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Indicators show China's economy remains resilient in H1 on back of stepped-up policies

Global Times

By Ma Jingjing Published: Jul 01, 2025 11:12 PM

China is expected to unveil major economic figures for the first half in about two weeks, and some leading indicators released recently show that the economy has been trending upward despite short-term fluctuations amid rising external challenges. Analysts said on Tuesday that the world's second-largest economy will likely continue steady growth in the second quarter, thanks to the country's long-term-oriented reform, ample policy room and industrial transformation and upgrade.

China's Caixin manufacturing purchasing managers' index (PMI) rose to 50.4 in June, up 2.1 points from one month earlier, returning to expansion territory following a brief contraction in May, according to a Caixin-sponsored survey released on Tuesday.

A reading above 50 signals an expansion in activity, while a number below that signals a contraction. The reading followed China's official factory activity data released by the National Bureau of Statistics (NBS) on Monday, which stood at 49.7 for June - up 0.2 points from May.

The major index shows that the economy increasingly followed a stable and upward trend between January and June despite fluctuations in some individual months amid rising external pressure this year, and demonstrated relatively strong resilience, Cao Heping, an economist at Peking University, told the Global Times on Tuesday.

"The stepped-up policy support, export diversification and the accelerated development of new quality productive forces provide new support for the world's second-largest economy. Policies aimed at expanding and upgrading consumption have helped rapidly unleash the consumer market and contributed to stable economic growth," Cao said.

Amid the better-than-expected figure, Morgan Stanley Chief China Economist Robin Xing noted on Monday that China's economic growth remained strong in the second quarter this year, projecting that the country's real GDP growth rate will stay strong at 5 percent.

"The global situation is evolving rapidly, yet China's economy remains resilient," Liu Jing, chief economist for Greater China at HSBC, said in a note sent to the Global Times on Tuesday, noting that China's policymaking approach is likely to prioritize a "steadfast yet steady" strategy.

According to data released by the National Film Administration on Tuesday, China's film market maintained strong growth in the first half of 2025, with total box office revenue exceeding 29.23 billion yuan ($4.09 billion), a 22.91 percent year-on-year increase, the Xinhua News Agency reported.

During the same period, the number of moviegoers increased to 641 million, up 16.89 percent.

Looking ahead to the second half, although China's export growth may face some pressure amid fading front-loaded shipments, stepped-up macro-policies are expected to provide effective support for domestic demand, Liu said.

In the latest move to boost domestic demand, six government departments including the People's Bank of China on June 24 unveiled guidelines on ramping up financial support to effectively boost consumption. The guidelines propose 19 key measures covering six aspects, including supporting the enhancement of consumption capacity, expanding financial supply in the consumption sector and tapping residents' consumption potential.

Citing the examples of the complete removal of hukou (household registration) restrictions for participating in social insurance at the place of employment and the Private Sector Promotion Law taking effect - all of these reflect long-term-oriented policy direction, Liu said, noting that she pays close attention to the upcoming 15th Five-Year Plan (2026-30) to gain insight into the direction of the next phase of structural reform.

In addition, China's manufacturing industry is undergoing a process of upgrading and moving up the value chain. While the current direction of the global industrial chain restructuring remains unclear, the general trend is clear: China's manufacturing industry will continue to extend toward both ends of the "smiling curve," and Chinese enterprises are actively expanding overseas and pursuing higher added value and deep integration into global industrial chains, Liu said.

"China retains ample policy room, and the effects of policies continue to unfold. As a result, the economy is expected to post steady growth in the second half of the year, contributing to the achievement of the annual GDP growth target of about 5 percent," said Wen Bin, chief economist at China Minsheng Bank.