Growth Dragons Weekly. UBTech's Robot Looks Like You, Meituan's AI Agent, and an IPO Oversubscribed 414 Times
What happened in China this week:
New Tech Drives One Third of China’s Economy Now. The Old Economy Is Still Sluggish
UBTech Surge 18% In One Day After Launching Ultra-Realistic Humanoid For Consumers
Meituan Turns Its Super App Into an AI Agent That Books For You. It’s Selling Access To It Too.
China Biotech Stocks Just Had Its Best Week In Months
Autonomous Driving Software Maker Momenta Gets Its IPO Oversubscribed 414 Times
#1 New Tech Drives One Third of China's Economy Now. The Old Economy Is Still Sluggish
China’s economy is in the middle of an awkward, long handover from the old playbook of factories and property to a new one built on tech, AI and innovation. It’s not a clean transition. It’s messy, uneven, and honestly, still a work in progress. But the direction of travel is becoming harder to ignore.
The Caixin BBD New Economy Index climbed to 34.1 in June. In plain terms, new economy industries now make up 34.1% of China’s total economic inputs. That’s up, and it’s being driven by capital investment, tech innovation and labor, with IT and biomedicine doing the heavy lifting.
Patents are up. R&D spending is up. Beijing clearly wants the story to be “China moved on from being the world’s factory.” And to be fair, the data backs that ambition up, at least directionally.
But there’s always a but. One index climbing doesn’t mean the old economy gets to check out gracefully.
Manufacturing PMI ticked up to 50.3 in June. Composite PMI hit 50.6. Technically that’s expansion. Barely.
Here’s the less flattering part. Factories are still making more than anyone wants to buy. Hiring is cautious at best. And producer prices have slipped back into contraction, which is a polite way of saying deflation is still gnawing at corporate margins.
So yes, stimulus and easing trade tensions are helping. But “stabilization” is doing a lot of work in that sentence. This isn’t a boom. It’s a patient being kept comfortable while the new economy tries to grow into the role.
Whether that works is a different question. But you can’t accuse them of not trying to control the narrative.
China’s also doubling down on resource security and decarbonization. New carbon peaking initiatives are getting baked into the upcoming 15th Five Year Plan, more renewables, tighter industrial emissions standards, the usual.
The more interesting number here is the resource recycling target. 8 trillion yuan by 2030. That’s not a small side project. Recycling EVs, batteries, electronics and renewable energy equipment isn’t just an environmental play, it’s a critical minerals strategy in disguise. China’s essentially trying to build a supply chain that doesn’t need to ask anyone else’s permission.
At the same time, Beijing is gradually pulling back direct subsidies for EVs, and vehicle tax breaks for several hybrid and commercial new energy vehicles are set to phase out from 2027. Trade in incentives will still be around, but the training wheels are coming off. We have seen the impact to EV players. Their revenue growth have slowed and margins compressed. China’s EV makers have been expanding aggressively overseas, to get away from the involution situation back home.
Takeaway
The pattern is consistent. Less reliance on subsidies, more reliance on innovation. Less “build more factories,” more “build better technology.”
None of this adds up to a clean growth story. The old economy is stabilizing, not roaring. Deflation is still a drag. And the new economy, for all its momentum, is still only a third of total inputs. It’s not big enough yet to pull the whole machine forward on its own.
