SCIO briefing on China's economic performance in May 2025

CCTV:

Based on economic performance in the first five months, what trends have emerged in the Chinese economy amid a complex and challenging external environment? What are the forecasts for the economic trend in the first half of the year? Thank you.

Fu Linghui:

Thank you for your questions. Since the beginning of this year, the external environment has grown increasingly complex, with rising unilateralism and protectionism severely impacting the international economic and trade order. However, China's economy remains fundamentally stable, backed by numerous advantages, strong resilience and great potential. The momentum for stable growth, the trend toward high-quality development, and the shift toward new and positive development have all remained unchanged. These are the sources of confidence and assurance that enable China's economy to overcome various risks and challenges as it moves forward.

First, the momentum for stable economic growth remains unchanged. In the first quarter of this year, China's economy got off to a strong start. Since April, however, increased uncertainty in trade policies and other factors have weakened the momentum of global economic growth. Major economic organizations have lowered their forecasts for growth in 2025. According to the latest report from the World Bank, the global economy is projected to grow 2.3% in 2025, down 0.4 percentage point from the forecast at the beginning of the year. Under these circumstances, maintaining growth stability in China's economy since the second quarter has been particularly challenging. From a production perspective, the value-added output of industrial enterprises above designated size rose 6.3% year on year from January to May, while the service industry production index grew 5.9%. Both indicators remained generally stable compared with the first quarter. From a demand perspective, total retail sales of consumer goods rose 5% from January to May, showing faster growth than in the first quarter. Fixed-asset investment increased 3.7%, remaining basically stable.

Second, innovation-driven development remains unchanged. In recent years, China has been gradually shifting from old to new drivers of growth, with innovation playing an increasingly important role in development. This year, all sectors have continued to increase investment in innovation, advance scientific and technological innovation, and drive industrial innovation, with the economy maintaining its shift toward new development trends. In the first five months, the value added of high-tech manufacturing enterprises above designated size increased 9.5% year on year. Breakthroughs have been made in cutting-edge technology fields such as large AI models and humanoid robots, further boosting industrial upgrading. From January to May, the output of industrial robots rose 32% year on year, while the value added of in-vehicle smart device manufacturing increased 26.8%.

Third, the shift toward green and low-carbon development remains unchanged. China is unswervingly promoting the transition to a green and low-carbon economy, which not only improves the ecological environment but also supports the steady growth of green industries, particularly in the new energy sector, fostering new drivers of economic growth. This year, the development of China's green industry has continued to improve. In the first five months, the output of NEVs and solar cells increased 40.8% and 18.3% year on year, respectively. Clean energy generation has grown rapidly, with wind, solar power generation by industrial enterprises above designated size increasing 11.1% and 18.3%, respectively, from January to May.

Fourth, the pursuit of high-level opening up remains unchanged. Against the backdrop of rising protectionism, unilateralism and challenges to global economic and trade exchanges, China continues expanding its high-level opening up. We're actively engaging in economic and trade cooperation with partners worldwide on the basis of mutual benefit and win-win results. The positive results are becoming increasingly apparent. From January to May, China's total volume of trade in goods increased 2.5% year on year, while the value of trade in services from January to April rose 8.2% compared with the same period last year. To facilitate cross-border travel, China has proactively expanded its visa-free policies, promoting economic ties and people-to-people exchanges. During this year's May Day holiday, the number of inbound visitors entering China under the visa-free policy increased 72.7% year on year.

Fifth, the ongoing improvement of people's livelihoods remains unchanged. Ensuring and improving people's well-being during development is a key goal of Chinese modernization. Since the beginning of this year, all localities and government departments have focused on stabilizing employment and the economy, working to boost personal incomes and strengthening efforts to better meet people's basic needs. From January to May, China's average surveyed urban unemployment rate was 5.2%, indicating a generally stable employment situation. From January to April, spending on social security and employment in the national general public budget rose 8.5%, while education spending increased 7.4%. Both rates outpaced the overall growth of total general public budget spending. The General Office of the CPC Central Committee and the General Office of the State Council recently issued new guidelines to further safeguard and improve public well-being and address the most pressing concerns of the public. As related policies are gradually implemented, they will further enhance people's quality of life.

These conditions show that China's economic performance had a strong start in the first quarter. Despite increased external shocks in the second quarter, China's strong economic foundation, effective policies and robust development momentum continue to provide firm support for stable economic performance. Therefore, based on the first half of the year, China's economy is expected to maintain overall stability and achieve steady progress. Thank you.