SCIO briefing on China's economic performance in April 2025

CNBC:

I have two questions. In April, foreign trade enterprises faced a rapid increase in tariffs and the suspension of orders. What impact did this have on the overall economic operation? And what impact did it have on employment? Also, how is the recent real estate situation in third- and fourth-tier cities different from that in first- and second-tier cities? What is your outlook? Thank you.

Fu Linghui:

Thank you for your questions. From the relevant data released earlier, it can be seen that China's economic operation remained generally stable in April. In April, as external shocks intensified, some foreign trade companies faced increased production and operation pressures. However, from the perspective of the overall economic operation, the main production and demand indicators maintained steady and relatively fast growth in April, and the employment situation remained generally stable. New growth drivers continue to grow, the green transformation is deepening, and the new and positive trend is sustained. There are many questions regarding this situation. Why can the Chinese economy maintain such steady growth despite external shocks? In the face of external shocks, China's economy has been able to withstand pressure and grow steadily. This can not only be attributed to its solid economic foundation, multiple advantages, strong resilience and great potential, but also to the coordinated macro policies and the proactive responses from all sectors. Moreover, it is the result of China's unwavering commitment to promoting high-quality development and accelerating the formation of a new development pattern.

First, the economic foundation is stable, there is ample space for development, and the capability to resist pressure is strong. "The Chinese economy is not a pond but an ocean." China has a super-large economy, ranking second in the world in terms of economic aggregate, and has maintained the world's largest manufacturing scale for 15 consecutive years. With a solid material and technological foundation, a complete industrial system and strong supporting capabilities, the foundation for economic development is solid. At the same time, China has huge market and broad space for development. With over 1.4 billion and a consumer market scale ranking among the top in the world, China has significant potential for improvements. These facts determine China's strong capabilities to cope with various risks and challenges.

Second, steady progress has been made in pursuing high-quality development, which provides an important guarantee for responding to changes with proactive steps. Since the 18th CPC National Congress, the CPC Central Committee has taken a comprehensive view, accurately perceived the major domestic and international development trends, made significant decisions and deployments to promote high-quality development, unwaveringly promoted economic structure adjustment and renewal of driving forces, developed new quality productive forces according to local conditions, to effectively pursue higher-quality economic growth and appropriately increase economic output. At the same time, in the face of the increasingly complex and severe external environment, following the decisions and deployments of the CPC Central Committee, we accelerated the construction of a new pattern of development, enhanced the resilience and security industrial and supply chains, and firmly grasped the initiative in development. These steps have provided important guarantees for China's economy to proactively respond to severe changes to the external environment.

Third, the intensified and effective macro policies have played a pivotal role in stabilizing the economy. On Sept. 26 last year, the meeting of the Political Bureau of the CPC Central Committee decisively deployed a package of incremental policies, effectively boosted social confidence, and significantly promoted economic recovery. This year, macro policies have become more proactive and effective. Both existing and new policies continue to exert force, significantly expanding demand, promoting production, supporting innovation and stabilizing expectations, playing a crucial role in maintaining stable economic operation. From January to April, the growth rates of total retail sales of consumer goods and the service industry production index both accelerated by 0.1 percentage point compared to the first three months, and the cumulative growth rates of fixed asset investment and value added of industries above designated size remained basically stable. In April, the transaction volume of the Shanghai and Shenzhen stock exchanges increased by more than 30%. In the face of challenges from external shocks, in late April, the Political Bureau of the CPC Central Committee held a meeting to make arrangements for the economic work, effectively enhancing confidence in social development.

Fourth, we have actively responded to changes against all odd and provided strong support for the stable operation of the economy. In the face of external shocks, all regions and departments resolutely implemented the decisions and deployments of the CPC Central Committee and the State Council, made full use of fiscal and monetary policies, accelerated the issuance and use of local government special bonds and ultra-long-term special national bonds, further reduced reserve requirements and interest rates, promoted the early implementation key tasks and achieved real results, assisting the stable operation of the economy. For enterprises significantly affected by tariffs, the government has promptly increased efforts to assist and alleviate difficulties, effectively consolidating the micro-foundation of economic operations. In the face of the impact of increased tariffs by the United States, many foreign trade enterprises actively responded and took the initiative to expand diversified markets, promoting stable growth in foreign trade. From January to April, the growth rate of China's total imports and exports of goods accelerated by 1.1 percentage points compared to the first quarter.

All this demonstrates that China boasts a solid economic foundation, effective development, institutional advantages, strong policy support and a vibrant market. China is fully equipped and confident in responding to various risks and challenges. Thank you.