Key Facts
• China’s Q2 2025 GDP growth: +5.2% YoY, down from Q1’s +5.4%.
• Domestic demand improved due to economic policies, but July saw signs of decline.
• External demand remained strong; exports increased despite U.S.-China trade tensions.
• U.S.-China tariff suspension extended by 90 days as of August 12, 2025.
• Real GDP growth forecast: +4.7% in 2025, +3.8% in 2026.
• Real estate market: Sales and prices remain negative but show slight improvement.
• July 2025 consumer price index (CPI): 0% YoY; core CPI rose.
• Fixed asset investment in July fell sharply, with manufacturing and infrastructure slowing.
• Unemployment among 16–24-year-olds surged in July due to graduation season.
• Government fiscal spending slowed, while special fund revenues increased.
• Monetary policy: Policy rates unchanged since May 2025 after a 10bps cut.
Summary
China’s economic growth in 2025 is projected to meet the +5% target, supported by strong external demand and domestic policies. However, signs of a slowdown are evident in the second half, with declining investments and weakening consumer confidence. Real estate remains a concern, with sales and prices still negative but improving slightly. Trade tensions with the U.S. persist, though tariff escalation risks are low. Inflation remains subdued, with CPI at 0% in July 2025. Fiscal and monetary policies show mixed results, with government spending slowing but fund revenues rising. The unemployment rate among youth remains high, reflecting ongoing labor market challenges. Looking ahead, GDP growth is expected to decelerate to +4.7% in 2025 and +3.8% in 2026, with economic policies and global trade dynamics playing critical roles.
