CNR:

Based on July's economic data and your judgment of the current situation, what are your predictions and outlook for the economic trajectory in the second half of 2025? Thank you.

Fu Linghui:

Thank you for your question. Affected by multiple factors, some economic indicators fluctuated in July. However, the cumulative growth rate of key indicators has remained generally stable. Employment and prices were generally stable; and the steady economic performance remained unchanged. At the same time, driven by innovation, new growth drivers have been growing and expanding, high-quality development has been steadily advanced, and solid steps have been made in economic development. The national economy maintained a trend of steady progress. Looking ahead, despite facing various risks and challenges in economic operations, the fact that China's economy is underpinned by a stable foundation, multiple advantages, strong resilience and significant potential remains unchanged. The supporting conditions and fundamental trends for long-term sound economic development have not changed. With macro policies taking effect and proactive actions taken by all parties, market demand has expanded, new quality productive forces have developed, and market vitality has improved, which will strongly support the stable operation of the economy and steadily improve the quality of development. The second half of the year has the support of the following factors:

First, there is support for the expansion of market demand. In terms of consumption, the special actions to boost consumption have continued to take effect, and the consumption potential has been continuously released. From January to July, the total retail sales of consumer goods increased by 4.8% year on year, and service retail sales grew by 5.2%, with both remaining generally stable. As efforts to boost goods consumption and to cultivate new growth drivers for service consumption steadily progress, the expansion of consumption will continue to be supported. In terms of exports, despite the impact of high tariffs from individual countries, China's foreign trade entities have actively expanded into diversified markets, with increases in both the quantity and quality of goods exports, continuing to demonstrate the resilience of foreign trade. From January to July, China's goods exports grew by 7.3%, with exports of mechanical and electrical products growing by 9.3%. The expansion of market demand has created favorable conditions for stable economic operation.

Second, new quality productive forces have been actively developed. Various regions and departments have actively promoted the integrated development of scientific and technological innovation with industrial innovation, cultivated and strengthened new quality productive forces, and continuously expanded new growth drivers. High-tech industries have grown rapidly, and provided stronger support for economic growth. From January to July, the value added of high-tech manufacturing industries above designated size increased by 9.5% year on year, of which the value added of electronic and communication equipment manufacturing and aerospace vehicle and equipment manufacturing increased by 12.8% and 8.6%, respectively. The digital and intelligent transformation of industries has been accelerated, promoting the development of emerging industries. From January to July, the manufacturing of digital product equipment and intelligent unmanned aerial vehicles maintained rapid growth. The widespread application of large-scale AI models has significantly increased the demand for computing power, driving a substantial increase in server production.

Third, reform and opening up has continued to be deepened. Facing the complex and severe domestic and international situation, China has stayed firmly committed to deepening reforms and expanding high-standard opening up, thereby improving economic circulation, and boosting the resilience and vitality of foreign trade. In the first half of the year, the final consumption expenditure contributed 52% to economic growth, up 7.5 percentage points from the previous year. From January to July, the total value of imported and exported goods increased by 3.5% year on year, and both the freight turnover of goods and passenger turnover maintained rapid growth. As the construction of a unified national market advances, disorderly competition among enterprises is being regulated in accordance with laws and regulations, integrated development of domestic and foreign trade is being promoted, the vitality of business entities is being vigorously stimulated, and the dual circulation of domestic and international markets will be smoother.

Fourth, macro policies have continued to take effect. Since the beginning of this year, more proactive macro policies have been implemented, driving the expansion of production demand and promoting steady economic growth. From January to July, the retail sales of household appliances and audiovisual equipment, and communication equipment, supported by consumer goods trade-in policies, increased by 30.4% and 22.9% year on year, respectively. Under the two major initiatives of implementing major national strategies and building up security capacity in key areas as well as the policy of large-scale equipment renewals, the added value of the equipment manufacturing industry increased by 9.9% year on year from January to July, and investment in water conservancy and electricity grew rapidly. As policies to expand consumption demand in ensuring and improving people's livelihoods and to promote the high-quality implementation of the "Two Major Initiatives" policies yielded results, it will contribute to stable economic performance.

Recently, the International Monetary Fund (IMF) in its latest report, raised its China's economic growth forecast this year by 0.8 percentage point, which also reflects the international community's growing confidence in China's economic development. Thank you.