China's GDP grew 5.0% year-on-year in the first half of the year and 0.7% quarter-on-quarter on a seasonally adjusted basis in the second quarter, marking eight consecutive quarters of positive growth. A number of foreign financial institutions believe that driven by high-quality development goals, China's economy has continued to pick up and become a good trend, and industrial production, investment, and exports have become bright spots.

Data show that in the first half of the year, the added value of industrial enterprises above designated size in the country increased by 6.0% year-on-year, and more than 90% of industries and regions and more than 60% of products maintained growth. Among them, the added value of the planned high-tech manufacturing industry increased by 8.7% year-on-year, accounting for 15.8% of all planned industries. The output of integrated circuits, service robots, new energy vehicles, solar cells and other products has maintained double-digit growth.

The report from the HSBC China Investment Director's Office believes that the added value of China's high-tech manufacturing industry increased by 8.8% year-on-year in June, which was the main driving force for the growth of industrial production in the month.

With the accumulation of new momentum and the transformation and upgrading of industrial sectors, the more high-end, smarter and greener Chinese manufacturing industry has maintained its "gold suction" and competitiveness. In the first five months, the operating income of China's industrial enterprises increased by 2.9% year on year, and the profit increased by 3.4% year on year, of which nearly 80% of the industry profits increased. The profit of the equipment manufacturing industry increased by 11.5% year-on-year, and it is the industry sector that has contributed the most to the growth of industrial profits this year.

Wu Yibing, chairman of Temasek China, said that in the past, the outside world attributed the strength of China's manufacturing industry to its abundant labor force and high production efficiency, but now the comparative advantage of China's economy largely comes from innovation and research and development.

A Bloomberg article published on July 16 pointed out that China's pursuit of high-quality development has begun to pay off, with high-tech industries accounting for a growing share of GDP.

In terms of investment, infrastructure investment in the first half of this year increased by 5.4% year-on-year, of which, investment in railway transport industry increased by 18.5%, and investment in water management industry increased by 27.4%.

The project is inseparable from the effective guarantee of funds. In the fourth quarter of last year, China issued an additional 1 trillion yuan of government bonds to support post-disaster recovery and reconstruction and improve disaster prevention, mitigation and relief capabilities. Up to now, all the 15,000 projects that have issued additional government bonds have started construction. As one of the important power points of this year's proactive fiscal policy, the issuance of ultra-long-term special government bonds advanced in an orderly manner, bringing further support to investment.

"The special bonds and ultra-long-term special bonds issued in the early stage have gradually been transformed into physical work, which has strongly promoted effective investment and become one of the important tools for the Chinese economy to maintain its competitiveness." Ji Mo, chief economist at DBS China.

In addition, large-scale equipment renewal and consumer goods for new policy effects continue to emerge. Driven by the large-scale equipment renewal policy, the investment in the purchase of equipment and equipment in the first half of the year increased by 17.3%, driving the growth of fixed asset investment by 2.1 percentage points, and the contribution rate reached 54.8%.

"Recently, a number of banks have launched related consumer loan products for automobiles, home appliances, home improvement and other trade-in consumer areas, and the loan amount has increased significantly." At the same time, the trade-in policy has boosted car sales in May and June, the traditional off-season, and released consumer spending potential." Chow Hong Lay, senior economist at DBS Economic Research.

In terms of exports, in the first half of the year, the growth rate of China's goods trade exports rebounded to 6.9%, mechanical and electrical products with high technical content and added value accounted for nearly 60% of exports, of which automobiles, ships, integrated circuits and other products exports increased by 22.2%, 91.1% and 25.6% respectively.

Data show that in the first half of this year, China's net exports of goods and services contributed 13.9% to economic growth, driving GDP growth by 0.7 percentage points. The Bloomberg article argues that China's technological progress and the resulting export boom will help maintain economic growth at the target level of around 5%.

Jing Liu, chief economist for Greater China at HSBC Global Research, believes that despite the increase in trade restrictions around the world, China's importance as an important supplier of goods to the world is becoming increasingly prominent and its market share is expanding.

Standard Chartered China small and medium-sized enterprise confidence index shows that the new export orders index of small and medium-sized manufacturing enterprises in June rose 2.6 percentage points from the previous month, and small and medium-sized enterprises in foreign trade industry expect further growth in sales and new orders in the next three months, reflecting relatively strong external demand and optimistic business expectations.

Ubs Asia economic research director and chief China economist Wang Tao believes that the export performance in June is stronger than market expectations, especially the export growth rate of IT products remains strong, is expected to continue the export recovery cycle, the next few months China's exports will maintain rapid growth.

Optimistic about China's economic development prospects, the International Monetary Fund (IMF), the World Bank and other international institutions have raised China's economic growth forecasts. IMF chief economist Pierre-Olivier Guranza said emerging Asian economies such as China remain the main engine of the global economy.

A number of experts from foreign financial institutions said that factors such as the accelerated development of new quality productivity, the continuous release of policy effects, and the recovery of external demand have formed new support for the Chinese economy, but in the face of challenges such as insufficient effective demand, greater pressure on enterprises, and an increasingly complex external environment, it is still necessary to further comprehensively deepen reform, accelerate the implementation of policies, and promote a sustained recovery of the economy.

Source: Chinese government website