China Outlines H2 Policy Priorities: Counter-Cyclical Measures, Private Investment, and AI Legislation

China's top economic planning agency, the National Development and Reform Commission (NDRC), has signaled plans to step up macro policy efficiency and counter-cyclical adjustments in the second half of the year. Following 4.7% year-on-year GDP growth in the first half, supported by expanding high-tech manufacturing and trade gains, authorities are moving to finalize the allocation of 755 billion yuan in central budget investments. Key priorities include pushing 109 major engineering projects, encouraging private capital in growth industries, and accelerating the legislative process for a national Artificial Intelligence Law.

The second-half policy implementation is crucial for ensuring China meets its annual economic targets amid ongoing external uncertainties. By combining traditional infrastructure support with targeted incentives for private capital and legal frameworks for advanced industries like AI, policymakers aim to solidify economic recovery while laying the structural groundwork for the upcoming 15th Five-Year Plan.

China's economic strategy for the second half of the year will focus on enhancing policy efficiency, expanding counter-cyclical adjustments, and spurring new growth drivers, according to recent statements from the National Development and Reform Commission (NDRC). At key late-July meetings reported by People's Daily and CCTV, economic planners noted that China's gross domestic product expanded 4.7% year-on-year in the first half of the year, generating an incremental gain of 3.6 trillion yuan. New growth drivers—including high-end manufacturing, the smart economy, and modern services—contributed more than 40% to overall economic expansion. High-tech manufacturing and equipment manufacturing grew by 13.3% and 9.3% year-on-year, respectively, while profits for large industrial enterprises rose 18.7%. External trade also registered gains: total goods trade grew 16.9%, 'New Three' exports rose 46.1%, and integrated circuit exports surged 88.8%. Despite external headwinds and a brief slowdown in April, economic indicators rebounded in May and June. To sustain this momentum, NDRC official Zhou Hongwei emphasized that China plans to roll out targeted incremental policies and strengthen counter-cyclical adjustments to achieve its annual economic targets and lay a foundation for the 15th Five-Year Plan. On the domestic demand front, the NDRC confirmed that 755 billion yuan in central budget investment for the year has been largely allocated, with increased focus on government investments in public welfare. Planners will coordinate 109 major engineering projects alongside the 'Six Networks' infrastructure initiative. To reignite private capital, the government plans to target high-growth sectors with tailored measures designed to enable private enterprises to invest with confidence. Technology and industrial modernization remain core priorities. With AI-related sectors maintaining growth rates above 30%, policy makers plan to optimize computing infrastructure through the 'East Data West Computing' framework, accelerate benchmark AI deployments across manufacturing, agriculture, and energy, and expedite the national legislative process for a dedicated Artificial Intelligence Law.