China's NBS: Consumption trends to continue in H2, policy support to strengthen

China's NBS: Consumption trends to continue in H2, policy support to strengthen

China's National Bureau of Statistics (NBS) has indicated that consumer prices in the country are expected to continue their upward trend in the second half of the year, driven by policy support aimed at boosting domestic demand and consumption. The NBS reported that consumer prices rose by 0.1% year-on-year in June, ending a four-month decline [1]. This rebound was primarily attributed to the recovery in prices of industrial consumer goods, which was bolstered by government policies designed to stimulate spending.

The NBS also noted that factory gate prices fell at their fastest pace in nearly two years in June, with the producer price index declining by 3.6% year-on-year. This deflationary pressure is a concern, but the government is taking steps to counteract it. The latest data suggests that the government's efforts to promote consumption are having an impact, with consumer spending showing signs of recovery.

China's economy grew by 5.2% in the second quarter of 2025, exceeding analysts' expectations [2]. This growth was supported by policy measures, including key rate cuts and consumer goods trade-in schemes. The resilience of the economy despite the ongoing trade war with the United States underscores the effectiveness of these policies.

Looking ahead, the NBS expects continued policy support to strengthen consumption trends in the second half of the year. While the property market remains a concern, with the sector's momentum weakening, exports are expected to play a more significant role in driving economic activity. However, the outlook for Chinese exports is clouded by the ongoing trade tensions and the potential impact of new tariffs announced by the United States.

In conclusion, while challenges remain, the latest data from the NBS suggests that China's economy is showing signs of resilience. The continued upward trend in consumer prices and the government's commitment to policy support indicate that consumption trends are likely to continue in the second half of the year.

References:
[1] https://m.economictimes.com/news/international/business/chinas-snaps-four-month-consumer-decline-but-factory-price-deflation-deepens/articleshow/122332609.cms
[2] https://finance.yahoo.com/news/chinas-q2-gdp-grows-5-020422399.html