As China's economy grows at a stronger-than-expected pace in 2025, analysts are urging policymakers to expand fiscal stimulus measures to sustain momentum. The call comes after first-half GDP growth of 5.3%, driven by robust industrial output and resilient exports, according to a report by the China Finance 40 Forum (CF40).
Industrial and Export Resilience
Industrial production surged in the first half, outpacing overall GDP growth, while exports climbed 6.2% in Q2 despite ongoing U.S. trade tensions. Government-backed 'trade-in' programs also boosted domestic consumption, with retail sales accelerating steadily.
Balancing Fiscal Priorities
While debt issuance reached 6.3 trillion yuan ($880 billion) in early 2025, experts warn of fiscal constraints. Zhang Bin, a CF40 analyst, proposed four measures: issuing 2.3 trillion yuan in bonds, investing in urban renewal projects, cutting interest rates, and stabilizing the property market through demand- and supply-side reforms.
Path Forward
Policymakers face pressure to prioritize domestic demand while navigating global trade uncertainties. Zhang emphasized that targeted fiscal support could stabilize growth and mitigate risks in key sectors like manufacturing and real estate.
