Innovation-driven growth, regional integration underpin momentum

China's economy demonstrated resilient and innovation-led growth in the first three quarters of the year, bolstered by surging investments in high-tech sectors and a more integrated domestic market.

Concurrently, regional development initiatives are bearing fruit, highlighted by the robust five-year expansion of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin, Guangdong province, according to the latest official tax data.

Value-added tax invoice data released by the State Taxation Administration indicate a steady upward trajectory driven by emerging sectors. National industrial sales revenue grew by 7.4 percent year-on-year in the first three quarters, with the third quarter seeing a slight acceleration to 7.8 percent. Advanced manufacturing, particularly high-tech and equipment manufacturing, served as a primary engine for this expansion, jumping 12.3 percent in the third quarter alone — an acceleration of 3.4 percentage points from the previous quarter.

The transition toward a more knowledge-based economy is accelerating rapidly. Sales revenue in core digital economy sectors and intellectual property-intensive industries rose by 9.1 percent and 13.1 percent, respectively. Artificial intelligence-related manufacturing recorded explosive gains in the third quarter, with integrated circuits surging 77.9 percent and semiconductor device manufacturing climbing 35.9 percent.

This technological pivot is heavily supported by robust corporate capital expenditure and equipment upgrades. Nationwide enterprise purchases of machinery and equipment increased by 12.6 percent year-on-year, peaking at a 15.9 percent growth rate in the third quarter. Driven by the rapid rollout of computing and data centers, the information technology and scientific research sectors saw their equipment procurement skyrocket by 30.4 percent and 24.9 percent in the third quarter, respectively.

Furthermore, supply chain connectivity improved, reflecting a more unified domestic market. Inter-provincial trade accounted for 41.4 percent of total national sales, while the transportation and logistics sector posted a 7.3 percent revenue increase, accelerating to 9.9 percent in the third quarter.

Fu Linghui, a spokesperson for the National Bureau of Statistics, emphasized that the deep integration of technological and industrial innovation will increasingly drive the country's industrial upgrades, green transition, and broader economic development.

This national push for high-quality, integrated growth is mirrored at the regional level, most notably in Hengqin. Since its establishment in September 2021, the cooperation zone has rapidly evolved into a vital hub for the economic diversification of the Macao Special Administrative Region.

Over the past five years, the zone's business ecosystem has expanded significantly. The number of registered enterprises grew at an average annual rate of 3.6 percent, rising from 37,200 in 2021 to 42,800 by 2025. During this period, total declared operating revenue climbed from 419.63 billion yuan ($62.98 billion) to 513.34 billion yuan, reflecting a 5.2 percent annual growth rate, while total profits increased to 72.7 billion yuan. Employment also saw steady gains, with the local workforce expanding by 3 percent annually to reach 207,000.

Cross-border integration has accelerated notably. The number of Macao-funded enterprises operating in Hengqin surged by an average of 13.5 percent annually, reaching 6,194 by August of this year. These businesses saw their tax contributions jump 28.9 percent year-on-year in the first eight months.

The zone's economic structure is heavily supported by four key sectors: technological research and high-end manufacturing, Macao-branded industries including traditional Chinese medicine, culture and tourism, and modern finance. By 2025, these industries comprised nearly 24,000 enterprises. Together, they contributed 60.2 percent of the zone's total tax revenue in 2025, a figure that further increased to 63 percent in the first eight months of this year.

The zone has also become an increasingly attractive destination for professionals. In 2025, nearly 6,000 Macao residents declared personal income tax in Hengqin, representing a 12.2 percent average annual increase since 2021, while their per capita declared income nearly doubled. Over the past five years, preferential tax policies have saved more than 2,200 Macao residents a combined 130 million yuan, with per capita tax benefits rising by 33.1 percent.

A spokesperson for the Guangdong Provincial Tax Service noted that these figures illustrate the deepening integration between Hengqin and Macao, adding that continued tax incentives and streamlined services will further cement the zone's role as a catalyst for the broader Guangdong-Hong Kong-Macao Greater Bay Area.

renqi@chinadaily.com.cn