Strengthening macroeconomic adjustment to sustain steady growth: China Daily editorial

Despite the complex international climate, China's economy has remained stable in the first half of the year, with new growth drivers gaining strength and momentum for high-quality development continuing to build. This assessment, reached by experts and entrepreneurs at a symposium convened by Chinese Premier Li Qiang on Monday, sends a message of confidence and a commitment to steady progress.

The meeting took place just before the due release of the country's second-quarter GDP data on Wednesday. China's economy grew by 5 percent in the first quarter, and analysts believe China is well on track to achieve its full-year growth target of 4.5 to 5 percent.

Economic figures released so far have all pointed to a resilient economy. The total value of foreign trade surged by 16.9 percent year-on-year, reaching 25.47 trillion yuan ($3.75 trillion) in the first half of the year. This marks the first time it has surpassed 25 trillion yuan during this period, according to the General Administration of Customs.

All of these, along with other figures such as the 4.5 percent year-on-year increase in high-tech industry investment from January to May, and a purchasing managers' index of 50.3 in June, indicating expansion in the manufacturing sector, have helped lay a foundation for a good start to the 15th Five-Year Plan (2026-30) period.

This achievement has not come easily. Last week, the International Monetary Fund forecast that the global economy would expand by a sluggish 3 percent in 2026, down from 3.5 percent last year and from the 3.1 percent the organization had projected in April. The IMF cited the energy shock caused by the joint military action of the United States and Israel against Iran as a significant factor. China has effectively dealt with the energy shock by enhancing the supply of new energy and diversifying energy imports.

The consumer price index, which reflects the cost of living and purchasing power in the country, rose by only 1 percent year-on-year in the first half of the year, indicating overall stable price levels. This has provided ample room for macro-regulation in the second half of the year.

Despite so, the economy faces some challenges, particularly evident in structural divergence. Growth is largely concentrated in emerging sectors such as artificial intelligence, while traditional sectors such as real estate and manufacturing still grapple with intensified competition and shrinking profit margins. Additionally, residents' expectations for future income remain not strong enough, prompting increased savings and a reluctance to spend.

Experts suggest that the government enhance countercyclical adjustments to effectively tackle the current economic challenges. This involves providing targeted support to small and micro-sized enterprises, reducing comprehensive financing and operating costs, stabilizing employment and promoting income growth to further boost consumer confidence. The symposium on Monday reaffirmed the policy direction.

Additionally, deepening market-oriented reforms and stimulating the vitality of private investment are crucial to ensure that economic benefits are widely shared among market participants and the general public.

Maintaining the growth momentum from the first half of the year is essential for the government to achieve this year's growth targets. Implementing more proactive and effective macroeconomic policies — with a focus on expanding domestic demand and driving technological innovation — is vital.

By coordinating policy measures with reforms, the government can accelerate the development of new quality productive forces. This, alongside fostering an environment conducive to innovation and entrepreneurship, can help boost sustainable growth. These policy actions will not only support immediate economic objectives, but also lay the necessary foundation for long-term prosperity.