SCIO briefing on China's economic performance in May 2025

Shandian News:

What are the new highlights and changes in the domestic consumer market in May? How effective have the previous policies aimed at boosting consumption been? And what are your expectations for the driving force and trend of consumption growth? Thank you.

Fu Linghui:

Thank you for your questions. Consumption is an important engine of economic growth, and vigorously boosting consumption is key to responding to external changes, smoothing domestic circulation, and improving residents' quality of life. Since the beginning of this year, various regions and departments have resolutely implemented the decisions and deployments of the CPC Central Committee and the State Council, actively promoted special actions to boost consumption, and intensified and expanded the implementation of the consumer goods trade-in policy. As a result, market sales have grown rapidly, service consumption potential has been unleashed, and these efforts have effectively supported the stable economic performance.

Under the combined effects of the May Day and Dragon Boat Festival holidays, the "6.18" E-commerce Shopping Festival, and the consumer goods trade-in policy, the total retail sales of consumer goods in May increased by 6.4% year on year, accelerating by 1.3 percentage points from the previous month. From January to May, the retail sales of services increased by 5.2%, accelerating by 0.1 percentage point from January to April. The acceleration of consumption growth has been mainly supported by the following factors:

First, the consumer goods trade-in policy has shown a significant driving effect. The effectiveness of the trade-in policy continues to be evident, unleashing residents' consumption potential, and promoting the rapid growth of sales of related goods. In May, the retail sales of household appliances and audiovisual equipment, communication equipment, cultural and office supplies, and furniture by enterprises above designated size increased by 53%, 33%, 30.5% and 25.6% year on year, respectively, collectively driving the total retail sales of consumer goods to rise by 1.9 percentage points, an increase of 0.5 percentage point from the previous month.

Second, the "6·18" E-commerce Shopping Festival provided significant momentum. This year's "6·18" E-commerce Shopping Festival, launched on May 13 by e-commerce platforms, combined with the goods trade-in policy, has driven the acceleration of online retail sales. From January to May, the online retail sales of physical goods increased by 6.3% year on year, accelerating by 0.5 percentage point compared with January to April, accounting for 24.5% of the total retail sales of consumer goods.

Third, holiday consumption showed good performance. During the May Day and Dragon Boat Festival holidays, there was a significant increase in travel by residents, with domestic tourism trips increasing by 6.4% year on year. Regions actively explored new models of cultural and tourism consumption, with diversified supply injecting new momentum into expanding consumption, leading to rapid growth in spending on cultural and tourism leisure, transportation services and dining-out. In May, catering revenue increased by 5.9% year on year, up 0.7 percentage point from the previous month. From January to May, the retail sales of tourism consulting and rental services, transportation services, and cultural and sports services all maintained double-digit growth.

Fourth, new growth drivers for consumption are continuously being unleashed. Market supply continues to diversify, the consumption environment is gradually improving, and residents' demand for high-quality living is increasing, driving the rapid growth of related goods and services sales. In May, the retail sales of sports and entertainment goods and gold and silver jewelry by enterprises above designated size increased by 28.3% and 21.8% year on year, respectively, maintaining double-digit growth. The rapid development of network technology has driven the expansion of residents' demands for communication services. From January to May, the retail sales of communication information services increased by more than 10%, accelerating by 0.5 percentage point compared with the January-April period.

It should also be noted that, since the beginning of this year, China has gradually expanded the range of countries that qualify for visa-free entry, promoting personnel exchanges and invigorating the consumer market. During the May Day holiday, the number of inbound foreign nationals entering under the visa-free policy increased by more than 70% year on year. Data from travel platforms shows that the volume of inbound tourism orders has multiplied, and the number and amount of payment transactions processed by China UnionPay and NetsUnion for overseas visitors in China have increased by 2.4 times and 1.3 times, respectively.

Overall, the economy has remained stable, the effects of consumer goods trade-in policies have continued to emerge, and the vitality of the consumer market has gradually increased. Looking ahead, new forms and models of consumer spending — such as livestreaming sales and instant retail — are becoming increasingly mature. The silver economy, first-release economy and low-altitude economy are developing rapidly, with new growth drivers in consumer spending continuing to emerge. However, it should also be noted that consumer capacity and confidence still need to be improved, and the internal momentum driving consumption must be further strengthened. Moving forward, we will further implement the Special Action Plan to Boost Consumption, with a focus on enhancing consumer capacity and confidence. We will continue to improve the consumption environment, significantly increase the supply of high-quality products, actively promote the upgrading and expansion of service consumption, and support the steady development of the consumer market. Thank you.