China's economy grew 5.3% year-on-year in the first half of 2025, outperforming expectations and triggering upward revisions to annual growth forecasts from major international financial institutions. The robust performance signals strengthening momentum across manufacturing, consumption, and trade sectors.
Key drivers included a 6.4% increase in industrial output from major enterprises, with high-tech manufacturing surging 9.5%. Retail sales climbed 5%, accelerating from Q1 figures, while exports expanded 7.2% amid recovering global demand.
Morgan Stanley revised its 2025 GDP forecast from 4.5% to 4.8%, UBS adjusted from 4.0% to 4.7%, and Goldman Sachs increased from 4.6% to 4.7%. ANZ made the most bullish adjustment, raising its projection from 4.2% to 5.1%. Analysts cited effective government trade policies, corporate earnings growth, and tourism-driven consumption as key factors.
While acknowledging potential export headwinds, institutions noted China's proactive fiscal measures could sustain growth. Citigroup upgraded Chinese consumer stocks to "overweight," while Invesco's Asia ex-Japan CEO Martin Franc highlighted growing investor interest in China's tech innovation leadership.
"Investors recognize China's unique opportunities in building next-generation technology ecosystems," Franc observed, emphasizing shifting market sentiment toward Chinese equities.
