Next Week in China: 14-18 July 2025

Major Data Releases:          

• 14 July: China to report June external trade balance
• 15 July: China to hold press conference on national economic performance
• 15 July: China to report June industrial production data
• 15 July: China to report June energy production level
• 15 July: China to report June investments in fixed assets, excluding rural households
• 15 July: China to report June real estate investments
• 15 July: China to report June total retail sales (TRS) of consumer goods
• 15 July: China to report level of household income and consumption for Q2 2025
• 15 July: China to report Q2 industrial capacity utilization rate
• 15 July: China to report June sales prices of commercial residential buildings
• 16 July: China to report value-added of major industries for Q2 2025

Next week will see a major wave of data releases for China with over 10 key economic indicators scheduled, some of which are important quarterly figures.

We expect the June year-on-year growth rate of total retail sales to be around 5.0 per cent (May: 6.4 per cent). This TRS moderation is primarily influenced by the shift in timing for the 618 shopping festival. Total sales across e-commerce platforms during the month-long shopping period reached RMB 855.6 billion (USD 119 billion), a year-on-year increase of 15.2 per cent. However, considering the 2025 promotion started earlier on 13 May, one week ahead of the 2024 schedule, average daily sales actually decreased by 7.2 per cent year-on-year, which weighed on the June reading. Additionally, June passenger vehicle sales maintained steady growth momentum driven by a fiscal stimulus, manufacturer promotions, and the release of consumer demand, although hefty price discounts may have pulled down the cumulative value of automotive retail sales.

Residents’ travel activity was robust in June boosted by the Dragon Boat Festival, with tourism and catering benefiting from the holiday and from industry consolidation. Although consumption momentum weakened marginally in June due to earlier spending and the tapering of the government’s trade-in subsidy, its effect of boosting consumption will persist. According to the National Development and Reform Commission (NDRC), about half of the annual national subsidy funds for consumer goods trade-ins have been utilized so far. The NDRC will allocate public funds for trade-in programs for the next two quarters in July and October, respectively, to ensure smoother policy implementation and a balanced fund utilization until year-end.

For investments in fixed assets, we anticipate year-on-year growth at 3.5 per cent for June.  Regarding infrastructure investment, May data showed an annualized decline in infrastructure-related expenditures, suggesting a potential slowdown in infrastructure investment expansion. Meanwhile, real estate investment experienced a year-on-year decline in commercial housing sales areas across 30 major cities widened again in June to record a drop of 10.7 per cent. Land transactions hit its lowest level in recent years, indicating that the property sector will continue to drag down overall investment growth. For manufacturing, factors such as declining business profits and the rollout of measures to curb cutthroat competition or price wars may dampen firms’ willingness to invest and expand their production capacity.

NDRC data show that ultra-long special treasury bonds issued this year allot RMB 200 billion (USD 27.9 billion) to support equipment upgrades. The first batch of funds, approximately RMB 173 billion (USD 24 billion), has been allocated to some 7,500 projects across 16 manufacturing sectors. The selection process for the second batch of funds is underway. Since funds for equipment upgrades were allocated earlier in the year, the contribution of investments in machinery and equipment to overall investment growth already softened in May, and this trend is likely to continue in June.

Chinese equities saw a stronger performance over the past week. As of Thursday, 10 July, the MSCI China Index had increased by 0.53 per cent from last week’s finish. The Shanghai Composite Index rose by 1.08 per cent, the Shenzhen Component Index by 1.16 per cent, and the ChiNext Index by 1.55 per cent. From a size perspective, small- and mid-cap stocks outperformed large-cap stocks. Based on investment style, value stocks outperformed growth stocks.

Looking ahead, the key policy focus is the Central Financial and Economic Affairs Commission’s focus on “anti-involution” measures targeting artificially low retail prices. This itself signals a stiffer state crackdown on price competition. Currently, the trend of “increasing revenues without corresponding profit growth” is an urgent issue for the economy, as persistent price wars are seen to undermine sustainable growth. However, the effects of the government’s anti-involution policies are unlikely to manifest rapidly in the short term. Validation from the demand side will determine the depth and breadth of such efforts. Further, it is yet to be seen whether continuing fiscal measures will provide further stimulus to the Chinese economy. In the near term, these subsidies primarily serve to trigger positive market expectations. The A-share market remains challenged to hit a broad-based ascent in the short run, and a sustained upward shift in the market’s centre of gravity may still require more catalysts before materialising.

This piece has been co-produced with Yiyi Capital Limited in Hong Kong, a China specialist and a part of a global financial services group.