Chen Changhua: What’s Behind the Wide Divergence in Industry Prosperity? (AI Translation)
Listen to the full version
文｜陈昌华
By Chen Changhua
2025年上半年的经济数据，大致确认了中国经济在2024年经济刺激政策出台后已经基本稳定，并出现了轻微反弹，但是基础较薄弱，通缩压力不小，青年就业还是亟须解决的问题，经济发展动力仍然十分依赖出口。除了这些主要观察，一些没有引起太多讨论的细节也值得留意。
Economic data from the first half of 2025 largely confirm that after the introduction of economic stimulus policies in 2024, China's economy has essentially stabilized and even experienced a slight rebound. However, the foundation remains fragile, deflationary pressures are significant, and youth employment remains an urgent issue to be addressed. Economic growth continues to rely heavily on exports. In addition to these key observations, some lesser-discussed details also merit attention.
首先是出口。过去两三年，中国出口市场已从发达国家转向例如东盟等新兴市场；2025年因美国提出大幅提高进口关税，这一趋势更加明显。
First and foremost is exports. Over the past two to three years, China’s export markets have shifted from developed countries to emerging markets such as ASEAN. In 2025, this trend is becoming even more pronounced due to the United States' proposal to significantly increase import tariffs.
值得留意的是，随着出口市场转变，中国的出口产品也有很大的结构性变化。十年前，下游电子产品，如电脑和手机，是中国的主要出口产品；但2025年上半年，它们的出口金额同比下降2.3%。过去几年电动车和电池出口大幅上升；2025年上半年的出口金额比去年同期上升22.6%，而这些商品很大部分出口到其他新兴市场。
It is noteworthy that as China’s export markets have shifted, the structure of its export products has also undergone significant changes. A decade ago, downstream electronics such as computers and mobile phones were China’s main export items; however, in the first half of 2025, exports of these products declined by 2.3% year-on-year. In contrast, exports of electric vehicles and batteries have surged in recent years; in the first half of 2025, exports in this category rose by 22.6% from a year earlier, with a significant portion of these goods destined for other emerging markets.
- DIGEST HUB
Digest Hub
Back
- China’s economy stabilized and slightly rebounded in early 2025 after 2024 stimulus, but faces weak foundations, deflation pressure, and youth unemployment.
- Export growth shifted from developed countries to emerging markets, with electric vehicles, batteries (up 22.6% YoY), and semiconductors (up 18% YoY) driving gains.
- Fixed-asset investment in real estate dropped 11.2% YoY, while retail sales growth accelerated to 5% YoY, mainly due to government trade-in subsidies.
The economic data from the first half of 2025 indicates that China’s economy has largely stabilized following the introduction of economic stimulus policies in 2024, with a slight rebound observed. However, the recovery is fragile, with persistent deflationary pressures, ongoing youth unemployment issues, and continued reliance on exports as the main driver of economic growth. Beyond these principal observations, several less-discussed details warrant attention. 3
First, regarding exports, there has been a significant shift in China’s export markets over the past two to three years, moving away from developed countries toward emerging markets such as ASEAN. This trend became even more prominent in 2025, as the United States raised import tariffs significantly. 3
This shift in export destinations is mirrored by a structural change in China’s export products. A decade ago, computers and mobile phones accounted for much of China’s exports; however, in the first half of 2025, exports of these downstream electronics fell by 2.3% year-on-year. Conversely, exports of electric vehicles (EVs) and batteries have surged in the last few years, with a 22.6% year-on-year increase in the first half of 2025, much of which was shipped to other emerging markets. 3
Additionally, from 2024, semiconductors have become a major driving force behind export growth, rising by 18% year-on-year in the first half of 2025. While China remains dependent on imports of advanced chips—such as Nvidia’s AI chips—due to technological gaps, the country has achieved full production capabilities in the mid- and low-end chip sectors after years of investment, exporting these in large volumes to emerging markets. These chips, along with other electronic components, are often sent to emerging markets for further assembly and processing, with many final electronics subsequently exported to developed markets. As a result, China’s exports of electronic components to ASEAN countries have partially replaced earlier direct exports of finished electronics to developed nations. Consequently, U.S. trade negotiations with ASEAN members—especially regarding transshipment tariffs—will have significant impact on China’s electronic component trade with these countries. 3
In terms of infrastructure investment, the electric power and information sectors saw rapid growth, increasing by 22.8% and 13% year-on-year, respectively. These gains were mainly driven by supportive government policies around new energy and information technology. 3
Manufacturing investment in the electronics sector, which had surged by 27% and 19% in 2022 and 2023 due to semiconductor investments, slowed in 2024 and declined by 2% year-on-year in the first half of 2025, reflecting a deceleration in chip investment. Investments related to artificial intelligence are distributed across various industries, not just electronics manufacturing. Nevertheless, the investment slowdown in electronics is likely temporary, as emerging sectors like AI and new energy will require substantial new types of electronic components. 3
Real estate investment continued to perform the worst, falling 11.2% year-on-year in the first half. While property sales saw a rebound after stimulus measures in late 2024, growth momentum weakened in early 2025 and the recent months showed worsening declines. Persistently weak sales mean the real estate sector remains the weakest link in China’s economy, with falling land sales revenue posing ongoing pressure on local government finances. 3
Expanding domestic demand, particularly consumption, was highlighted as a core economic goal for 2025. Following policy interventions, total retail sales accelerated from 3.5% growth in 2024 to 5% year-on-year in the first half of 2025, with large-scale retail enterprises seeing sales rise from 2.7% to 6.1%, mainly due to government subsidies for new-for-old product replacement. 3
Breaking down major retail categories, products benefiting from the “new-for-old” policy—such as appliances, office supplies, furniture, and communication devices—saw a 23.7% year-on-year sales surge in the first half of 2025. Automobile sales also benefited, but price competition caused a 0.6% sales decline by value. Other product sales improved from 3.2% growth in 2024 to 5.2% in the first half of 2025. 3
- Nvidia
英伟达 - Nvidia's AI chips are among the advanced semiconductor imports China still requires. Although China has made significant strides in mid-to-low-end chip production and is exporting them to emerging markets, it continues to rely on imports for cutting-edge chips like those from Nvidia.
- 2022：
- Manufacturing investment in the electronics sector increased 27% year-on-year.
- 2023：
- Manufacturing investment in the electronics sector increased 19% year-on-year.
- 2024：
- Economic stimulus policies were introduced in China.
- End of September 2024：
- Economic stimulus measures were introduced, leading to a notable rebound in property sales in Q4 2024.
- Q4 2024：
- Sales of goods supported by the 'trade-in' initiative began to rise.
- End of 2024：
- Central Economic Work Conference emphasized expanding domestic demand, particularly consumption, as a top priority for 2025.
- First half of 2025：
- China's economy has essentially stabilized after stimulus policies in 2024, with signs of slight rebound. Various year-on-year changes took place: exports of downstream electronics declined by 2.3%; exports of electric vehicles and batteries rose 22.6%; semiconductor exports increased 18%; power and information sector investment rose by 22.8% and 13% respectively; manufacturing investment in electronics declined by 2%; fixed-asset investment in real estate declined by 11.2%; retail sales growth accelerated to 5% overall and 6.1% for large-scale retailers; sales of 'trade-in' supported goods surged 23.7%; auto sales revenue fell 0.6%; and sales of other products grew 5.2%.
- As of first half of 2025：
- China’s export markets have shifted from developed countries to emerging markets such as ASEAN, accentuated by the US proposal to significantly increase import tariffs.
- PODCAST
- MOST POPULAR
Sign in with Google
Sign in with Facebook
Sign in with 财新