SCIO press conference on China's economic performance in H1 2026

Market News International:

What are the main reasons for the recent fluctuations in fixed-asset investment? Are these fluctuations due to temporary factors such as projects being brought forward into the first quarter and local governments concentrating on debt repayment, or do they reflect weak underlying investment demand? Thank you.

Mao Shengyong:

Thank you for your questions. There is a lot of interest in fixed-asset investment. Fixed-asset investment growth was negative in the first half of this year, but it is worth noting that its scale remained considerable. Fixed-asset investment reached 22.6 trillion yuan in the first half, which is a very large figure. As China enters a different stage of development, particularly with the move from high-speed growth to high-quality development, the structure, quality and returns of fixed-asset investment matter more than they once did, and deserve closer attention. Where investment goes, whether it delivers returns and quality, whether it matches our expectations, and whether it aligns with the direction of national policy matter more than the total volume and pace of fixed-asset investment. Based on the investment data in the first half of the year, investment has played a major role in promoting the development of new quality productive forces, technological innovation, industrial upgrading, and improvements in people's well-being. Let me give a brief overview covering three areas.

First, investment in emerging sectors continues to build momentum. Local governments have followed the plans and requirements for developing new quality productive forces in line with local conditions, steadily increasing investment in emerging industries and positioning themselves in future industries. Investment grew strongly in new energy, artificial intelligence and integrated circuits. In the first half of the year, investment in high-tech industries grew 4.6% year on year. Within that, investment in integrated circuit manufacturing climbed 8.8%, special electronic materials manufacturing grew 10% and lithium-ion battery manufacturing rose 24.4%. Corporate investment is increasingly shifting toward innovation, a trend that is quite evident. In the first half of the year, investment in intellectual property products increased 9.4% year on year, 1.5 percentage points faster than in the first quarter. Investment in intellectual property products such as R&D and the digital economy continued to accelerate and maintained a high growth rate. The implementation of the large-scale equipment renewal policy has spurred corporate demand for retooling and upgrading. In the first half of the year, investment in equipment and instrument purchases grew 8.1%.

Second, investment in new infrastructure delivers long-term benefits. Infrastructure construction serves both to boost social productivity and to make daily life more convenient for the public. It is an important safeguard and support for high-quality development. Planning and construction of the six major infrastructure networks have picked up pace this year, with traditional and new infrastructure advancing in turn. Computing power networks and next-generation communication networks are being rolled out faster, and investment in related sectors has grown relatively quickly, building future growth momentum for digital and intelligent transformation. In the first half of the year, investment in the internet and its related services surged 39.9% year on year. Investment in information transmission rose 25.6%, optical fiber manufacturing 26.5%, water transport 19.8% and air transport 11%. As of the end of May, China had more than 5 million 5G base stations, accounting for 39% of all mobile base stations. Fiber-optic access ports represented 96.7% of broadband internet access ports.

Third, investment in areas related to people's livelihoods is precisely targeted at shoring up weak links. Greater investment in people's livelihoods is an important way to improve people's well-being. Across the board, more attention has gone to closely combining investment in physical assets with investment in people, and solid progress has been made in agricultural and rural modernization and all-round rural revitalization. In the first half of the year, investment in agriculture increased 6.7% year on year and investment in fisheries grew 12%. Ecological restoration, pollution control and similar projects advanced steadily, driving a 5.9% increase in investment in environmental monitoring and governance services.

Looking ahead, there remains broad scope for expanding effective investment. China's per capita capital stock is currently well below that of developed countries, and the gap points to potential and room for growth. Investment demand is strong in upgrading traditional industries and in promoting emerging and future industries. As the population structure changes, there is also huge investment potential in areas such as elderly care and childcare services, community-level medical and health care, expanding quality education, and advancing all-round rural revitalization. To date, all of this year's 800 billion yuan for the implementation of major national strategies and security capacity-building in key areas has been allocated, along with 200 billion yuan in equipment renewal funds. Construction of the six major infrastructure networks is being advanced in a coordinated way, and special plans for urban renewal, building a new energy system and the high-quality development of the industrial internet are being rolled out one after another. Various policies working in concert should help stimulate investment and unlock its growth potential. Thank you.