China economy shows K-shaped growth driven by tech exports

China's economy is experiencing a structural shift characterized by a “K-shaped” growth pattern. While GDP grew by 4.7% in the first half of 2026, there is a significant divergence between robust external demand and sluggish domestic consumption.

High-tech manufacturing and emerging industries are driving growth. Exports of technology-intensive products, such as integrated circuits, automobiles, and new energy vehicles (NEVs), have seen double-digit increases. Specifically, the NEV industry has scaled from millions to tens of millions of units, with China accounting for over 70% of global production in batteries and key materials. The Ministry of Industry and Information Technology is prioritizing 6G technology development and smart connected vehicle standards for the upcoming “15th Five-Year Plan” period.

Conversely, domestic consumption remains pressured by the collapse of the real estate bubble, which has impacted household wealth and related industries like construction and furniture. Experts note that while new drivers like AI and digital products are expanding, they have not yet fully offset the decline in traditional sectors such as real estate and low-end manufacturing. The transition from old to new economic drivers remains a central focus of national policy to ensure long-term stability and high-quality development.