanwhile, in the first half of the year, China's financial risks continued to converge, local government debt risks were resolved in an orderly manner, and various constraints were moderately relaxed, leaving room for addressing uncertainty and improving development quality.

Opening up the structure, 4.7% is a valuable economic growth rate. Behind the economic growth rate is the transformation of China's economic momentum towards innovation and structural optimization, which has delivered a high-quality development report card with stable foundation and driving force. Higher technological content. The accumulation of new quality productivity is growing rapidly, with chain leading innovative enterprises possessing core technologies and specialized and innovative enterprises focusing on segmented industries accelerating their emergence and growth. In the first half of the year, the direct contribution of new driving forces to economic growth exceeded 40%. Artificial intelligence empowers thousands of industries, with the recent release of a new generation of open-source models. The system proposes a Chinese solution for building an AI ecosystem and governing order, and innovative achievements continue to emerge. The number of AI related patent authorizations has increased by 34.8% year-on-year. The green content is more abundant. The pace of green and low-carbon energy transformation has accelerated, with the proportion of clean energy generation above designated size reaching 36.2% in the first half of the year. Green new energy is accelerating its growth, with lithium battery production increasing by 39.3%, and the cumulative retail penetration rate of new energy vehicles reaching 54.1%. Zero carbon parks and zero carbon transportation corridors are being constructed in an orderly manner. The content of people's livelihood is more substantial. Implementing stable employment, expanding capacity and improving quality actions, increasing social security efforts, and steadily increasing residents' income. In the first half of the year, the per capita disposable income of residents in China increased by 5.2% in nominal terms year-on-year. The consumer market continues to expand, and new growth points such as service consumption and experience consumption are constantly cultivated. In the first half of the year, the retail sales of services increased by 5.3%, and the consumption growth rate in lower tier markets such as counties led the way. Holiday consumption and inbound consumption continue to be hot.

Moving forward under pressure, 4.7% represents a strong and resilient economic growth rate. The deepening of external adverse effects and the superposition of domestic cyclical and structural pressures have enabled China's economy to "break through the wind and waves" and deliver a qualified answer sheet, demonstrating strong resilience and self-regulation capabilities. From an external perspective, the ongoing geopolitical turmoil and the Middle East conflict have impacted the global energy market, causing energy shortages and high oil prices in many countries. China has advanced the construction of a new energy system and a petroleum reserve system, implemented a market diversification strategy, and effectively ensured energy supply and stable prices. In the past six months, there has been no shortage of oil products in the market, and the confidence in energy security has become increasingly strong. At the same time, against the backdrop of rising global trade protectionism and increasing tariffs and non-tariff barriers, China's products have high cost-effectiveness and have won the favor of more and more residents. Its foreign trade exports are strong, upgrading from electric vehicles, lithium batteries, photovoltaics to products such as artificial intelligence, robots, and innovative drugs, reshaping the foreign trade landscape with cutting-edge technology and original capabilities. Internally, resolving the risks accumulated over the years, such as local government debt, real estate market, and small and medium-sized financial institutions, objectively has a certain contraction effect on the economy, requiring some economic growth costs. However, this short-term cost comes at the cost of long-term stable and sustainable economic and social development. At the same time, from the perspective of market fundamentals, the contradiction between strong supply and weak demand is still prominent, especially in China where investment is facing significant pressure to stabilize and stop falling. The growth rate of investment is closely related to the development stage. Currently, the focus of China's investment policy is not simply to maintain a certain speed, but to better adapt to the requirements of high-quality development and pay more attention to investment quality and comprehensive benefits. In the first half of the year, China focused on strengthening the coordinated construction of the "six networks", promoting the upgrading of the manufacturing industry, filling the gaps in water conservancy and urban underground pipeline networks, and investing more resources in the future and people's livelihoods.

Looking ahead, 4.7% is a promising economic growth rate. China's economic development has broad room for maneuver, enormous market potential, and strong resilience and vitality. Growth has potential. With the continuous increase in research and development investment, China's original innovation capability is increasingly enhanced, and technological innovation and industrial innovation are deeply integrated. Innovation driven is becoming a powerful engine for China's economic growth. China's talent stock is globally leading, and human capital is steadily shifting from a quantity dividend to a quality dividend. New production factors such as data and computing power continue to empower traditional factors, jointly supporting high-quality economic development. Reform has dividends. We focus on using reform methods to solve development problems, and the endogenous driving force of the economy is constantly increasing. The construction of a unified national market is advancing in depth, and prominent problems in areas such as local illegal investment promotion, market access barriers, and bidding are being rectified. This will expand the breadth and depth of China's market and further unleash the potential of a super large scale market. Continuing to comprehensively rectify the "internal competition" will shape a more benign market environment, forcing enterprises to break away from competition based solely on price, and accelerate the shift from scale expansion and price competition to quality improvement and value competition. There is room for policy. Compared to some economies that rely on high debt and high deficits to stimulate the economy, China has not taken the path of excessive reliance on strong policy stimulus. The overall policy remains active and proactive, and the structural policy is targeted to avoid the formation of policy dependence. Overall, the supporting conditions and basic trends for the long-term improvement of China's economy have not changed. The macroeconomic policy toolbox is sufficient, and there is still a lot of room for countercyclical adjustment. We have the conditions to introduce practical and effective incremental policies according to changes in the situation, and have the ability to achieve the annual economic and social development goals and tasks.