China's H1 2026 GDP Grows 4.7% as Macro Policies Boost Domestic Demand and Foster New Growth Drivers
China's economy grew 4.7% year on year in the first half of 2026, adding 3.6 trillion yuan, with new growth drivers contributing over 40% of expansion. High-tech industries investment rose 4.6%, while retail sales of smart wearable devices more than doubled. The government is drafting a strategy to expand domestic demand through 2030, stepping up water and computing infrastructure construction that attracted more than 10.8 billion yuan in private capital. Macro policies will increase counter-cyclical support, accelerate disbursement of 800 billion yuan in new policy financial instruments, and advance AI legislation.
In the first half of 2026, China's economy demonstrated a shift toward new drivers and structural improvement. GDP grew 4.7% year on year, keeping the country among the leading major economies, with an increment of 3.6 trillion yuan. Key indicators in May and June rebounded on both the supply and demand sides. Innovation-driven development yielded further results, and new growth drivers such as high-end manufacturing, the intelligent economy, and modern services contributed more than 40% to economic growth.
On the domestic demand side, investment structure continued to optimize. Investment in high-tech industries rose 4.6% year on year, with information services investment up 15.5%. National investment in intellectual property products grew 9.4%, raising its share of total investment to 13.8%. In consumption, retail sales of smart glasses and other wearable smart devices more than doubled, while retail sales of high-efficiency home appliances increased more than 30%. The National Development and Reform Commission is working with relevant departments to formulate an implementation plan for the strategy of expanding domestic demand (2026–2030), which will closely combine improving people's livelihoods with promoting consumption to vigorously boost spending, and combine investment in physical capital with investment in human capital to stimulate endogenous investment momentum.
The planning and construction of "six networks" serve as a powerful lever to stabilize investment, expand domestic demand, and strengthen growth drivers. Most major single projects scheduled to start this year have already commenced, a large number of projects are under accelerated construction, and another batch have been completed and put into operation. In the first half, water network construction attracted more than 10.8 billion yuan in private capital, an 85.8% year-on-year increase. Relevant institutions estimate that computing power network construction during the 15th Five-Year Plan period will add 4 trillion yuan in direct investment, and given that computing infrastructure investment is mainly led by enterprises, this will create enormous space for private investment. The NDRC will focus on integrated planning and multi-network coordination, achieving efficient use and solving practical problems, and unblocking bottlenecks while improving governance, to swiftly refine and implement specific plans and strengthen funding and factor support.
The construction of a unified national market has entered a critical stage of in-depth advancement. The next steps will accelerate institution-building by rolling out a combination of "one regulation, three lists, and three systems"; optimize infrastructure connectivity to break through bottlenecks in the flow of goods and services, improve factor circulation efficiency, and reduce circulation costs; achieve breakthroughs in key areas that affect millions of households and the development of numerous business entities; and closely monitor problem rectification to concentrate efforts on clearing a batch of persistent obstacles.
Regarding artificial intelligence development, the approach will balance development with security and focus on innovation, application, and ecosystem. On one hand, independent innovation will be accelerated, with a focus on frontier areas such as large model basic theory, training and inference efficiency, multimodal intelligence, and intelligent agents, strengthening basic research and technological innovation, and speeding up data openness and sharing as well as AI corpus development. On the other hand, application-driven efforts will be highlighted, accelerating the layout and construction of national AI application pilot bases and promoting collaborative innovation and efficient adaptation across the entire "model-chip-cloud-application" chain. At the same time, the legislative process for the AI law will be accelerated, risk monitoring and prevention will be strengthened, and the impact of AI on economic operations, employment, and income distribution will be actively addressed.
On prices, the overall price level in China showed a sustained upward trend in the first half of 2026, positively contributing to corporate profits, fiscal revenue growth, and employment and income gains. Looking ahead to the second half, the accelerated development of emerging industries such as AI, further strengthened capacity and output regulation, gradually optimized market competition order, and continued release of service consumption demand will provide sound support for the price recovery.
The Political Bureau meeting held on July 30 made comprehensive arrangements for economic work in the second half of the year, making clear that macro policies should be more effective and efficient, fully leveraging the effectiveness of existing policies, promptly designing and introducing pragmatic and effective incremental policies, and strengthening counter-cyclical adjustments. The NDRC will promote policy effectiveness and strengthen the consistency of macro policy orientation; expand domestic demand while improving people's livelihoods to bolster the large domestic market; accelerate the cultivation of new growth drivers to continuously enhance development momentum and vitality; and strengthen security capacity building to further improve economic resilience. In expanding effective investment, efforts will be coordinated to advance "dual priorities" construction, seize the third-quarter construction peak season, speed up the disbursement and use of 800 billion yuan in new policy-based financial instruments, accelerate the issuance and utilization of special bonds, and promote the implementation of the 109 major projects outlined in the outline of the 15th Five-Year Plan.