China's economy delivered a solid performance in the first half of 2025, with robust growth across the manufacturing sector, high-tech industries, and domestic consumption, according to the latest data from the State Taxation Administration. The strong showing comes as government policy measures continue to yield results, and multiple departments have recently outlined key priorities for the second half of the year.

Strong performance in H1 has given rise to three key priorities for H2

Data shows that the sales revenue of manufacturing enterprises grew 1.5 percentage points faster than that of all enterprises nationwide, while sales revenue in high-tech industries recorded a rapid growth of by 14.3 percent year-on-year. Driven by policies promoting large-scale equipment upgrades and trade-ins of consumer goods, corporate spending on mechanical equipment increased by 11.1 percent. Meanwhile, sales revenue of audio-visual products and home appliances surged by 45.3 and 56.6 percent, respectively.

To build on the momentum, government departments have mapped out their key priorities for the second half of the year, highlighting three core themes: unlocking the potential of domestic demand, promoting tech–industry integration, and strengthening overcapacity management in key sectors.

Unleashing domestic demand potential

The National Development and Reform Commission (NDRC), China's top economic planner, said another 69 billion yuan ($9.65 billion) in ultra-long special treasury bond funds will be allocated in October to support the consumer goods trade-in program.

Finance Minister Lan Fo'an, in a recent article, announced that new interest subsidy policies will soon be introduced to support consumer loans in priority areas, along with financial assistance for service-sector businesses.

In a bid to foster new growth drivers for consumption, the Ministry of Industry and Information Technology (MIIT) said it will roll out an action plan to boost demand by improving the alignment between supply and consumer preferences.

Driving innovation and tech–industry integration

On the innovation front, the MIIT emphasized on implementation of the major national science and technology initiatives, the expansion of innovation platforms, and the cultivation of technology business incubators. It also called for further improvement of industrial development policies on humanoid robotics, the Internet of Things, and high-end instrumentation.

Meanwhile, the People's Bank of China, the country's central bank, pledged to enhance its relending facility to support tech innovation and equipment upgrades, aiming to accelerate credit flows to small and medium-sized technology firms.

Strengthening overcapacity management

The term "involution" has become a buzzword in China, referring to destructive cycles of excessive competition that lead to diminishing returns. The Chinese government has launched a comprehensive campaign this year to tackle involution-style competition.

The NDRC announced plans to expedite the revision of China's pricing law and conduct targeted cost investigations in sectors facing intense involution-style competition, with the goal of encouraging more rational pricing behavior and healthier business practices.

The MIIT signals it will prioritize capacity governance in sectors such as new energy vehicles and photovoltaics, seeking to consolidate previous regulatory gains and raise industry standards to phase out outdated capacity.

(Cover via VCG)