This stitched drone photo taken on June 20, 2024 shows robots working at an intelligent workshop of Jiangsu Sanxiao Group Co., Ltd in Hangji Township of Yangzhou City, east China's Jiangsu Province. (Xinhua/Li Bo)

China's economy maintained stable expansion in the first half of 2024 despite rising challenges from home and abroad, official data showed Monday.

The country's gross domestic product (GDP) grew 5 percent year on year in the period to 61.68 trillion yuan (about 8.65 trillion U.S. dollars), according to the National Bureau of Statistics (NBS). In the second quarter, China's GDP expanded 4.7 percent year on year.

"Overall, the national economy has continued to improve in the first half in a stable manner," the NBS said in an online comment, citing support from policy incentives, a rebound in external demand and the development of new quality productive forces.

The country's retail sales of consumer goods went up 3.7 percent year on year in the first half, while fixed-asset investment rose 3.9 percent and value-added industrial output expanded 6 percent.

The bureau said the growth was "hard-won" as the world's second-largest economy had faced a more uncertain, complex and severe external environment, as well as new challenges from deepening structural adjustment domestically.

An aerial drone photo taken on April 1, 2024 shows commodity vehicles to be loaded for export at Zhifu Bay Area of Yantai Port in east China's Shangdong Province. (Xinhua/Li Ziheng)

RESILIENCE AMID CHALLENGES

The NBS noted solid performance in several key indicators. The country's surveyed urban unemployment rate stood at 5.1 percent in the first half, down 0.2 percentage points from the same period last year.

Its per capita disposable income went up 5.4 percent year on year in nominal terms in the period, outpacing economic growth.

Industrial production has turned smarter and greener, according to the NBS. The high-tech manufacturing sector saw output up 8.7 percent year on year in the first half, while the production of service robots and new energy vehicles surged 22.8 percent and 34.3 percent, respectively.

The bureau attributed the milder second-quarter GDP growth compared with the first quarter to short-term factors such as extreme weather and floods, as well as rising difficulties and challenges, especially from insufficient effective demand and unsmooth economic flow at home.

The NBS remarks echoed Premier Li Qiang, who said at a symposium on China's economic situation last week that factors affecting growth have become more complex than before, and therefore addressing these difficult problems in economic operation requires greater efforts.

The premier said China should further ensure solid macroeconomic policy delivery, work to leverage policy synergies, enhance the effectiveness of policy implementation and facilitate the sustained and healthy development of the economy.

To support growth, China has initiated a slew of measures, including a new round of consumer goods trade-ins and the issuance of ultra-long special treasury bonds, to boost investment and consumption.  

Driven by the policy incentives, consumption continued to play a major role in promoting growth in the first half, with final consumption contributing to 60.5 percent of the economic expansion, or 3 percentage points to the GDP growth.

A customer shops at a supermarket in Nanjing, east China's Jiangsu Province, March 9, 2024.
(Photo by Liu Jianhua/Xinhua)

SOUND FUNDAMENTALS

The NBS expects external uncertainties and instabilities to continue increasing while domestic challenges remain in the second half of the year, but it said they are "growing pains" and the cure lies in further development.

"From a comprehensive perspective, the favorable conditions facing China's development are stronger than the unfavorable ones," the bureau said.

"The economic fundamentals that will sustain long-term growth remain unchanged, and the trend toward high-quality development has not changed," the NBS said, noting that the Chinese economy is still a key engine for global growth.

"We have the confidence and capability to achieve the growth target of around 5 percent for this year," Premier Li said when speaking at the 2024 Summer Davos in the northeastern city of Dalian last month.

Many foreign-invested institutions have recently raised growth expectations for the country's economy. Barclays and Goldman Sachs have lifted their forecast for China's GDP growth in 2024 to 5 percent from the previous 4.4 percent and 4.8 percent, respectively.

The International Monetary Fund (IMF) also revised China's economic outlook to 5 percent, 0.4 percentage points higher than the previous forecast.

According to IMF analysis, a 1 percentage point increase in China's GDP growth would result in an average of 0.3 percentage point increase in growth for other economies.

Qi Yunlan, a researcher at the Development Research Center of the State Council, said that with the macro economy on a solid footing for recovery and policy incentives paying off, China is very likely to achieve its annual growth target.

A key part of China's growth momentum against headwinds has come from its new growth drivers and faster upgrading of traditional industries. Investment into high-tech manufacturing and services expanded 10.1 percent and 11.7 percent, respectively, in the first half, well above the 3.9 percent headline growth of fixed-asset investment.

The NBS also expected the ongoing third plenary session of the 20th Central Committee of the Communist Party of China, which primarily studies issues concerning further comprehensively deepening reform and advancing Chinese modernization, to further liberate and develop social productive forces and boost social vitality.