Can China pass on-the-ground tests to ace its economic report card in 2025's second half?
Advertisement
Justin Li has been struggling to make ends meet since the onset of the pandemic. Since then, his monthly salary of 7,000 yuan (US$975) has not changed. And now, as his company undergoes a round of lay-offs, his dream of buying a home seems more distant than ever.
'With my current income, I don't dare take on a mortgage,' said Li, who relies on rental housing to provide a home for his wife, mother and one-year-old daughter. 'What if I lose my job one day? The job market is weak right now – there's too much unknown about the future.'
Last week, when Beijing delivered its midyear economic report, a
better-than-expected growth rate of 5.3 per cent in gross domestic product (GDP) showed how China's economy remained resilient in the face of various headwinds, including an unprecedented trade war with the United States.
While it is widely believed that Beijing will not allow its
'around 5 per cent' GDP growth target to be missed for the full year, risks lurking beneath the rosy headline figures – from sluggish consumer confidence and persistent deflationary pressure to a protracted property slump and trade uncertainty – are fuelling concerns of a second-half slowdown and prompting growing calls for stronger policy support.
Advertisement
'We need to distinguish between official economic data and how households and businesses actually feel,' said Chen Zhiwu, chair professor of finance at the University of Hong Kong.
'What people are feeling is a different world from the rosy data in the first half.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
AllAfrica
an hour ago
- AllAfrica
China-EU play nice despite widening cracks
Beijing has called on the European Union to increase diplomatic dialogue and improve trade relations after the bloc sanctioned two rural banks in northern China, accusing them of facilitating trade between China and Russia. Chinese President Xi Jinping met with European Commission President Ursula von der Leyen and European Council President Antonio Costa in Beijing on Thursday. 'The challenges facing Europe today do not come from China,' Xi told the two European leaders during their visit to China for the China-EU Summit. 'There are no fundamental conflicts of interest or geopolitical contradictions between China and Europe.' Xi said that China has always viewed and developed its relations with the EU from a strategic and long-term perspective, regarding Europe as an essential pole in a multipolar world, and has consistently supported European integration and the EU's strategic autonomy. He said that China and the European Union should uphold openness and cooperation, and properly manage their differences. 'History and reality have proven that mutual dependence is not a risk, and the integration of interests is not a threat,' he said. 'Improving competitiveness cannot rely on 'building walls and fortifications,' while 'decoupling' will only isolate oneself.' Xi also stated that the EU should practice multilateralism, help safeguard the international order of rules, and collaborate with China to address global challenges such as climate change. The Chinese leader made the conciliatory remarks amid rising political tensions between the EU and China over trade issues and the Ukraine war. In April, the EU imposed anti-subsidy tariffs on Chinese-imported aerial work platforms, ranging from 20.6% to 66.7%. Investigations found that Chinese manufacturers enjoyed an advantage in European markets, as they could lower prices after receiving government subsidies, low-interest financing, and support for raw materials. On June 20, it announced the exclusion of Chinese companies from the EU government's procurement of medical devices exceeding €5 million (approximately US$5.84 million). It said the measure aims to incentivize China to cease discriminating against EU firms and EU-made medical devices, and to treat EU companies with the same openness as the EU treats Chinese companies and products. China retaliated against the EU by restricting the purchase of European medical equipment and imposing tariffs on Brandy. However, China still wants to maintain a good relationship with the EU, which was also hit by the Trump administration's reciprocal tariffs in April. US President Donald Trump said the US would impose a 30% tariff on imports from Europe on August 1 if the two sides could not reach a trade deal. Media reports indicate that the US may agree to impose only a 15% tariff on European products, but a final agreement has not been reached. On July 16, China removed entry restrictions on Reinhard Buetikofer, the former EU lawmaker who was sanctioned by China in 2021 due to his comments on human rights issues of Uighurs in Xinjiang. Chinese commentators said China wanted to show a friendly gesture to Brussels ahead of the EU-China Summit, but the EU replied with sanctions on two Chinese banks. 'China removed entry restrictions on Buetikofer to pave the way for the 50th anniversary of the establishment of diplomatic relations between China and the EU,' a Fujian-based writer says in an article. 'The outside world described it as China's 'strategic gift package' for the EU.' 'However, the EU did not respond to this gift for three days and suddenly announced the 18th round of sanctions against Russia on July 19 and added over 10 Chinese companies to its Entity list,' he says. 'The sanctioned entities include two small Chinese banks, Heilongjiang Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank, which were accused of 'helping Russia circumvent sanctions'.' The writer notes that the annual transactions settled by the two banks were relatively small compared to Gazprom's daily exports. He says people in Heilongjiang use cash to trade Chinese electric heaters and Russian flour, but the EU was upset and blamed China for these legal activities. He says the EU wants a tough stance against China to please Washington and gain bargaining chips in the US-EU trade negotiations. A Yunnan-based columnist says it's unfair that the EU, which imported 18% more liquefied natural gas (LNG) from Russia last year, accused Chinese firms of having legal cooperation with Russian counterparts. 'The EU exposed the nature of its 'de-risking' strategy towards China in this incident,' he says. 'China has long been the EU's second-largest trading partner. However, with the rise of China in new energy, semiconductors, and other sectors, the EU's positioning of China has shifted from 'partner' to 'systemic rival', trying to use sanctions to slow China's growth.' He says the EU is like committing suicide as it sanctions Chinese firms, and at the same time asks China for rare earth elements. Reuters reported on April 22 that major Russian banks have set up a netting payments system called 'The China Track' to settle Russia's trade with China. The report, citing banking sources, stated that the new system, which has been in place for some time, was established by several sanctioned Russian banks and some intermediaries registered in countries that Russia considers friendly. It said each bank operates several verified payment agents, some of whom handle payments for exports, while others handle payments for imports. The minimum cost of the 'China Track' service, including commissions and exchange rate differences, is approximately 0.5% for exports and 1% for imports, compared to 2-4% outside the system and up to 12% at the height of the issue last year. The involved banks can complete the payment within two days. The service is now available in 11 Chinese provinces that have strong manufacturing sectors. According to an article published by the Heilongjiang-based Tianfusheng International Logistics Co on May 6, 'The China Track', a secret trade settlement channel between China and Russia, is now online. Tianfusheng said top Russian banks have jointly established this highly encrypted payment system to facilitate bilateral trade between Russia and China. It said this system can effectively bypass the SWIFT system and the West's monitoring, helping involved parties reduce sanction risks. In another article, Tianfusheng promoted its 'golden route' service, which guarantees that it can transport goods from China to 'anywhere in Russia' within eight days. The company said it has 150 trucks and an innovative tracking system. It claimed that its trucks can reach their final destinations directly without transit and complete customs clearance smoothly under the Transports Internationaux Routiers (TIR), a global customs transit system overseen by the United Nations Economic Commission for Europe (UNECE). Read: China's patience wears thin with EU over medical device row
South China Morning Post
9 hours ago
- South China Morning Post
China, EU must show mutual respect in more complicated world
The 25th China-European Union summit fell in the 50th anniversary year of diplomatic relations. The double milestone set the stage for guiding strained ties between the two trading giants towards less troubled waters. Economic tensions compounded by the Ukraine war could not be mended overnight. But President Xi Jinping set the tone and pointed the way forward ahead of the summit chaired by Premier Li Qiang, European Commission President Ursula von der Leyen and European Council President Antonio Costa. In a meeting with the European leaders, Xi described China and the EU as 'two big guys' in the world. That is a compelling reminder the world is facing huge complexity, and the more complicated it is, the more imperative it is for China and Europe to show mutual respect, find common ground and keep open minds in the search for win-win outcomes to economic and security concerns. Xi said that amid accelerating transformation and an international landscape fraught with turbulence, China and Europe must demonstrate vision and responsibility by making the right strategic choices 'that meet people's expectations and stand the test of history'. The strategic situation is fluid, with Europe facing steep tariffs imposed by US President Donald Trump. Xi said the two sides should reinforce their partnership as a cornerstone in bilateral ties, adding that the challenges Europe is facing 'were not from China'. Beijing hoped Europe would likewise respect its chosen development path and political system, acknowledge its core interests and major concerns.
South China Morning Post
16 hours ago
- South China Morning Post
China trade talks could include TikTok, Lutnick says
TikTok may come up in trade talks with China next week , but if Beijing does not approve a divestment deal for Chinese owner ByteDance, the app will soon go dark in the United States, US Commerce Secretary Howard Lutnick said on Thursday. US President Donald Trump's administration will allow TikTok to remain in the US 'if it's in American control, and … China can have a little piece or ByteDance, the current owner, can keep a little piece', Lutnick said, speaking on CNBC. 'Americans will have control. Americans will own the technology, and Americans will control the algorithm. That's something Donald Trump is willing to do. If that deal gets approved then by the Chinese, then that deal will happen,' he said. 'If they don't approve it, then TikTok is going to go dark, and those decisions are coming very soon.' Asked whether an agreement over TikTok is part of current trade negotiations, Lutnick said 'yes and no'. 'It's not really part of the trade talks, but you can't really go meet somebody and not bring up the topics that are relevant,' he said. 'So … it's not officially part of it, but unofficially? Of course.' ByteDance is under pressure to divest the short-video app by September 17 or face a ban in the US. Last year, then-US President Joe Biden signed a sale-or-ban law, requiring that a 'foreign adversary' no longer control the app, defined as a 20 per cent stake, over national security concerns. Despite an original January deadline, Trump has repeatedly delayed enforcement of the law. The original deadline as set in law was January 19, with allowance for a one-time 90-day extension if progress towards a sale was evident. Trump had extended that deadline his first day in office via executive order, days after a call with Chinese President Xi Jinping during which TikTok was discussed. He has since extended it twice more.
