Politburo Deploys H2 Work: H1 GDP 4.7%, ‘Six Networks’ Over RMB7 Trillion, AI as Pillar

The Political Bureau of the CPC Central Committee convened a meeting on July 30 to analyze the current economic situation and plan work for the second half of the year. The meeting noted that since 2026, China’s economy has shown a trend of new growth drivers and improving structure, but it must effectively respond to various external shocks and internal difficulties. In the first half, gross domestic product reached RMB69.6 trillion, up 4.7% year-on-year, with the incremental amount hitting a five-year high for the same period. First-quarter growth was 5.0%, slowing to 4.3% in the second quarter, while the second-quarter GDP deflator rose about 1.5% year-on-year, turning positive for the first time in nearly three years. Total exports in June surged 27% year-on-year, generating a trade surplus of US$125.62 billion, but retail sales of consumer goods in May fell 0.6% year-on-year, the first monthly decline since December 2022.

The meeting explicitly called for more proactive fiscal policy and moderately loose monetary policy, and for strengthening counter-cyclical adjustments. On the fiscal side, it urged faster fiscal spending and use of bond proceeds, and advancing the ‘two priorities’ and ‘two new’ initiatives. On the monetary side, it called for comprehensive use and timely adjustment of monetary policy tools. Policies will focus on effectively expanding domestic demand, tapping the potential of service consumption, and expanding high-quality supply to meet the consumption needs of different groups. In the first half of 2026, retail sales of goods grew 1.1%, while service retail sales rose 5.3%, with the share of service consumption trending upward.

In the investment domain, the meeting pushed forward the planning and construction of the ‘six networks’, covering the water network, new-type power grid, computing power network, next-generation communications network, urban underground pipeline network, and logistics network. According to estimates by the National Development and Reform Commission, investment in the ‘six networks’ and related key areas will exceed RMB7 trillion in 2026. Over the 15th Five-Year Plan period, combined investment in the national water network, new-type power grid, and urban underground pipeline network will surpass RMB16 trillion, with planned investment of over RMB5 trillion for the new-type power grid, about RMB5 trillion for underground pipelines, and RMB4 trillion in new direct investment for the computing power network.

On the industrial front, the meeting actively promoted breakthroughs in frontier technologies and the development of future industries, focusing on building artificial intelligence, robotics, and innovative drugs as the ‘new new three’ emerging pillar industries. In the first half, the value-added of high-tech manufacturing above designated size rose 13.3% year-on-year, with aerospace vehicle and equipment manufacturing up 16.3% and electronic and communication equipment manufacturing up 17%. Integrated circuit output grew 23.1%, with average daily production exceeding 1.5 billion units. Intelligent bionic robots and cleaning robots, newly added as separate customs codes in 2026, recorded combined exports of RMB18.09 billion. Out-licensing deals for innovative drugs in the first half amounted to about US$110 billion. In addition, industrial robot exports in 2025 grew 18.6% year-on-year, with exports surpassing imports.