Forecasts show resilience of China's economy

This is an editorial from China Daily.

The International Monetary Fund on Wednesday upgraded China's growth outlook by 0.2 percentage points to 4.6 percent for the year 2026 from the previous projection in April, while downgrading its 2026 global economic growth forecast by 0.1 percentage points to 3 percent. It attributes the Chinese economy's performance to the robust expansion of its high-tech manufacturing sector and the strong export growth that has followed.

The World Bank also pointed out in its latest China Economic Update, released on Tuesday, that China's investment in high-tech sectors grew by 4.5 percent year-on-year in January-May, driven by robust artificial intelligence-related demand at home and abroad.In June, the OECD had predicted that China's economy will grow by 4.5 percent in 2026.

A closer examination of some key datasets from the first half of 2026 also highlights the foundations of the Chinese economy's steady performance.

By the end of May, the country's cumulative installed power generation capacity surpassed 4 billion kilowatts, a year-on-year increase of 11 percent, and a figure that exceeds the combined capacity of the United States, the European Union, India, Japan and Russia. It took eight years to go from 1 to 2 billion kilowatts, but only about two years to climb from 3 to 4 billion kW. This achievement is built upon the world's most complete new energy industry chain, which produces 80 percent of global photovoltaic modules and 60 percent of wind power equipment.

The fast advancement of artificial intelligence is fueling the momentum driving the economy. In early 2024, China's average daily token usage was just 100 billion. By May 2026, this figure had surged to hundreds of trillions, the highest in the world. This soaring token rate reflects the deep integration of AI into manufacturing and daily life, which has boosted efficiency across sectors spanning chemical production to software development. From January to May, high-tech manufacturing contributed nearly 40 percent to the country's industrial growth, while equipment manufacturing contributed nearly 60 percent to industrial growth. All this is a clear testament to China's accelerating shift toward an innovation-led economy.

Chinese consumption is displaying renewed vitality. The national consumer goods trade-in program has proved to be a phenomenal success, with sales exceeding 1 trillion yuan ($147 billion) by June 20, benefiting 136 million people. This policy has not only invigorated the domestic consumption market but also spurred industrial upgrading, with high-efficiency appliances and new energy vehicles at the forefront.

China's consumer price index rose 1 percent year-on-year in June, and the country's producer price index went up 4.1 percent year-on-year, according to data released by the National Bureau of Statistics on Thursday.

The country's new energy vehicle sector reported continued growth in the first half of 2026, with output and sales both exceeding 7 million units during the period, latest industry data showed on Thursday. NEV output from January to June reached 7.44 million units, while sales stood at 7.45 million units, according to the China Association of Automobile Manufacturers.

Also China's commitment to openness and integration is reflected in its record-breaking foreign trade with Africa. The country has implemented a zero-tariff policy for all 53 African countries with which it has diplomatic ties since May 1. In the first five months of 2026, China-Africa trade registered an 18.2 percent year-on-year increase to reach 1.14 trillion yuan, the first time the figure has surpassed 1 trillion yuan. This is a testament to the fact that China is creating new opportunities for shared growth.

The IMF's decision to lower its global growth forecast underscores the difficulties facing many countries, including inflationary pressures, geopolitical tensions, and supply chain disruptions. In this context, what China has achieved in the past six months highlights the country's ability to navigate global challenges and maintain steady growth.

Even so, with economic headwinds persisting, China's macroeconomic policy will continue to pair moderate monetary easing with proactive fiscal action — but with a sharper focus on targeted measures, rather than broad-based stimulus. The second half of the year will likely bring faster special-purpose and special treasury bond issuance, as well as more support for livelihoods and consumer spending through transfers and subsidies. At the same time, lingering risks in local government debt and property sector financing will require steady, ongoing efforts to unwind.