China's Economy Maintains Steady Growth with 5.3% GDP Expansion in First Half of 2025
China's national economy demonstrated a steady improvement in the first half of 2025, with its Gross Domestic Product (GDP) expanding by 5.3 percent year-on-year, reaching approximately 66.05 trillion yuan (about 9.24 trillion US dollars) at constant prices. This performance aligns with the government's annual growth target of "around 5.0%" for the year, showcasing the economy's resilience despite various challenges.
Quarterly Performance and Sectoral Contributions
The growth in the first half of the year was driven by consistent performance across both quarters:
First Quarter (Q1) GDP: Increased by 5.4 percent year-on-year.
Second Quarter (Q2) GDP: Expanded by 5.2 percent year-on-year, slightly moderating from Q1 but still exceeding economists' expectations of 5.1 percent. On a quarter-on-quarter basis, Q2 GDP grew by 1.1 percent.
Breaking down the growth by industry:
Tertiary Industry (Services): Led the growth with a 5.5 percent year-on-year increase. This sector accounted for the largest share of total output.
Secondary Industry (Manufacturing, Mining, Utilities): Grew by 5.3 percent year-on-year. Value-added industrial output, a key gauge for this sector, increased by 6.4 percent in the first half of the year, with equipment manufacturing and high-tech manufacturing showing particularly rapid growth.
Primary Industry (Agriculture): Registered a 3.7 percent year-on-year increase. Summer grain production witnessed a stable harvest, and animal husbandry grew steadily.
Key Economic Indicators
Other notable economic indicators for the first half of 2025 include:
Industrial Output: Value-added industrial output grew by 6.4 percent compared to the same period last year.
Retail Sales: A key measure of consumer spending, retail sales increased by 5 percent year-on-year in the first half. However, monthly growth saw a slowdown, with June's retail sales growing by 4.8 percent, down from 6.4 percent in May, highlighting ongoing challenges in domestic demand.
Fixed-Asset Investment (FAI): Expenditures on infrastructure, property, machinery, and equipment grew by 2.8 percent compared to a year earlier, indicating a cautious approach to investment.
Foreign Trade: Exports in June exceeded expectations, rising by 5.8 percent in dollar terms, offsetting a decline in exports to the US with strong gains in shipments to Southeast Asia and Europe. Overall foreign trade was up 2.9 percent in the first half.
Employment: The surveyed urban jobless rate came in at 5 percent in June, holding stable with the previous month. The average urban surveyed unemployment rate in the first half of the year was 5.2 percent.
Disposable Income: Per capita disposable income reached 21,840 yuan during the January-June period, marking a 5.3 percent year-on-year increase in nominal terms.
Domestic Demand: Contributed 68.8 percent to GDP growth, with final consumption expenditure accounting for 52 percent, making it the primary driver of growth.
Challenges and Outlook
Despite the positive headline figures, analysts point to several lingering challenges, including:
A sluggish property market, with real estate development investment still showing declines.
Persistent deflationary trends, with consumer prices showing a 0.1% decline in the first half of 2025, signaling continued weakness in domestic demand.
The looming threat of escalating trade tensions with the United States, particularly with President Trump's ultimatum on Ukraine potentially leading to 100% tariffs on Russian-linked products and a potential August 12 deadline for a new trade deal with the US.
The National Bureau of Statistics noted that China's economy maintained steady recovery, backed by supportive macroeconomic policies, showcasing strong resilience and vitality. However, the official statement also highlighted that structural contradictions within the economy have not been fundamentally alleviated and that domestic demand remains "insufficient."
While the first-half performance keeps China on track to meet its full-year growth target, some experts caution that the second half of the year could "prove to be more challenging" given the complex international situation and domestic headwinds.
