SCIO briefing on China's economic performance in April 2025

Zhonghongwang.com:

Although the PPI declined year on year in April, we are seeing expanding macroeconomic policies to boost consumption, faster growth in high-tech industries, increasing demand in some sectors and positive price changes in certain areas. What are your thoughts on this situation? How do you assess and analyze the future trend of industrial product prices? Thank you.

Fu Linghui:

Thank you for your questions. In April, the year-on-year decline in the PPI widened, mainly due to falling international energy prices and price declines in some domestic industries. In April, the PPI fell 2.7% year on year, widening by 0.2 percentage point from the previous month. Although the PPI continued to decline year on year, prices in some sectors have improved thanks to intensified and effective implementation of macroeconomic policies, recovering market demand, and the rapid growth of new economic drivers.

First, demand in the high-end manufacturing sector has increased. Economic restructuring is advancing steadily, demand for high-tech products is expanding, and prices in related industries have risen to some extent. In April, prices for manufacturing wearable smart devices rose 3%, while aircraft manufacturing prices increased 1.3%. Driven by advances in intelligence and digitalization, manufacturing prices for some digital products are also rising. In April, prices for integrated circuit packaging and testing climbed 2.7%, while server prices rose 1%.

Second, the impact of policies aimed at boosting domestic demand is becoming stronger. The "two new" policies, which refer to large-scale equipment upgrades and consumer goods trade-ins, are delivering positive results. Demand for some consumer goods and equipment manufacturing products is expanding, driving up prices in related industries and products. In April, the year-on-year price declines for household washing machines and NEVs narrowed by 0.3 and 0.2 percentage points, respectively, compared with the previous month. The year-on-year price declines for specialized equipment manufacturing for electrical machinery and machinery used in farming, forestry, livestock and fishing narrowed by 0.7 and 0.2 percentage points, respectively.

Third, supply and demand conditions in some traditional industries have improved. In April, year-on-year price declines in the ferrous metal smelting and rolling industry and the nonmetallic mineral products industry narrowed by 1.4 and 1 percentage points, respectively, compared to the previous month. These developments demonstrate that by fostering new quality productive forces and implementing the "two new" policies and the policies aimed at fulfilling major national strategies and enhancing security capabilities in key areas, we have improved the supply-demand dynamics of industrial products.

However, it is important to recognize that the PPI remains on a downward trend, and prices in some industries have fallen significantly, affecting industrial enterprises' efforts to increase profits. In response, it is necessary to continue expanding domestic demand, vigorously promote technological and industrial innovation, optimize and adjust production capacity and structure, and achieve a high-level dynamic balance between supply and demand. These efforts will help return industrial product prices to a reasonable range, improve business operations, boost development confidence, and promote sustained healthy economic growth. Thank you.

Zhou Jianshe:

I see that two more journalists have their hands raised.