On October 14, Chinese premier Li Qiang presided over a symposium with economic experts and entrepreneurs to hear their opinions and suggestions on the current economic situation and the next steps in economic work.
The current economic situation should be viewed from a broader perspective, taking into account long-term development trends under the Five-Year Plan and assessing the vitality of businesses through the flows of people, goods, information, and capital, said Li.
He highlighted the key priorities and policy directions for the next phase of economic work. First, he emphasized the need to strengthen counter-cyclical measures, sustain the momentum of overall policies, fully utilize available resources, and employ reforms to address obstacles and bottlenecks, thereby boosting development momentum.
Since Q3, China’s economic growth momentum has eased due to factors including extreme weather, the pacing of stabilization policies, and external conditions. Recently, expectations for further policy support have risen.
Wang Qing, Chief Macro Analyst at Golden Credit Rating International, said that a new round of growth-stabilizing policies may be introduced in Q4. “Currently, China’s government debt ratio is low among major economies, the government has substantial net assets, and the current price level is also low, all of which provide ample policy space.”
Second, Li emphasized the need to continue expanding domestic demand and strengthening the domestic circulation, leverage various consumption-boosting measures, focus on increasing effective investment, further stimulate market vitality, enhance high-quality supply, and generate new growth drivers for domestic demand.
Data from the National Bureau of Statistics (NBS) show that the total retail sales of consumer goods in August grew by 3.4% year-on-year, slowing for three consecutive months and falling 3 percentage points from the year’s high in May. As large-scale consumer goods trade-in subsidy program began in September last year, the high base may further drag down consumption growth in Q4.
According to Lu Zhe, an analyst at Soochow Securities, the deceleration of consumption growth since May is largely due to insufficient funds for consumer goods trade-in subsidies rather than demand being exhausted, and if additional subsidy funds can be provided in Q4, consumption growth is expected to stabilize.
According to Lu Zhe, an analyst at Soochow Securities, the slowdown in consumption growth since May is mainly due to insufficient funding for consumer goods trade-in subsidies rather than a lack of demand. He noted that if additional subsidy funds are provided in Q4, consumption growth is likely to stabilize.
Wang Qing noted that there may be a new issuance of ultra-long-term special government bonds in Q4, along with an increase in funding for equipment renewal and consumer goods trade-in policies. “Given that 150 billion yuan in subsidies for these programs were fully allocated in the second half of 2024, raising the baseline considerably, it is necessary to boost support in Q4,” he explained.
Regarding investment, NBS data show that fixed-asset investment in the first eight months of 2025 grew by 0.5% cumulatively, slowing by 1.1 percentage points from the first seven months and hitting a new low for the year. Among them, infrastructure investment excluding power projects grew only 2% year-on-year.
On September 29, the National Development and Reform Commission (NDRC) noted that it’s actively promoting new policy-based financial instruments, totaling 500 billion yuan, entirely used to supplement project capital.
Several regions have announced plans for projects supported by the policy-based financial instruments, marking the transition from policy design to actual implementation. According to public information, these instruments cover areas including rail transit, municipal public utilities (including water supply and heating), logistics and warehousing, urban renewal, nuclear power, coal, new energy, water conservancy, and ecological protection.
Wang Qing estimated that the 500 billion yuan of new policy-based financial instruments could leverage about 6 trillion yuan in investment, equivalent to 24.4% of the broad-caliber infrastructure investment total in 2024, and after implementation, these policy instruments are expected to boost infrastructure investment by 3-4 percentage points annually over the next three years.
Third, Li Qiang stressed the need to vigorously support stabilizing foreign trade and foreign investment, actively explore diversified markets, improve the overseas comprehensive service system, and implement a number of landmark foreign investment projects.
According to the latest data from the General Administration of Customs, China’s exports, in US dollar terms, grew 8.3% year-on-year in September, reaching a six-month high, with exports in the first three quarters maintaining a high growth of around 6%.
Exports to the European Union, ASEAN, and Belt and Road partner economies continued to show high growth, effectively offsetting the decline in exports to the US. China’s exports to Africa grew 56.4% year-on-year in September, an increase of 30.6 percentage points from the previous month; exports to Latin America grew 15.2%, up 17.5 percentage points from the previous month; exports to the EU grew 14.2%, up 3.8 percentage points from the previous month; exports to ASEAN grew 15.6%, down 6.9 percentage points from the previous month; exports to the US declined 27.0%, a narrower decline of 6.1 percentage points from the previous month.
Analysts noted that although the US’s recent additional tariffs and port fees may bring uncertainty to China’s exports in Q4, the risk of these measures being fully implemented in the short term is low, and the impact is limited. Meanwhile, improved external demand and China’s increased share in emerging markets may help maintain a high level of export activity.
Xiong Yuan, Chief Economist at Guosheng Securities, said that China’s exports in Q4 of 2024 grew by 9.9% year-on-year, 4 percentage points higher than in the previous quarter, and considering the high base, export growth may slow to around 2%-3% in Q4 this year. “Exports to the US are expected to maintain a substantial negative growth, but support from Europe and emerging markets remains unchanged, pointing to likely positive year-on-year export growth in Q4.”
Wu Chaoming, Chief Economist at Chasing Financial, noted two favorable conditions for China’s exports going forward. First, “anti-involution” policies are expected to optimize market competition, increase relevant industrial product prices, and help boost export growth, and second, China’s trade partners have been expanding, with trade structure continuously optimized, improving China’s ability to respond to changes in the global supply chain and market fluctuations.
Finally, Li Qiang proposed measures to foster a first-class industrial ecosystem, comprehensively manage disorderly and irrational industry competition, promote deeper cooperation among upstream, downstream, and small- and medium-sized enterprises, accelerate the transformation of scientific and technological achievements, develop venture capital funds, and focus on building an innovation ecosystem.
The Ministry of Industry and Information Technology (MIIT) has recently released a new round of top ten industry growth stabilization work plans, covering industries such as steel, building materials, automobiles, non-ferrous metals, and electronic information manufacturing, which explicitly include measures to strengthen industry governance and regulate competition order.
Recent NBS data show improvements in profits and prices across multiple industries. For example, from January to August, profits in the raw materials manufacturing sector rose 22.1% year-on-year, and the steel industry returned to profitability year-on-year. In August, the Producer Price Index (PPI) for industrial products declined 2.9% year-on-year, narrowing by 0.7 percentage points from July—the first improvement since March this year. Specifically, PPI declines narrowed by 2.8 and 0.6 percentage points in photovoltaic and new energy vehicle manufacturing, respectively. Month-on-month, PPI changed from a 0.2% decline in July to flat in August, ending the downward trend for the first time this year.