Since the beginning of this year, China's macroeconomic policies have been precisely regulated, and the economy has shown strong resilience and vitality. In the first half of the year, driven by large-scale equipment updates and the policy of exchanging old for new consumer goods (hereinafter referred to as the "two new" policy), consumption and investment continued to make efforts. The overall operation of the national economy remained stable, and the trend of high-quality development continued, demonstrating strong resilience and vitality. Several experts have stated in interviews with reporters that by the first half of 2025, China's GDP growth target of over 5% is basically guaranteed, and the growth rate in the second quarter may reach around 5.3%. The "two new" policies have made significant efforts to stimulate consumption and investment, and the consumption performance in the first half of 2025 is relatively impressive. According to data released by the National Bureau of Statistics, the total retail sales of consumer goods in the first five months increased by 5.0%, a significant increase from the 3.5% growth rate of the whole year last year. Among them, the effect of the policy of exchanging old for new consumer goods continues to show. In May, the retail sales of household appliances and audio-visual equipment, communication equipment, cultural and office supplies, and furniture in units above designated size increased by 53%, 33%, 30.5%, and 25.6% respectively year-on-year, driving a total increase of 1.9 percentage points in the retail sales of consumer goods in society. The consumption performance since the beginning of this year fully demonstrates the strong resilience and potential of China's consumer market. It is expected that the total retail sales of consumer goods in the second quarter will increase by 5.6% year-on-year. ”Zhang Jun, Chief Economist of China Galaxy Securities, stated in an interview with reporters that the Chinese consumer market is undergoing a structural transformation of "rationalization of material consumption and luxury of spiritual consumption". On the one hand, the uncertainty of the economic environment in the past few years has prompted people to re-examine the value of consumption, and traditional consumption has shown "rationalization" characteristics; On the other hand, new consumer brands represented by Old Shop Gold and Bubble Mart continue to be popular, reflecting consumers' pursuit of spiritual satisfaction and emotional value. The coexistence of the two reflects the dual characteristics of consumption upgrading from "material needs" to "spiritual needs", promoting a significant increase in demand for experiential and self pleasing consumption. According to Wu Chaoming, Vice President of Caixin Research Institute, the consumption growth has been significantly better than expected since the beginning of this year, mainly due to four reasons, including the significant driving effect of the trade in policy, the recovery of consumption among low - and middle-income groups, the improvement of service consumption driven by the May Day and Dragon Boat Festival holidays, the increased promotion of e-commerce during the 618 shopping festival, and the increased demand for high-quality living among residents, which has promoted the rapid growth of some upgraded products. At the same time, the driving effect of equipment renewal investment is also prominent, and manufacturing investment has achieved rapid growth. The data shows that the manufacturing investment in the first five months increased by 8.5% year on year, 4.8 percentage points higher than the national fixed assets investment (excluding farmers) (hereinafter referred to as "total investment"). In the first five months, the investment in equipment and tools procurement increased by 17.3% year-on-year, driving a total investment growth of 2.3 percentage points and contributing 63.6% to the total investment growth. Driven by policies, the production of related industries has grown rapidly. In May, the added value of industries such as large-scale lithium-ion battery manufacturing, shipbuilding and related equipment manufacturing, and boiler and prime mover equipment manufacturing increased by 28.6%, 12.8%, and 11.8% year-on-year, respectively. The production of new energy vehicles, tablets, electric bicycles and other replacement products increased by 31.7%, 30.9% and 20.5% respectively. This series of data indicates that the "two new" policies not only directly stimulated consumer demand, but also drove manufacturing investment and production expansion through the transmission effect of the industrial chain. In Zhang Jun's view, the continuous implementation of large-scale equipment renewal policies is injecting strong impetus into manufacturing investment. At the same time, with the steady promotion of high-end, intelligent, and green development in manufacturing, and the acceleration of technological transformation and upgrading in manufacturing, the development of new quality productivity will continue to drive manufacturing investment. The short-term policy of expanding domestic demand, represented by the 'two new' policy, has a different connotation from the early policy of expanding domestic demand. ”Zhao Wei, Chief Economist of Shenwan Hongyuan Securities, stated that taking the policy of exchanging old for new consumer goods as an example, durable goods such as automobiles and household appliances pay more attention to the coordination between the central and local governments, and the proportion of funds borne by the central government has significantly increased; In addition, the government has eased the cash flow pressure on residents by reducing existing mortgage interest rates and indirectly supporting consumption. It has also further improved the social security system by increasing subsidies to vulnerable groups to restore residents' consumption confidence. It is worth noting that the sustained efforts of macroeconomic policies have not only driven consumption and production, but also improved enterprise efficiency and market expectations, laying the foundation for high-quality economic development. In the first four months, the profits of industrial enterprises above designated size increased by 1.4% year-on-year, which was 0.6 percentage points faster than the previous three months. The Purchasing Managers' Index (PMI) for the manufacturing industry in May rebounded by 0.5 percentage points compared to April, and the production index rose to the expansion range; The business activity index of the service industry is 50.2%, maintaining a prosperous range for three consecutive months. Experts interviewed believe that in the second half of the year, China's economy will face both challenges and opportunities. On the one hand, external uncertainty will increase, and the role of export drivers may weaken; On the other hand, the endogenous driving force of consumption still needs to be consolidated, and policies need to be further strengthened. Zhang Jun stated that the impact of uncertainty in international trade policies may gradually become apparent in the second half of the year, with a weakening of the "export rush" effect and a possible weakening of the role of exports in driving the economy. Zhao Wei analyzed that in the second half of the year, there may be a "strong weak transition" in the structure of major macro indicators. With the end of the "export rush" and equipment update cycle, as well as the intensification of the "anti internal competition" policy, the manufacturing industry may be under pressure. Investment and consumption in the service industry have improved in the first half of the year. In the second half of the year, policies are expected to be further intensified, and the repair of the service industry is expected to moderately offset the pressure on the manufacturing industry. Although the "two new" policies have achieved significant results in the first half of the year, the internal driving force of consumption still needs to be consolidated. Zhang Jun believes that the consumption growth rate of those who enjoy the trade in subsidy is significantly higher than that of areas not covered by the policy, and enterprises above designated size perform better than the overall. In addition, the growth center of service retail sales is significantly lower than in 2024, indicating that there are still structural weaknesses in the consumer market. How can policies be further strengthened? In terms of expanding domestic demand, Yang Delong, Chief Economist of Qianhai Open Source Fund, said that in order to achieve the annual GDP growth target of 5%, multiple measures need to be taken. He suggested that more policies to stimulate domestic demand should be introduced in the second half of the year, further expanding the coverage of the trade in policy, and considering ways to boost the consumption ability of low-income groups through the issuance of consumption vouchers and other means. Xiong Yi, Chief Economist of Deutsche Bank China, stated that the trade in policy has achieved phased results in promoting commodity consumption, but considering the durable goods replacement cycle, the subsequent policy stimulus effect may gradually slow down. To further promote domestic consumption, it is necessary to boost employment and residents' income, and reverse low inflation expectations. In terms of increasing fiscal and monetary policy support, Zhao Wei believes that on the one hand, we should increase investment in representative fields such as "dual" and "two new", and improve fund efficiency by unblocking funding sources and expanding the scope of fund use; On the other hand, subsidies and structural tax reductions should be increased for vulnerable groups, and the social security system should be further improved to restore residents' consumption confidence. According to a research report by China International Capital Corporation, in the second half of the year, the focus of monetary policy may be on further implementing structural monetary policy tools. Some of the fiscal deficit amount decided at the beginning of the year still needs to be released, but new policies may be added at a discretion. Experts interviewed generally believe that although the second half of the year will face challenges such as increased external uncertainty and insufficient domestic consumption, through measures such as expanding domestic demand policies, increasing fiscal and monetary policy support, and improving the social security system, the Chinese economy is expected to continue to maintain a stable and progressive development trend, laying a solid foundation for achieving the goals of the 14th Five Year Plan. (New Society)