SCIO briefing on China's economic performance in July 2025

CCTV:

Since the beginning of this year, China's national economy has withstood pressure and overcome difficulties, demonstrating strong resilience and vitality. How do you evaluate the economic performance in July? Thank you.

Fu Linghui:

Thank you for your question. In July, the international environment was complex and severe, while the impact of trade protectionism and unilateralism continued. Some regions in China experienced extreme weather events, such as heatwaves, rainstorms and floods, which caused short-term shocks to the economic performance. In the face of the complex situation, under the strong leadership of the CPC Central Committee, all regions and departments have taken actions, overcome difficulties, accelerated the implementation of more proactive macro policies, and advanced the construction of a unified domestic market. Production and demand continued to grow, employment and prices remained generally stable, new drivers of growth expanded, and the economy maintained a stable performance with steady progress. The main features are as follows.

First, production supply maintained stable growth. Industrial production grew quickly, with the value added of industrial enterprises above designated size growing by 5.7% year on year in July, maintaining rapid growth. Driven by industrial upgrades and development, the equipment manufacturing industry saw good development, strongly supporting industrial growth. In July, the value added of equipment manufacturing enterprises above designated size increased by 8.4% year on year, significantly faster than the overall growth of industrial enterprises above designated size. The service sector maintained strong growth in July, with its production index increasing by 5.8% year on year. Increased summer travel boosted rapid growth in related services. In July, the production index of transportation, warehousing and postal services increased by 5.5% year on year, accelerating by 0.4 percentage point from the previous month.

Second, consumption and investment have continued to grow. Policies to boost consumption have shown to be effective. Cultural, sports and entertainment demand has increased, and both goods sales and service consumption have continued to grow. In July, the total retail sales of consumer goods increased by 3.7% year on year, with retail sales of goods growing by 4%. In the first seven months, the retail sales of services grew by 5.2% year on year, demonstrating overall stable growth. Affected by factors such as high temperatures and heavy rains in some regions and a slowdown in project construction, the growth rate of investment declined, but the scale of investment continued to expand. From January to July, fixed-asset investment rose by 1.6% year on year. The policy of large-scale equipment renewal has continued to take effect, further supporting investment growth. From January to July, investment in purchases of equipment, tools and instruments increased by 15.2%, maintaining rapid growth.

Third, foreign trade has demonstrated resilience. In the face of a complex and volatile international environment, various regions and departments have increased their efforts to stabilize foreign trade. Many foreign trade enterprises have taken proactive steps to expand foreign trade opportunities. Imports and exports of goods have continued to grow. In July, the total value of goods imported and exported increased by 6.7% year on year, up 1.5 percentage points from the previous month. The diversification of China's foreign trade has continued to advance. From January to July, China's imports and exports with Belt and Road partner countries increased by 5.5% year on year, continuing to outpace the overall growth rate of foreign trade.

Fourth, employment and prices have remained stable overall. Affected by factors such as the graduation season, the national surveyed urban unemployment rate showed a seasonal rise. In July, the national surveyed urban unemployment rate was 5.2%, unchanged from the same period last year, while overall employment remained stable. Employment of key groups remained basically stable. In July, the surveyed urban unemployment rate of the population with non-local agricultural household registration was 4.9%, lower than the national surveyed urban unemployment rate. Affected by the decline in food prices, the consumer price index (CPI) turned from a year-on-year rise to a flat reading in July, compared with a 0.1% increase in the previous month. The core CPI, excluding food and energy, rose by 0.8% year on year. The growth rate expanded by 0.1 percentage point from the previous month, marking the third consecutive month for growth rate expansion and indicating positive changes.

Fifth, new growth drivers have grown steadily. High-tech manufacturing has developed positively. In July, the added value of high-tech manufacturing above designated size increased by 9.3% year on year, continuing to outpace the growth rate of industrial enterprises above designated size. The modern service industry has maintained rapid growth, with the index of service production (ISP) for information transmission, software and IT services, and for leasing and business services growing by 11.9% and 8%, respectively. Smart and green new industries have grown rapidly. In July, the added value of integrated circuit manufacturing increased by 26.9% year on year, and the production of new energy vehicles increased by 17.1%. Online consumption has developed rapidly. From January to July, the online retail sales of physical goods increased by 6.3% year on year, which was 0.3 percentage point higher than the first six months.

It should also be noted that there are many external instabilities and uncertainties; domestic supply exceeds demand; some structural issues are still emerging; and the foundation for the economy's rebound and improvement needs to be consolidated. In the next stage, we will fully implement the decisions and arrangements of the CPC Central Committee, maintain policy continuity and stability, and enhance flexibility and foresight. We will focus on stabilizing employment, businesses, markets and expectations, vigorously promote the dual circulation of domestic and international markets, and promote steady and healthy economic development. Thank you.