To better assist enterprises in grasping the national development trend and achieving high-quality development, the WeChat official account of the China National Garment Association has specially launched a macroeconomic research column, releasing national macroeconomic research and global apparel trade reports on a quarterly basis. This report is compiled by the Research and Development Department of 旭日 Group (Sunrise Group).
I. China’s Macroeconomic Situation in the First Half of 2025
(I) Economic Growth
In the first half of 2025, China’s Gross Domestic Product (GDP) increased by 5.3% year-on-year. By quarter, it rose by 5.4% year-on-year in the first quarter and 5.2% in the second quarter. On a quarter-on-quarter basis, the GDP grew by 1.1% in the second quarter. By industry:
- The primary industry grew by 3.7% year-on-year.
- The secondary industry increased by 5.3%, a slowdown of 0.6 percentage points compared with the first quarter.
- The tertiary industry rose by 5.5%, an acceleration of 0.2 percentage points from the first quarter.
Final consumption expenditure contributed 52% to economic growth, up 0.3 percentage points from the first quarter, ranking first among the “troika” (consumption, investment, and net exports). Affected by factors such as tariffs, the contribution rate of net exports of goods and services stood at 31.2%, a decrease of 8.3 percentage points from the first quarter.
Guangdong Province’s GDP grew by 4.2% year-on-year, 1.1 percentage points lower than the national GDP growth rate, and its fixed asset investment dropped by 9.7% year-on-year, with the growth rate remaining negative. Although the International Monetary Fund (IMF) and a number of international institutions have raised China’s economic growth forecast by 0.4 percentage points to 5.1%, believing that proactive fiscal measures and the effect of tariff suspension will enhance economic momentum, the intensified trade tensions coupled with policy uncertainties will still weaken economic growth in the second half of the year.
(II) Industrial Production
In the first half of 2025, the added value of industrial enterprises above the designated size nationwide increased by 6.4% year-on-year, a slight slowdown of 0.1 percentage points compared with the first quarter. In June, the added value of industrial enterprises above the designated size rose by 6.8% year-on-year, reversing the downward trend for two consecutive months and reaching the second-highest level this year.
- The added value of the textile industry grew by 2.5% year-on-year, 4.3 percentage points lower than the overall industrial added value growth rate.
- The total profits of industrial enterprises above the designated size nationwide decreased by 1.8% year-on-year, with the growth rate dropping by 2.6 percentage points from the first quarter. However, the total profits of foreign-invested enterprises and enterprises with investments from Hong Kong, Macao, and Taiwan increased by 2.5% year-on-year.
- From January to June, the total profits of the textile and apparel industry fell by 10.0% year-on-year, but the decline narrowed by 8.4 percentage points compared with that from January to May.
The Producer Price Index (PPI) decreased by 2.8% year-on-year, with the decline deepening by 0.5 percentage points from the first quarter. By month:
- In January and February, affected by factors such as the Spring Festival holiday, the PPI dropped by 2.3% and 2.2% year-on-year respectively.
- In March, due to imported price transmission and the seasonal weakening of demand in some industries, the year-on-year decline expanded to 2.5%.
- Starting from April, export pressure caused by international trade uncertainties and insufficient demand in some industries led to a gradual expansion of the year-on-year decline, reaching 3.6% in June.
The domestic “anti-involution” policy is expected to benefit the supply-demand relationship of the industry and the stabilization and recovery of prices. It is predicted that the PPI will continue to decline in the short term, but the decline will narrow slightly.
(III) Household Consumption
In the first half of 2025, the National Consumer Price Index (CPI) decreased by 0.1% year-on-year, the same as the first quarter, and still significantly lower than the annual target of “around 2%”. In June, the CPI increased by 0.1% year-on-year, turning from negative to positive, and the core CPI (excluding food and energy prices) rose by 0.7% year-on-year, reaching a new high in nearly 14 months. It is expected that the CPI growth rate will likely continue to fluctuate around 0% in the short term in the second half of the year.
The total retail sales of consumer goods increased by 5.0% year-on-year, 0.4 percentage points faster than the first quarter. Among them, the growth rate in June was 4.8% year-on-year, a slowdown of 1.6 percentage points from May, and it decreased by 0.16% quarter-on-quarter, marking the first quarter-on-quarter decline since May 2024. The driving effect of the “trade-in” policy has weakened, and it is expected that the growth rate of total retail sales of consumer goods will slow down to 4% in the second half of the year.
The cumulative retail sales of clothing, footwear, hats, and knitwear products of enterprises above the designated size increased by 3.1% year-on-year, still 1.9 percentage points lower than the growth rate of total retail sales of consumer goods. From January to June, the online retail sales of clothing products increased by 1.4% year-on-year, 0.2 percentage points faster than that from January to May.
(IV) Investment Situation
In the first half of 2025, the national fixed asset investment increased by 2.8% year-on-year, 1.4 percentage points slower than the first quarter. Among them, private fixed asset investment decreased by 0.6% year-on-year, with the growth rate declining for three consecutive months and turning negative for the first time this year.
- The investment in general infrastructure and manufacturing increased by 8.9% and 7.5% year-on-year respectively. Although the growth rates slowed down, they are still expected to play a supporting role in the economy within the year.
- The investment in the textile industry rose by 14.5% year-on-year, significantly higher than the national fixed asset investment level.
- The national real estate development investment decreased by 11.2% year-on-year, with the decline deepening by 1.3 percentage points from the first quarter and expanding for four consecutive months.
- The sales area of newly-built commercial housing decreased by 3.5% year-on-year, with the decline expanding by 0.6 percentage points compared with that from January to May.
- The sales volume of newly-built commercial housing dropped by 5.5% year-on-year, with the decline widening by 1.7 percentage points from January to May.
- The performance of the top 100 real estate enterprises decreased by 10.8% year-on-year.
Although the dividend of current policies has weakened over time, the previous policies have successfully stabilized market expectations and laid a solid foundation for the development of the real estate market in the future.
(V) Trade Situation
In U.S. dollar terms, China’s foreign trade in goods increased by 1.8% year-on-year in the first half of 2025. Among them:
- Exports rose by 5.9% year-on-year, 0.1 percentage points faster than the first quarter.
- Imports decreased by 3.8% year-on-year.
In June, exports increased by 5.9% year-on-year, 1.2 percentage points faster than May. ASEAN, the European Union (EU), and the United States remained China’s top three export trade partners. Specifically:
- Exports to ASEAN and the EU increased by 13% and 6.6% year-on-year respectively.
- Exports to the United States decreased by 10.9% year-on-year.
- Exports to countries along the “Belt and Road” increased by 9.6% year-on-year, with ASEAN accounting for 35.3% of China’s exports to these countries, and Vietnam having the highest proportion among them.
Driven by positive strategies such as “rush exports” and “rush re-exports”, China’s import and export trade has achieved remarkable results, laying a solid foundation for the stable growth of foreign trade throughout the year. However, it should be noted that global unilateralism and protectionism are on the rise, and the complexity, severity, and uncertainty of the external environment have increased. It is expected that exports will gradually face pressure in the second half of the year, especially in the fourth quarter.
II. China’s Macroeconomic Policies in the First Half of 2025
(I) Macroeconomic Policies
The Executive Meeting of the State Council held on July 16 pointed out that strengthening the domestic circulation is a strategic measure to promote the stable and long-term development of the economy. Specific measures include:
- Further implementing special actions to boost consumption, optimizing the “trade-in” policy for consumer goods, increasing diversified supply in line with household consumption demands, and expanding investment in fields such as new productive forces and emerging service industries to fully release the potential of domestic demand and continuously enhance the endogenous driving force of the domestic circulation.
- Focusing on prominent issues, improving the accuracy and operability of policies, strengthening coordination and cooperation among departments, pooling efforts for policy implementation, and accelerating the resolution of blocking points hindering the domestic circulation.
The Political Bureau of the Communist Party of China (CPC) Central Committee held a meeting in July 2025 to analyze and study the current economic situation and deploy economic work for the second half of the year. The meeting held that in the face of the complex and changing domestic and international situations, all regions and departments have adhered to the general tone of seeking progress while maintaining stability, effectively promoted various work, and maintained a stable and positive momentum of economic development. For the second half of the year, the following tasks were emphasized:
- Actively and steadily defusing local government debt risks, strictly prohibiting the increase of hidden debts, and promoting the clearance of local financing platforms in a powerful, orderly, and effective manner.
- Preventing and resolving financial risks, and balancing the intensity and pace of deleveraging.
- Attaching equal importance to expanding domestic demand and structural adjustment, and establishing a 90 billion yuan childcare subsidy fund (with the central finance bearing 90%).
- Strengthening the supervision of government investment funds to prevent homogeneous competition and the crowding-out effect on social capital.
- Promoting the in-depth development of the joint construction of the “Belt and Road” and implementing measures to relax market access.
- Deepening the supply-side structural reform, focusing on making up for shortcomings in infrastructure, and reducing enterprise costs.
- Highlighting the stability of employment, ensuring basic people’s livelihood expenditures such as education and social security, and strengthening the connection between rural revitalization and poverty alleviation.
- Enhancing the attractiveness of China’s domestic capital market, consolidating the momentum of recovery and improvement, and maintaining a reasonable and sufficient liquidity.
(II) Monetary Policy
The Second Quarter Regular Meeting of the Monetary Policy Committee in 2025 held on June 30 pointed out that China’s economy is showing a positive trend, social confidence is continuously boosted, and high-quality development is advancing solidly. However, it still faces difficulties and challenges such as insufficient domestic demand, continued low price levels, and relatively many risk hazards. The meeting put forward the following requirements for the monetary policy:
- Implementing a moderately loose monetary policy, strengthening counter-cyclical adjustments, giving better play to the dual functions of monetary policy tools in terms of total volume and structure, increasing the coordination and cooperation between monetary and fiscal policies, and maintaining stable economic growth and prices at a reasonable level.
- In the next stage, it is recommended to increase the intensity of monetary policy regulation, improve the forward-looking, targeted, and effectiveness of monetary policy regulation, and flexibly grasp the intensity and pace of policy implementation according to the domestic and international economic and financial situation and the operation of the financial market.
- Maintaining sufficient liquidity, guiding financial institutions to increase the scale of monetary and credit supply, so that the growth of social financing scale and money supply is consistent with the expected goals of economic growth and the general price level.
- Strengthening the guidance of the central bank’s policy interest rates, improving the market-oriented interest rate formation and transmission mechanism, giving play to the role of the market interest rate pricing self-discipline mechanism, and strengthening the implementation and supervision of interest rate policies.
- Promoting the decline of the comprehensive social financing cost.
- Unblocking the monetary policy transmission mechanism, improving the efficiency of fund use, and preventing the idling of funds.
- Enhancing the resilience of the foreign exchange market, stabilizing market expectations, preventing the risk of exchange rate overshooting, and maintaining the basic stability of the RMB exchange rate at a reasonable and balanced level.
- Increasing support for scientific and technological innovation and consumption promotion, and providing good financing support for key areas such as “two priorities” (key projects and key enterprises) and “two news” (new industries and new formats).
- Focusing on promoting the implementation of the introduced financial policy measures, increasing the efforts to revitalize the stock commercial housing and stock land, continuously consolidating the stable trend of the real estate market, improving the basic system of real estate finance, and helping to build a new model of real estate development.
(III) Fiscal Policy
According to the press conference on China’s fiscal revenue and expenditure situation in the first half of 2025, the following fiscal policy measures will be continued in the next step:
- Implementing a more proactive fiscal policy, accelerating the progress of budget implementation, improving the efficiency of fund use, and promoting the sustained recovery and improvement of the economy.
- Continuing to increase investment, further improving the “people’s livelihood content” of fiscal fund allocation.
- Accelerating the introduction of incremental policy measures to boost consumption, guiding local governments to improve the consumption environment and optimize consumption supply.
- Continuously promoting the implementation of a series of incremental debt relief support policies including the debt replacement policy, and fully releasing the effect of incremental debt relief support policies.
- Completing the issuance task of 1.3 trillion yuan of ultra-long-term special government bonds as scheduled, and effectively guaranteeing the implementation of “two priorities” and “two news” projects.
III. Global Apparel Export Situation in the First Half of 2025
(I) Global Apparel Export Overview
From January to June 2025:
- China’s apparel exports decreased by 0.2% year-on-year, with the decline narrowing by 2.2 percentage points compared with the first quarter. Specifically, exports to ASEAN still decreased by more than 10% but with a narrowed decline; exports to the EU increased by 10.9% with an expanded growth rate; exports to the United States turned to negative growth, dropping by 1.6% year-on-year.
- From January to July, China’s exports of apparel and clothing accessories decreased by 0.3% year-on-year.
- South Korea’s apparel exports saw a narrowed decline, with exports to China and the United States increasing by 0.9% and 1.9% year-on-year respectively, and the growth rates rebounded.
- Vietnam’s textile and apparel exports increased by 13.0% year-on-year, with an accelerated growth rate. Among them, its exports to the United States accounted for the largest share, increasing by 17.5% year-on-year.
- Bangladesh’s apparel exports rose by 4.7% year-on-year, with exports to the United States and the EU increasing by 13.8% and 9.1% year-on-year respectively.
- Pakistan’s apparel export growth slowed down, with exports of woven apparel and knitted apparel increasing by 10.0% and 10.9% year-on-year respectively.
- India’s ready-made garment export growth accelerated slightly.
Table 1: Apparel Export Growth Rates of Major Countries in 2025 (Unit: %)
| Country | April | May | June | Jan-Mar | Jan-Jun |
|---|---|---|---|---|---|
| China | 3.5 | -2.4 | -0.8 | 1.9 | -0.2 |
| South Korea | / | / | / | -9.2 | -1.6 |
| Vietnam | 11.2 | 18.1 | 19.7 | 13.9 | 13.0 |
| Bangladesh | 6.4 | 0.4 | 11.9 | -6.3 | 4.7 |
| Pakistan | 15.3 | 2.9 | 6.2 | 8.4 | 10.5 |
| India | 7.6 | 6.4 | 14.4 | 11.4 | 1.2 |
(II) Global Apparel Import Situation
In the first half of 2025, the growth rate of apparel imports in the United States and the EU slowed down, while Australia’s growth momentum strengthened, and New Zealand’s import growth also turned stronger in June.
- From January to June, the United States’ apparel imports from the world increased by 6.7% year-on-year, 4.3 percentage points slower than that from January to March; its apparel imports from 7 Asian countries rose by 8.5% year-on-year, 5.9 percentage points slower than the first quarter.
- From January to May, the Eurozone’s apparel imports from 7 Asian countries increased by 18.5% year-on-year, 10.4 percentage points slower than the first quarter.
- From January to June, Australia’s imports of textiles, apparel, and footwear totaled 12.591 billion Australian dollars, increasing by 8.7% year-on-year.
- In June, New Zealand’s apparel imports increased by 7.6% year-on-year.