Nation’s Economy Showing Signs of Stability

A report from chinadaily.com.cn on June. 30th, 2025:

This year, China’s economy continues to demonstrate strong inertia and resilience in maintaining stable growth and quality enhancement. Amid internal and external pressures, China’s macroeconomic policies have been characterized by proactive and well-targeted measures to bolster domestic demand, industrial upgrading and structural optimization, propelling the economy toward higher-quality and more sustainable growth.

As the key engine of economic recovery, consumption has shown steady improvement supported by policy incentives and structural upgrades, with its contribution to GDP projected to increase significantly. Meanwhile, new quality productive forces are rapidly taking shape led by robust expansion in high-tech industries, which are becoming the catalyst for investment growth.

Fueled by multiple growth drivers, China’s economy has exhibited steady advancement as endogenous momentum progressively strengthens, fortifying the groundwork for high-quality development.

As consumption remains the bedrock of a firm recovery, policy tailwinds reinforce domestic demand -- the linchpin of China’s economic resilience. Early 2025 saw intensive campaigns targeting automobiles, electronics and tourism, alongside accelerated trade-in subsidies nationwide, all aimed at reviving the consumer sector. Services consumption surged during the spring travel boom, while premium goods sales exceeded 20 percent year-on-year growth in May.

China’s consumption upgrade trend has become more pronounced as emerging models inject vitality into the market. In addition to flourishing online consumption models, growing consumer preference for quality and diversity is facilitating rapid growth in high-value-added goods. Moreover, by enhancing household purchasing power, expanding quality supply and improving consumption environments, policies aim to fully unleash demand potential, promote economic development and elevate living standards.

Domestic consumption is poised for more robust growth in the second half of 2025.With the stabilization of employment and rise in household incomes, China’s total retail sales are expected to achieve higher year-on-year growth than in 2024. In the services sector, upgraded demand will continue to be unleashed, emerging as a new engine for consumption.

Livelihood improvement measures -- including pension increases and subsidies for low-income groups -- will gradually enlarge middle-income populations and strengthen sustainable consumption capacity. Concurrently, systemic reforms in housing, healthcare and education will reduce households’ high cost expenditure burdens, thereby boosting consumption appetites.

In 2025, consumption is projected to contribute over 60 percent of GDP growth, with its potential unfolding through three phases: policy stimulus, confidence recovery and endogenous expansion. Short-term stimuli yield quick results, while medium-term income upturns and structural reforms will shift consumption from rebound to active extension, cementing their pivotal role in China’s high-quality development.

In May 2025, value-added industrial output above a designated size grew 5.8 percent year-on-year, with equipment manufacturing surging 9.0 percent and high-tech manufacturing up 8.6 percent. While traditional sectors including real estate are still undergoing realignment, this strong performance highlights how emerging sectors -- particularly advanced equipment and intelligent manufacturing -- are taking over to become the new engine of China’s industrial growth.

The investment landscape is set for more proactive structural rebalancing. In 2025, ultra-long term special treasury bonds will prioritize major national projects and security capacity in key areas, while extending the implementation of large-scale equipment renewals and trade-ins of old consumer goods as well as providing policy support for manufacturing upgrades and investment in high-tech industries will bring about further stabilization.

Manufacturing and high-tech industry investments are anticipated to maintain significantly faster increases than overall investment in 2025. Guided by fiscal policy, infrastructure investment is expected to maintain moderate expansion at 5 to 6 percent. Notably, manufacturing and technology sectors will account for a rising share, balanced by real estate’s declining proportion. This rebalancing will not only reduce structural reliance on property, but also strengthen China’s endogenous growth drivers, injecting continuous momentum into high-quality development.

Quality-driven export upgrading, global footprint optimization and structural transformation are collectively enhancing China’s economic resiliency. The rapid development of new quality productive forces serves as a strong underpinning for export growth alongside directing capital toward high-tech manufacturing and green industries. Through independent innovation and international brand-building initiatives, Chinese companies are establishing a stronger position in upscale global markets.