China’s economy is on the rise, expanding by 5.3 percent in the first half of 2025, surpassing expectations and signaling robust growth. This impressive performance has led several major international banks to raise their full-year GDP forecasts for the country.
Key economic indicators highlight China’s resilience. Industrial output from major firms increased by 6.4 percent, driven by a remarkable 9.5 percent surge in high-tech manufacturing. Retail sales, a vital measure of consumer spending, climbed 5 percent, accelerating from the first quarter. Exports also saw a significant boost, growing by 7.2 percent during the same period.
In response to these positive figures, financial institutions have adjusted their projections. Morgan Stanley lifted its forecast from 4.5 percent to 4.8 percent, citing strong export performance and proactive fiscal policies. UBS revised its estimate sharply from 4.0 percent to 4.7 percent, and Goldman Sachs increased its forecast from 4.6 percent to 4.7 percent, according to reports by Global Times. Meanwhile, ANZ upgraded its projection from 4.2 percent to 5.1 percent, marking one of the most optimistic adjustments, as reported by Bloomberg.
Analysts attribute these upgrades to robust global demand for Chinese goods, supportive government trade policies, and improving corporate earnings. The rebound in tourism has also played a significant role in boosting domestic consumption.
While the outlook is positive, some banks have cautioned about potential challenges ahead. They note that export growth might slow in the coming months, which could impact the overall economic expansion. Additional policy support is anticipated, but its extent will depend on future economic data.
The brighter economic landscape is improving market sentiment among investors. Citigroup has upgraded Chinese consumer stocks from “neutral” to “overweight,” reflecting increased confidence in the market. Additionally, Martin Franc, CEO of Invesco’s Asia ex-Japan division, highlighted growing investor interest in China’s technology sector.
“A consensus is growing that the opportunity set around China is unique and compelling, especially relating to the evolving technology ecosystem,” Franc said. “Investors are becoming increasingly convinced of China’s innovative leadership in major technology segments and don’t want to be left behind.”
