Multiple govt agencies outline economic priorities for H2

As China's economy has successfully maintained its resilience and high-quality development in the first half of 2025 thanks to proactive macroeconomic policies, multiple Chinese government agencies have held a succession of intensive meetings, where they outlined their priorities for economic work for the second half, to ensure that the world's second-largest economy can achieve its annual GDP target of around 5 percent, enabling it to drive global economic growth.

As a latest figure indicating the country's economic performance in the first half of 2025, the total value of social logistics rose 5.6 percent year-on-year to reach 171.3 trillion yuan ($23.87 trillion), demonstrating a steady development trend as the country's domestic demand potential continues to be unleashed and the structure of demand improves, data from the China Federation of Logistics and Purchasing (CFLP) showed on Tuesday.

Looking ahead to the second half, as policies continue to produce effects, logistics in areas including manufacturing transformation and upgrading, green development and consumption are expected to maintain positive momentum, the CFLP said.

Despite rising challenges and external uncertainties, China achieved steady economic growth in the first half of the year. The country's GDP grew 5.3 percent year-on-year during the period, data from the National Bureau of Statistics showed. Retail sales of consumer goods expanded 5 percent in the first half, with domestic demand contributing 68.8 percent to GDP growth.

This year also marks the conclusion of the 14th Five-Year Plan period (2021-2025). During the past five years, China has clocked up a series of landmark achievements, including a resilient economy, solid steps in green transition and unwavering opening up, according to the Xinhua News Agency.

"China's economy in the first six months was distinguished by enhanced industrial resilience, stable domestic demand and improved foreign trade driven by policy coordination, innovation-driven growth and market entity vitality," Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Tuesday.

Wang said that the economic performance has laid a solid foundation to achieve the country's annual GDP target and to draw a successful conclusion to the 14th Five-Year Plan, noting that the new development opportunities and challenges emerging during economic development will also provide direction for the focus of Chinese government's work in the rest of the year as well as the 15th Five-Year Plan (2026-2030).

Window to observe H2 economy

Multiple government agencies have worked to outline their priorities for economic task for the rest of the year.

The Ministry of Finance told a press conference on Friday that the government will complete the issuance of 1.3 trillion yuan in ultra-long special treasury bonds as planned, ensuring solid funding for major national projects and programs, as well as the large-scale renewal of equipment and the trade-in of consumer goods.

The ministry stressed accelerating the introduction of incremental policy measures to guide localities to improve the consumption environment and optimize consumption supply.

"Expanding domestic demand remains the top priority among all policies this year, and in this regard fiscal and monetary policies will be reinforced to further unleash the potential of the country's spending potential," Li Changan, a professor at the Academy of China Open Economy Studies at the University of International Business and Economics, told the Global Times on Tuesday.

On Sunday and Monday, the State Administration for Market Regulation convened a meeting in Beijing on market regulation development. The meeting emphasized the need to accurately grasp the major tasks for advancing high-quality market regulation during the 15th Five-Year Plan. It outlined key priorities, including strengthening the domestic market, enhancing product quality, improving the national standards system and optimizing normalized supervision of the platform economy.

The 2025 government work report released in March vowed to "take comprehensive steps to address rat race competition." The focus was cemented at a meeting of the Central Commission for Financial and Economic Affairs on July 1, as policymakers pledged to tackle disorderly low-price competition, guide enterprises to improve product quality, and facilitate the orderly exit of outdated production capacities.

Unlike the previous supply-side structural reform, this round of "anti-involution" efforts, under the context of building a unified national market, aims to strengthen industry governance and promote the orderly exit of outdated production capacity with a market-oriented approach and rule-of-law principles, while emphasizing fair competition and market order, Li said.

After its mid-year work meeting, the China Securities Regulatory Commission, the top securities regulator, vowed on Friday to take all necessary steps to consolidate the positive momentum in the capital market. "We will make all-out efforts to consolidate the market's trend of stabilization and improvement," the commission said in a statement on its website, adding that it will further improve market stabilization mechanisms and enhance the effectiveness and foresight of market monitoring and risk response, while intensifying efforts to guide expectations.

Bullish prospects

The better-than-expected GDP figure as well as a raft of policies announced by Chinese authorities have made foreign financial institutions increasingly bullish concerning China's economic prospects, with major foreign financial institutions, including UBS and Goldman Sachs revising their 2025 full-year GDP growth forecasts for China upward.

The International Monetary Fund (IMF) on Tuesday lifted its growth forecast for China in 2025 to 4.8 percent, up 0.8 percentage point compared to its forecast in April, according to an update to its World Economic Outlook (WEO).

"This revision reflects stronger-than-expected activity in the first half of 2025 and the significant reduction in US-China tariffs. The GDP outturn in the first quarter of 2025 alone implies a mechanical upgrade to the growth rate for the year of 0.6 percentage point. A recovery in inventory accumulation is expected to partly offset payback from front-loading in the second half of 2025," according to the IMF.

[China's economic] growth in 2026 is also revised upward by 0.2 percentage point to 4.2 percent, it said.

Swiss global wealth manager UBS upgraded its full-year GDP growth forecast for China to 4.7 percent, according to a note sent to the Global Times.

Yu Xiangrong, chief economist at Citigroup China, said in a note sent to the Global Times that "We revised our forecast for China's GDP growth this year up to 5 percent in mid-June, believing that the annual growth target can be achieved. The country's GDP figure in the first half provides a more solid foundation for the achievement of the annual goal."

While continuing to consolidate the momentum of actual growth, we believe that there is both necessity and capability to recover nominal GDP growth. If China's growth remains resilient and prices improve, the attractiveness of Chinese assets will further increase, Yu said.

Goldman Sachs said in a research paper recently that "our 2025/26 full-year real GDP growth forecasts have been mechanically raised to 4.7 percent."