SCIO briefing on China's economic performance in May 2025

South China Morning Post:

After the Geneva agreement between China and the U.S. was reached in May, did the related outcomes show up in the May economic data, such as in terms of exports, employment and investment? Thank you.

Fu Linghui:

Thank you for your question. In May, China and the U.S. made substantial progress and reached important consensus during trade talks in Geneva, which is beneficial to the improvement of the economic and trade relations between the two countries and also conducive to the development of the world economy. From the overall situation in May, the economy operated steadily. Under the effect of macro policies, production and demand maintained steady growth, employment continued to improve and remained stable overall, new momentum continued to grow, high-quality development was steadily promoted, and the economy showed a steady and progressive development trend. Thank you.

Reuters:

What is the government's economic forecast for the second quarter? And will further policy support measures need to be rolled out?

Fu Linghui:

Thank you for your questions. As for the forecast of economic growth, as a department involved in statistics, we generally do not make such predictions. Because we are data producers, there is a certain contradiction if we also engage in making predictions. In terms of the overall economic operation, the annual economy still has relatively good support. Since the beginning of this year, facing the complex environment, under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, China's economy has withstood pressure and operated steadily, showing strong resilience and vitality. Judging from the current situation, the long-term positive trend of our economy remains fundamentally unchanged. It has distinct characteristics such as a stable foundation, numerous advantages, strong resilience and great potential, thereby providing a solid foundation, guarantee and support to ensure stable economic operation.

First, the development trend is good, and the stable operation has a foundation. Since the second quarter, although the external environment has been complex and volatile, macro policies have continued to exert their effects; the large number of business entities have adapted and pursued innovation; our economy has withstood the pressure and achieved stable growth; and high-quality development has been steadily advanced, laying a solid foundation for the stable operation of the economy in the next stage. In terms of the major indicators, from January to May, the service industry production index and total retail sales of consumer goods increased by 5.9% and 5% year on year, respectively, both accelerating compared to the first quarter. The added value of industries above designated size achieved a fast growth rate of 6.3%.

Second, policy efforts have been effective, ensuring stable and long-term development. Since the beginning of this year, China has implemented more proactive macro policies, increased counter-cyclical adjustments, accelerated the promotion of the "two major" (major national strategies and security capacity building in key areas) and "two new" (large-scale equipment upgrades and trade-in of consumer goods) policies, effectively enhanced consumption vitality, driven production growth, promoted transformation and upgrading, and fully demonstrated the important role of macro policies in stabilizing economic operations. Looking forward, China has sufficient reserves in its policy toolbox, with room for macro policy adjustments, which can be dynamically adjusted and actively responded to according to changes in the situation, continuing to guide the stable operation of the economy.

Third, innovation momentum is growing, supporting positive development. China continues to unwaveringly adhere to high-quality development, accelerate the cultivation and growth of new quality productive forces, and speed up the integration of technological innovation and industrial innovation. Meanwhile, the development trend of emerging industries is relatively good, traditional industries have been renewed and upgraded, the development of the digital economy and green economy is flourishing, and the continuously growing new momentum will provide a continuous new driving force for economic development. From January to May, the added value of digital product manufacturing industries above designated size increased by 9.9% year on year; and from January to April, the operating income of "little giant" service industry enterprises above designated size, which use specialized and sophisticated technologies to produce novel and unique products, increased by 18.4%, fully reflecting the strong vitality of the new momentum.

It is also worth noting that at the recent first meeting of the China-U.S. economic and trade consultation mechanism, the two sides reached a principled agreement on a framework of measures to implement the consensus from the June 5 call between the two heads of state and to consolidate the outcomes of the Geneva economic and trade talks. New progress has been made in addressing each side's economic and trade concerns, helping to promote the stable and sustainable development of China-U.S. economic and trade relations. This is also expected to bring greater stability and certainty to the global economy.

Of course, it should also be noted that the external environment remains complex and severe, with many unstable and uncertain factors. Domestically, there are difficulties in transitioning between traditional and new drivers of growth, and pressure to maintain stable economic performance persists. In the face of a complex environment, the key is to remain focused on our own businesses, implement more proactive and effective macroeconomic policies, continuously strengthen the internal momentum of economic development, and respond to external uncertainties with the certainty provided by high-quality development. Thank you.