SCIO briefing on China's economic performance in May 2025

Dazhong Daily:

Amid the continued rollout of economic stabilization policies in 2025, how have these combined macroeconomic measures affected May's economic data? How should their performance be evaluated? Thank you.

Fu Linghui:

Thank you for your questions. Since the beginning of this year, in the face of a complex and volatile development environment, various regions and departments have earnestly implemented the decisions and arrangements of the CPC Central Committee and the State Council. They have vigorously pursued more proactive and effective macroeconomic policies, helping the economy withstand pressure and maintain stable operations, with the effects continuing to emerge. Judging by key indicators in May, continued macroeconomic policy support has helped expand demand, boost production, improve expectations and unleash market vitality, providing important backing for stable economic performance.

First, it unleashed the potential of domestic demand. Consumer goods trade-in programs have spurred rapid growth in sales of related products. In May, among retail sales by enterprises above the designated size, sales of household appliances and audiovisual equipment, communication devices, cultural and office supplies, and furniture rose by 25.6% to 53% year on year, posting rapid growth. These categories contributed 1.9 percentage points to the increase in total retail sales of consumer goods. The impact of investment in equipment upgrades has also continued to grow. In the first five months of the year, investment in equipment and tools rose 17.3%, driving overall investment growth by 2.3 percentage points and accounting for 63.6% of total investment growth.

Second, it has driven production growth. Driven by large-scale equipment upgrades, production in related industries has grown rapidly. In May, the value-added output of industries above designated size such as lithium-ion battery manufacturing, ship and related equipment manufacturing, and boiler and prime mover equipment manufacturing rose 28.6%, 12.8% and 11.8% year on year, respectively. With the continued impact of consumer goods trade-in programs, demand for green, intelligent and high-quality products has continued to emerge, which has also driven production growth. In May, production of trade-in products increased, with NEVs up 31.7%, tablet computers up 30.9% and electric bicycles up 20.5%.

Third, it has improved business performance and expectations. With the ongoing rollout of macroeconomic policies, market sales have expanded, driving gains in corporate performance, profit recovery and improved expectations. In terms of corporate performance, from January to April, the profits of industrial enterprises above designated size increased 1.4% year on year, 0.6 percentage point faster than that from January to March. In April alone, profits increased 3%, 0.4 percentage point faster than in March. In terms of expectations and confidence, the manufacturing PMI rebounded by half a percentage point in May compared with the previous month, with the production index returning to expansion territory. The services business activity index stood at 50.2%, marking the third consecutive month it has stayed in the positive growth range.

Fourth, it has increased market vitality. Effective macroeconomic policies have boosted market activity, leading to faster flows of people and goods. In May, the year-on-year growth rate of passenger turnover accelerated compared with the previous month, and the number of domestic tourists during the May Day holiday rose 6.4% nationwide. The expansion and optimization of visa-free policies have led to an influx of foreign tourists, while inbound tourism has also shown strong vitality. Express delivery business volume is expected to maintain rapid growth for May.

Next, we need to further implement the decisions and arrangements of the CPC Central Committee and the State Council. We will adopt more proactive and effective macroeconomic policies, further expand domestic demand, ensure the smooth flow of economic circulation, and stimulate momentum and vitality. These efforts will help to continuously strengthen the foundation for sound economic development. Thank you.