Jing Ji Guan Cha Wang·2025-07-01 11:41Economic Outlook - The report from the Bank of China Research Institute highlights that despite improvements in China's ability to handle internal and external risks, the economy still faces significant uncertainties and instabilities in the second half of the year [1] Consumer Growth - The main support for consumer growth in the second half is expected to come from effective policy measures and the release of service consumption potential [2] - From 2013 to 2024, per capita service consumption expenditure in China is projected to increase from 50,000 yuan to 130,000 yuan, driven by rising living standards and demographic changes [3] - However, the automotive sector, which has a significant share in consumption, is facing pressure due to a wave of price cuts from major brands, potentially dampening consumer sentiment [4] Real Estate Investment - The government is expected to introduce more supportive policies for the real estate market to stabilize expectations and activate demand [5] - Despite these efforts, the report indicates that the willingness and ability of real estate companies to expand investment remain limited, with a projected year-on-year decline in real estate development investment of approximately 10.8% [7] Export Trends - The demand from emerging economies is anticipated to support China's exports, with the share of exports to Belt and Road Initiative countries increasing from 26.9% in 2015 to 50.1% in 2025 [8] - However, challenges such as slowing global economic growth and high tariffs from the U.S. may lead to a potential decline in export growth [8] Price Levels - The core Consumer Price Index (CPI) is expected to remain low, with a projected year-on-year decline of 0.2% in the third quarter and an annual increase of only 0.1% [9] - The Producer Price Index (PPI) is also forecasted to decline by 2.5% in the third quarter and 2.4% for the year, reflecting weak demand in traditional sectors [9][10] Overall Economic Growth - The report anticipates that overall economic growth in the second half will be lower than in the first half, with GDP growth projected at 5% and 4.6% for the third and fourth quarters, respectively, leading to an annual growth rate of around 5% [10]