SCIO briefing on China's economic performance in August 2025

Reuters:

Based on the July and August data, how do you assess the economic development trends for the third quarter? Also, can we see any specific effects of recent anti-involution policies on prices? Thank you.

Fu Linghui:

Thank you for your questions. Everyone is paying close attention to the economic performance in the third quarter. Judging from the July and August data, a series of macroeconomic policies have continued to take effect. The industrial and services sectors have maintained rapid growth, consumption and import-export volumes continue to expand, employment and prices remain broadly stable, new quality productive forces are being nurtured and strengthened, and the national economy has sustained steady progress with positive momentum.

Looking at production, industry and services have maintained relatively rapid growth. Industrial output above designated size grew 5.7% and 5.2% year on year in July and August, respectively, continuing to maintain relatively rapid growth above 5%. The services production index grew 5.8% and 5.6% in July and August, respectively, with growth rates faster than industrial growth.

Looking at demand, market sales and import-export volumes continue to expand. Total retail sales of consumer goods grew 3.7% and 3.4% year on year in July and August, respectively. From January to August, retail sales of services grew 5.1%, continuing to outpace goods retail growth. Goods exports rose 8% and 4.8% year on year in July and August, respectively, with volumes continuing to expand.

Looking at employment, the unemployment rate has remained generally stable. In July and August, the nationwide surveyed urban unemployment rate experienced a seasonal increase but remained flat compared to the same period last year. The surveyed urban unemployment rate for the 30-59 age group was 3.9% in both months, remaining stable.

Looking at prices, core CPI has continued to rebound. Core CPI rose 0.8% and 0.9% year on year in July and August, respectively, with the increase expanding for four consecutive months.

Looking at development momentum, new quality productive forces have continued to be nurtured and strengthened. Value-added output of high-tech manufacturing industries above designated size grew 9.3% year on year in both July and August, significantly faster than the overall growth of industrial output above designated size. Industrial robot and new energy vehicle production have continued to maintain double-digit growth. Digital and green transformations continue to deepen, with digital product manufacturing and online retail sales of physical goods maintaining strong growth momentum. Meanwhile, high-level opening up has continued to advance, with trade diversification showing clear results and imports and exports with Belt and Road partner countries maintaining relatively rapid growth. Efforts to ensure people's livelihoods have remained strong and effective, with continuous increases in investment directed toward public welfare areas. Looking at the overall picture, with macroeconomic policies continuing to take effect, the economy is expected to maintain steady and progressive development in the third quarter.

Regarding the impact of anti-involution policies on prices that you mentioned. Recently, relevant departments have actively promoted industry self-discipline and advanced capacity management in key sectors, with effects gradually becoming apparent. In August, year-on-year declines in ex-factory prices narrowed for coal, steel, new energy vehicles, photovoltaic products and other industries. This reduced their downward pull on the PPI compared to the previous month, helping steer price movements back toward a reasonable range. Thank you.