SCIO briefing on China's economic performance in August 2025

Yicai:

Private investment growth continued to decline from January to August, reflecting persistently insufficient momentum. What is your assessment of this situation? What are the prospects for private investment development moving forward? Thank you.

Fu Linghui:

Thank you for your questions. Private investment is a crucial component of China's fixed-asset investment and a key force in driving investment quality and efficiency improvements. Since the beginning of this year, private investment has slowed somewhat due to changes in the international environment, real estate market adjustments and other factors. However, excluding real estate development investment, private project investment has remained basically stable. As a series of policy measures to support private economic development and stimulate private investment are implemented, the business environment for private enterprises continues to improve. This will help expand development space for private investment and support private investment growth. Based on the situation in the first eight months, private investment performance has exhibited the following main characteristics:

First, project investment maintained steady growth. Real estate development investment accounts for a relatively large share of private investment. Dragged down by the decline in real estate development investment, private fixed-asset investment fell 2.3% year on year from January to August. During this period, private real estate development investment declined 16.7%, pulling down overall private investment growth by 4.5 percentage points. Excluding real estate development investment, private project investment grew 3% year on year from January to August, faster than overall investment growth.

Second, manufacturing investment showed strong growth momentum. The policy effects of large-scale equipment renewal continued to unfold, while economic transformation and upgrading advanced steadily, driving sustained growth in private manufacturing investment and increasing its share of total investment. From January to August, private manufacturing investment increased 4.2% year on year, 1.2 percentage points faster than private project investment overall. It accounted for 40.6% of total private investment, up 1.7 and 2.6 percentage points from the first half of the year and the same period last year, respectively. Among the 31 major manufacturing industry categories, 16 sectors achieved double-digit growth in private investment. Among them, private investment in automobile manufacturing grew 22.6% and private investment in railway, shipbuilding, aerospace, and other transport equipment manufacturing increased 16.2%.

Third, innovation investment intensity increased. Private enterprises are China's main force driving innovation and development. Facing changes in market conditions, private enterprises have continued to increase innovation investment and actively expanded into emerging and future industries. Private investment in related sectors has grown relatively rapidly, which has also strongly promoted industrial development toward new and positive directions. From January to August, private investment in information services within high-tech industries grew 26.7% year on year, while private investment in professional technical services rose 17.6%.

Fourth, the investment development space is gradually expanding. With the gradual implementation of the reform measures adopted at the third plenary session of the 20th CPC Central Committee, long-term mechanisms for private enterprise participation in major national projects are being accelerated and improved. Private capital involvement in key national infrastructure projects — including railways, energy and water conservancy — is being steadily advanced, expanding growth opportunities for private investment. From January to August, private infrastructure investment increased 7.5% year on year, 5.5 percentage points faster than total infrastructure investment. Private investment in the production and supply of electricity, heat, gas and water rose 23.5%. Meanwhile, private investment in consumer service sectors is also increasing. From January to August, private investment in accommodation and catering, and culture, sports and entertainment grew 17% and 7%, respectively.

Despite profound and complex changes in the domestic and international environment, operational difficulties facing some private enterprises and certain pressures on private investment, looking ahead, China's economy has broad development potential. China's economic landscape offers ample space for growth, and strong foundations exist to support the expansion of private investment.

First, high-quality development is being steadily promoted and there is room for growth in private investment. Private enterprises are the backbone of innovative development and an important driving force for high-quality development. As China steadily promotes high-quality development, private enterprises are vigorously promoting the development of green industries such as new energy vehicles, photovoltaics, and lithium batteries. They are actively laying out future industries such as artificial intelligence and embodied robots, which will further expand the development space for private investment. Second, private enterprises are resilient and dynamic, providing a foundation for the growth of private investment. Many private enterprises are bold and competitive, with a keen sense of market demand and technological trends, responding quickly with high flexibility and adaptability. Since the beginning of this year, in the face of external shocks, many private enterprises have risen to the challenge. Adapted flexibility has actively expanded markets, and stabilized production, demonstrating strong development resilience and innovative vitality. Third, strong policy support ensures the growth of private investment. The "Private Economy Promotion Law" has been officially implemented, sending a strong signal to promote the development of the private economy. All regions and departments are actively improving the system and mechanism for government investment to drive social investment. The market access environment for private investment has been continuously optimized, and financial and resource support has been steadily strengthened, all of which are conducive to encouraging private investment and promoting its stable development. Thank you.

Jia Huili:

Due to time constraints, we will take one last question.