The first batch of national economic data for the second half of the year has been released, showing July maintained steady progress overall. On August 15, a National Bureau of Statistics press conference noted that despite complex international conditions and extreme weather including high temperatures and flooding in some domestic regions during July, the economy faced short-term impacts. However, under more proactive macroeconomic policies, production and demand continued growing, employment and prices remained generally stable, and new growth drivers kept expanding.

Statistical data shows that in July, national industrial added value above designated size grew 5.7% year-on-year, the service production index rose 5.8% year-on-year, total retail sales of consumer goods increased 3.7% year-on-year, and total import-export value reached 3.91 trillion yuan, up 6.7% year-on-year, accelerating 1.5 percentage points from the previous month. The second half achieved a successful start, but still faces considerable risks and challenges ahead.

The Central Political Bureau meeting held on July 30 proposed that macroeconomic policies in the second half should maintain continuous efforts and increase support when appropriate, implementing more proactive fiscal policy and moderately accommodative monetary policy to fully release policy effects. The following day, a State Council executive meeting deployed second-half work, clarifying the need to stabilize employment and expand domestic demand, further strengthen domestic circulation, optimize external circulation, and improve dual circulation to complete annual targets and 14th Five-Year Plan tasks, laying groundwork for a good start to the 15th Five-Year Plan.

Looking ahead to the second half, multiple institutions believe GDP growth could maintain around 5%, with the Political Bureau meeting indicating China has sufficient macroeconomic policy space and abundant policy tools, making the situation overall controllable.

**Import-Export Growth Hits Year-High**

At the start of the second half, China's exports maintained resilience, with external demand becoming important support for economic recovery. July foreign trade data exceeded external expectations, with total import-export value of 3.91 trillion yuan, up 6.7% year-on-year, accelerating 1.5 percentage points from June to hit a year-high. Exports reached 2.31 trillion yuan, up 8% year-on-year, while imports totaled 1.6 trillion yuan, up 4.8%. In the first seven months, China's total merchandise trade import-export value reached 25.7 trillion yuan, up 3.5% year-on-year.

Qianhai Open Source Fund Chief Economist Yang Delong analyzed that despite impacts from US tariff policies and other external factors, China's exports maintained relatively fast growth, fully demonstrating export resilience, with particularly significant results in product upgrades, notably improved product added value, and continuously optimized trade structure.

July exports to the United States fell 21.7% year-on-year, with the decline widening 5.5 percentage points from the previous month, dragging on China's export growth. However, exports to non-US regions maintained steady growth.

CITIC Securities Research Institute Deputy Director Wu Chaoming noted that July saw increased trade with Belt and Road partner countries including Africa and Latin America, as well as the EU, with export growth rates rising 7.6, 9.9, and 1.7 percentage points respectively from June, contributing over 90% of the export growth acceleration and being a main factor in this month's export improvement. Additionally, China's export growth to major trading partners including ASEAN and Hong Kong continued recording high growth at 16.6% and 10.7% respectively, supporting China's export resilience.

In contrast, July consumption data showed slower growth despite policy support. Data shows July total retail sales of consumer goods reached 387.8 billion yuan, up 3.7% year-on-year but down 0.14% month-on-month. Merchandise retail sales totaled 342.76 billion yuan, up 4.0%, while catering revenue achieved only 1.1% growth at 450.4 billion yuan.

Trade-in policy effects remained evident, with July retail sales of household appliances and audio-visual equipment, furniture, and cultural and office supplies by enterprises above designated size growing 28.7%, 20.6%, and 13.8% respectively. Moreover, driven by summer holiday effects, sports and entertainment goods growth accelerated from 9.5% to 13.7%.

**Service Industry Support Role Continues**

July service industry maintained positive recovery momentum, continuing to play an important role supporting stable economic growth. Data shows the monthly service production index grew 5.8% year-on-year, maintaining relatively fast growth pace.

Key industries performed strongly. Information transmission, software and information technology services, financial services, and leasing and business services production indices grew 11.9%, 8.7%, and 8.0% year-on-year respectively. The service industry business activity index reached 50.0%, while the business activity expectation index was 56.6%. Among these, railway transport, air transport, postal, and cultural, sports and entertainment industries' business activity indices were in the high prosperity zone above 60.0%.

National Bureau of Statistics spokesperson and Director of National Economic Accounting Department Fu Linghui pointed out that July service industry development showed four characteristics: first, modern service industries grew rapidly; second, emerging service industries cultivated growth, with AI large models and humanoid robots driving rapid development of new productive forces, strengthening pull on productive services like scientific research and technical services; third, tourism and travel-related services were active, with increased summer tourism driving related industry growth. Additionally, financial services achieved relatively fast growth, with July financial industry production index up 8.7% year-on-year, accelerating 1.4 percentage points from the previous month.

Promoting service consumption development is an important aspect of boosting consumption. International experience shows that when per capita GDP reaches around $15,000, consumption structure will accelerate transformation from goods consumption-led to services consumption-led. Currently, China's per capita GDP has exceeded $13,000, with service consumption entering rapid growth stage.

From 2013-2024, China's per capita service consumption expenditure rose from 5,246 yuan to 13,000 yuan, with its share of per capita consumption expenditure increasing from 39.7% to 46.1%. In 2024, China's service retail sales grew 6.2% year-on-year, 3 percentage points higher than merchandise retail growth; per capita service consumption expenditure grew 7.4% year-on-year, contributing 63% to per capita consumption expenditure growth.

In the first half of this year, China's service industry added value grew 5.5% year-on-year, contributing 60.2% to economic growth. In the process of industrial structure optimization and upgrading, the service industry's share in the national economy has steadily increased, with policy support systems continuously improving.

Recently, two policies on personal consumption loan interest subsidies and service industry business entity loan interest subsidies were introduced, working from both supply and demand sides to boost consumption. Interest subsidies for service industry business entities help provide more support for related operators, expand quality service supply, and further promote service consumption.

Looking ahead to the second half, Fu Linghui analyzed that China's service industry development has multiple favorable conditions: industrial upgrading and development expand demand for productive services like R&D and design, resident consumption structure upgrading increases demand for lifestyle services like culture, sports and leisure, plus various measures promoting service industry development will benefit sustained service industry growth and quality improvement.

From enterprise expectations, July service industry business activity expectation index was 56.6%, up 0.6 percentage points from the previous month, continuing in the relatively high prosperity zone of 56% and above, indicating service industry enterprises are generally optimistic about development prospects.