A drone photo taken on July 12, 2025 shows visitors enjoying themselves at a seaside scenic spot in Rongcheng City, east China's Shandong Province. High temperature during the summer vacation has triggered new vitality of cooling economy across the country. (Photo by Li Xinjun/Xinhua)

China's retail sales, a key indicator of the country's consumption strength, rose 5 percent year-on-year in the first half of 2025, official data showed on Tuesday, as a slew of policy measures aimed at boosting consumption showed positive effects.

The growth pace was 0.4 percentage points faster than that recorded in the first three months of the year, according to the National Bureau of Statistics (NBS). Total retail sales reached about 24.55 trillion yuan ($3.42 trillion) in the January-June period.

Notably, online retail sales rose 8.5 percent year-on-year during the first half, maintaining relatively strong growth. Backed by the government's consumer goods trade-in program, retail sales of household appliances and audio-visual equipment surged by 30.7 percent, sales of cultural and office supplies were up by 25.4 percent, communication equipment sales were up by 24.1 percent, and furniture sales were up by 22.9 percent, the NBS data showed.

China has prioritized boosting spending and expanding domestic demand as a priority in this year's economic work agenda. In a broader push to bolster domestic demand, China also renewed its consumer goods trade-in program in 2025, increasing funding from last year's 150 billion yuan to 300 billion yuan through ultra-long-term special treasury bonds and extending subsidies to more electronic gadgets and home appliances, such as smartphones, tablets, and smartwatches.

"In the first half of the year, China's consumer market became more dynamic and developed in a positive direction, driven by a series of policies to expand domestic demand and promote consumption," Sheng Laiyun, deputy head of the NBS, told a press conference on Tuesday, noting that this will also support consumption development in the second half of the year.

From January to June, domestic demand contributed 68.8 percent of the country's GDP growth, with final consumption expenditure accounting for 52 percent of this contribution, making it the primary driver of economic growth, Sheng said.

The official said policies to boost consumption will continue to intensify in the second half of the year. "Regarding concerns raised earlier about consumption subsidy policies, relevant authorities have announced that new subsidy measures are being rolled out sequentially, and local governments will introduce targeted measures to promote consumption," Sheng said.

China is in a key stage of consumption upgrading, with per capita GDP stabilizing above $13,000 for two consecutive years. China has vast potential for development in terms of culture and tourism, healthcare and elder care, and the country's large population of more than 1.4 billion people is a significant advantage, according to the official.

"In addition, China's consumption level still lags behind that of developed countries, which means there is substantial room for growth. China's consumption growth potential remains strong, and its market space is exceptionally broad. Therefore, we remain optimistic about consumption in the second half of the year," Sheng said.

Wen Bin, chief economist at China Minsheng Bank, told the Global Times on Tuesday that Chinese consumers' willingness to spend has marginally improved, with household consumption propensity rising to 68.6 percent in the second quarter of this year, the highest level in recent years.

In order to effectively boost consumption, six government agencies including the People's Bank of China in June rolled out a set of 19-point guidelines targeting key areas including strengthening consumers' purchasing power, expanding financial supply in the consumption sector, unlocking household spending potential and improving the consumption environment. 

"In the next stage, domestic macro-policies are expected to focus on expanding domestic demand," Wen said. Taking fiscal policy as an example, Wen said China's remaining fiscal space for 2025 exceeds 7 trillion yuan, which will support the economy in areas including stimulating consumption, expanding investment, stabilizing foreign trade, and improving people's livelihoods.

Meanwhile, 138 billion yuan in consumer goods trade-in funds is expected to be distributed in July and October. Additionally, the authorities proposed establishing policy-based financial instruments in April, which is expected to be the most anticipated policy tool in the second half of the year, according to Wen.