China's economical policy 2025: A strategy for hard times – growth, innovation and risks

chiny24.com 3 days ago

Careful optimism in the second half of 2025

Entering the second half of 2025, the Chinese economy is at a turning point. After a solid start of the year, with GDP growth exceeding expectations, Beijing decision makers are betting on a strategy combining short-term support with long-term structural reforms. The aim is to accomplish an ambitious growth mark of around 5%, as announced in the “Government Work Report”. However, in the face of uneven recovery, persistent problems in the real property marketplace and increasing commercial tensions, the way to stableness is full of challenges.

Main economical policy priorities for the second half of 2025

The Chinese authorities, including the Political Office and key government agencies, have outlined respective key areas on which they will focus their efforts.

1. Stimulating home request and consumption

Unlocking the possible of the home marketplace remains an absolute priority. After home request was liable for 68.8% of GDP growth in the first half of the year, the government intends to proceed this trend. Actions shall include:

Support for disposable income: The policy aims to increase household income to stimulate spending.
Consumer goods exchange programmes: The government will allocate additional funds, including 69 billion yuan from ultra-long-term government bonds, to support the freight exchange program, which has already resulted in a sharp increase in sales of household appliances and RTV equipment.
Stability of asset markets: Actions to stabilise the real property and equity markets are seen as crucial to restoring consumer confidence.

2. improvement of “New Manufacturing Forces” and Technological Innovation

The modernisation of manufacture and the pursuit of technological self-sufficiency are the second pillar of the strategy. The government intensifys support for:

Strategic high-tech sectors: Investments in semiconductors, artificial intelligence (under the “AI+”), humanoid robotics and biotechnology are intended to supply China with a competitive advantage.
Integration of technology into industry: China Central Bank (PBOC) has committed to expanding credit support for tiny and medium-sized technology companies to accelerate the digital transformation of conventional sectors.

3. Flexible macroeconomic policy

Beijing maintains its readiness to intervene while maintaining flexibility in monetary and fiscal policies.

Monetary policy: Although there are no direct announcements of interest rate cuts, the authorities signal the maintenance of a “duly loose” policy to guarantee liquidity and support key sectors.
Fiscal policy: Accelerating the issuance of government bonds aims to finance infrastructure investments. The budget deficit has been set at around 4% of GDP, a sign of a proactive approach.

4. hazard management and structural reforms

In addition to stimulation, the government focuses on long-term reforms.

Real property market: Although the negative impact of the real property sector on the economy is weakening, it is inactive seen as a risk. In the first half of the year, more than 340 different policies were introduced to stabilise the market.
Creating a unified national market: Actions aim at removing regional barriers and harmonising rules to increase efficiency and reduce harmful price competition.
Maritime management: It has been identified as a fresh strategical area of growth, with an emphasis on technological innovation and environmental protection.

Challenges and prospects for the future

Despite government determination, analysts point to a number of risks. Commercial tensions, especially from the US, could negatively affect exports, which was 1 of the engines of growth in the first half of the year. External uncertainty and weak home request make it possible to scope the 5% growth target, although it will require considerable effort.

China's economical policy for the second half of 2025 is simply a complicated game of advanced stakes. The government is trying to balance the request for immediate support for growth with the request for deep structural reforms. The success of this strategy will not only find the accomplishment of the objectives for the current year, but besides the long-term trajectory of improvement of the second largest economy in the world.

Source:

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