China’s Economy in Early 2025: Retail and Industrial Growth Surpasses Expectations

In early 2025, China’s economy showed improvement with retail sales and industrial output exceeding expectations, while the real estate sector struggled. The government introduced measures to bolster consumption, including a RMB 300 billion stimulus, amid mixed economic indicators and ongoing growth challenges.

Data from China’s statistics bureau indicate that the economy improved in the first two months of 2025, with retail sales and industrial output surpassing expectations. However, the property sector remains a drag on growth, with real estate investment falling nearly 10 percent. Despite slowing price declines, the market has yet to stabilize. Meanwhile, the government has introduced new measures to boost consumption, including financial incentives for trade-ins and expanded social benefits. We examine the latest economic indicators and what they mean for China’s recovery in 2025.

China’s economy began the year on a stable note, with several key indicators reflecting a positive trajectory. The National Bureau of Statistics (NBS) released data on March 17, highlighting a smooth start to the year, with production and demand gradually picking up.

Speaking at a press briefing, the NBS spokesperson Liu Aihua emphasized that “the economy has started smoothly, and the trend is moving in a positive direction.” The data for the first two months of 2025 reveals a mixed but encouraging performance across various sectors, including industrial output, services, and foreign trade. Below, we look at the latest economic indicators to understand the performance and outlook of China’s economy in early 2025.

The manufacturing industry grew by 6.9 percent year-on-year, supported by strong gains in high-tech and equipment manufacturing. The value-added of equipment manufacturing increased by 10.6 percent, outpacing the overall industrial sector and accelerating by 2.9 percentage points compared to the same period in 2024. Similarly, high-tech manufacturing expanded by 9.1 percent, 0.2 percentage points faster than the previous year.

Despite these areas of strength, the slower overall growth rate reflects weaker global trade conditions and uncertainties in domestic consumption. Policymakers have responded by prioritizing domestic demand expansion, announcing a RMB 300 billion (US$60 billion) stimulus package for consumer goods trade-ins, including electric vehicles and home appliances. In terms of ownership, private enterprises grew by 6.7 percent, outpacing state-owned enterprises, which saw a 3.7 percent increase.

Foreign-funded firms, including those from Hong Kong, Macao, and Taiwan, expanded by 3.2 percent, reflecting the impact of heightened trade tensions on foreign investment.

Specific industrial products continued to experience robust demand, with new energy vehicle (NEV) production surging by 47.7 percent year-on-year. Meanwhile, 3D printing devices and industrial robots saw increases of 30.2 percent and 27.0 percent, respectively, highlighting ongoing shifts toward technology-driven industries.

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