China is gearing up to enhance its economic strategies in late 2025 with a concerted focus on stimulating domestic demand. Central to this initiative is the aim to achieve sustainable growth, foster innovation, and create openings in the global market.

Amid external pressures and challenges confronting the economy this year, a recent meeting of the Communist Party of China (CPC) Central Committee Political Bureau underscored the priority of seeking progress while ensuring stability. Key focuses include stabilizing employment, businesses, markets, and fostering positive expectations.

The meeting acted as a proactive response to economic headwinds, providing essential insights to guarantee stable economic performance throughout 2025, which marks the conclusion of the 14th Five-Year Plan (2021-25). It is anticipated to also lay the groundwork for the ensuing 15th Five-Year Plan (2026-30), signaling a critical juncture.

China's macro policy approach in the first half of 2025 emphasized early action rather than waiting. This resulted in an impressive GDP growth rate of 5.3 percent year-on-year for this period, reinforced by a series of coordinated measures that set a strong foundation for achieving the full-year growth target.

Recently, the International Monetary Fund (IMF) upgraded its forecast for China's 2025 GDP growth to 4.8 percent, representing an increase of 0.8 percentage points from its earlier projections. Such significant upward revisions are notably uncommon, highlighting a positive outlook among major international institutions regarding China's economic trajectory.

Despite these gains, challenges remain for China's economic growth, necessitating additional targeted policy measures to invigorate activity across various sectors. As the year progresses, it is expected that policymakers will intensify efforts to unleash inherent growth dynamics, promote technological advancements, and facilitate the integration of innovation within the industrial framework.

With a powerhouse population of 1.4 billion people and over 400 million middle-income earners, China enjoys considerable structural advantages. Moreover, the nation boasts 240 million individuals with higher education or professional skills, along with a robust annual output of STEM graduates, affirming its status as a formidable consumer market.

Notably, China is recognized as the world's second-largest consumer market and stands out as an economy equipped with a comprehensive industrial system. The country exhibits particular strengths in high-speed rail, power equipment, new energy, and telecommunications, establishing a systemic leadership in these sectors.

The emphasis of the CPC meeting on boosting domestic consumption was evident, as it reiterated commitments to invigorating consumption while enhancing living standards. Retail sales, in the first half of the year, expanded by 5 percent year-on-year, underscoring domestic consumption's critical role as a driver of growth, contributing over 50 percent of GDP growth.

As the year progresses, resources designated for fiscal and monetary measures will be swiftly mobilized to enhance household incomes and dismantle barriers in key industries. Anticipated advancements in major infrastructure projects and increased activity in domestic service consumption, such as tourism and healthcare, are poised to accelerate.

The meeting also made a clear call to invigorate private investment and expand effective investment channels. The private sector, especially in high-end equipment manufacturing, has been pivotal during the 14th Five-Year Plan, reflecting strong growth and successfully propelling fixed-asset investment.

Looking ahead, with supportive policies in place, private investment is expected to expand steadily. Investment in infrastructure, aided by the issuance of special treasury bonds, is projected to contribute significantly to economic stabilization, with expectations of continued momentum in high-tech and equipment manufacturing investments.