Proactive economic measures instill 2nd half vitality

Editor's Note: The macroeconomic data for the first half of 2025, which was released recently, shows that the country's economy has forged ahead under pressure, maintaining a steady and improving momentum. The Qiushi Journal recently interviewed Guo Chunli, vice-president of the Chinese Academy of Macroeconomic Research; Chen Yanbin, director of Chinese Academy of Social Sciences' Institute of Industrial Economics; and Chen Binkai, vice-president of the Central University of Finance and Economics, to analyze China's economic performance in the first half of 2025 and assess the outlook for the second half. Below are excerpts from the interview. The views don't necessarily represent those of China Daily.

China's GDP growth rose to 5.3 percent in the first half of 2025, with the economy undergoing a transformation from factor-driven growth to innovation-driven development, and from a focus on speed and scale to one centered on quality and efficiency. The economy is likely to maintain its momentum in the second half of the year. But the challenges that lie ahead should not be underestimated.

China's consumer market is showing increased vitality, driven by a series of policies aimed at expanding domestic demand and boosting consumption. The first half saw robust sales of consumer products such as home appliances and smartphones. However, this also increased the base for consumption in the first half of the year and maintaining the same pace of growth in the second half might face pressure. Also, the slowdown in the growth of private investment may weigh on investment momentum in the second half of the year.

To address these challenges and ensure sound economic performance in the coming months, it is essential to strengthen macroeconomic policy measures and enhance countercyclical adjustments.

Efforts should be made to implement the policy measures under the special campaign to boost consumption, promote income growth and reduce the burden on the low- and middle-income groups as well as significantly enhance the consumption capacity of both urban and rural residents. At the same time, fiscal and financial coordination should be strengthened to support major national strategies and build up security capacity in key areas. The focus should be on stimulating private investment and driving broader social investment.

As for the impact of external influences, China has not only effectively responded to major challenges such as the additional tariffs imposed by the United States, but has continuously turned the conditions to its own advantage. Foreign trade grew 2.9 percent in the first half of the year despite the headwinds, becoming an important driver of China's economic growth. This also highlights the resilience of the Chinese economy.

But the government needs to factor in the future impact of the US tariff hikes. The better-than-expected performance in the first half was partly driven by front-loaded exports and reexport trade ahead of actual tariff increases. The negative impact of the US move on the Chinese economy, particularly exports, is expected to show up in the second half of the year.

As a result, China's export growth faces a downside risk in the coming months. The effective US tariff rate on Chinese goods remains high, and more measures are being introduced to curb reexport trade by Chinese firms through the Association of Southeast Asian Nations and other economies, which could pose more challenges for China's trade in the second half of 2025.

Hence, the government must take a more proactive approach to stabilize foreign trade through diversified channels, expand the multilateral trade space and enhance China's influence and leadership in shaping international economic and trade rules.

Tailored support measures for enterprises and industries should also be intensified to help export-oriented firms mitigate risks. Continued encouragement and support for the development of trade in services are equally essential, along with promoting comprehensive pilot programs for further opening up the services sector and enhancing the competitiveness of high-end services.