China’s economy showed further signs of expansion in August 2025, according to the latest data from the National Bureau of Statistics. At the same time, a series of new regulations came into effect on September 1, reshaping areas including education, consumer finance, pensions, and farmland protection. Together, these indicators and policies highlight both the resilience of China’s economy and its evolving regulatory landscape.
PMI Data: Signs of Expansion
- Manufacturing PMI: 49.4% (+0.1 MoM)
- Non-Manufacturing PMI: 50.3% (+0.2 MoM)
- Composite PMI: 50.5% (+0.3 MoM)
Sectors such as general equipment, railways, shipbuilding, and aerospace all reported strong outlooks, with activity expectation indices above 58%. This signals improving confidence and ongoing industrial recovery.
New Regulations Effective September 1
Several key policies officially took effect:
- Free Preschool Education: Public kindergartens must waive childcare and tuition fees.
- Consumer Loan Subsidies: Between Sept 2025 and Aug 2026, personal consumer loans will receive fiscal interest subsidies.
- Pension Reform: Three new conditions for personal pension withdrawals were added, strengthening China’s pension system.
Additionally, the Permanent Farmland Protection Red Line policy will take effect on October 1, 2025, ensuring stricter farmland protection to safeguard food security and support sustainable development.
Capital Market Dynamics
Next week, 29 A-share listed companies will see share lock-up expirations, totaling 2.01 billion shares with a market value of about 188.8B RMB.
The Shanghai Stock Exchange reported that in H1 2025, listed firms recorded 24.68T RMB in revenue and 2.39T RMB in net profit, underscoring market resilience.
In the ETF market, total assets on the Shanghai exchange surpassed 3.7T RMB, with stock ETFs accounting for 2.6T RMB. Year-to-date, net inflows exceeded 350B RMB, making broad-based ETFs like CSI 300, CSI A500, and SSE 180 investor favorites.
Fund and Insurance Trends
Public fund managers revealed hidden heavy positions, with notable moves such as Zhang Kun trimming Meituan while adding Beike, and Ge Lan increasing stakes in innovative drug and device companies like I-Mab.
Chinese insurers are shifting more assets into equities, with five listed insurers significantly increasing their stock allocations, reflecting stronger confidence in long-term growth.
Global Market Sentiment
Foreign institutions remain optimistic:
- Goldman Sachs maintains an “Overweight” rating on Chinese equities.
- Standard Chartered upgraded China to “Over-allocated” in its H2 2025 outlook.
Meanwhile, actively managed equity funds in China delivered an average 23.8% return in the first eight months of 2025, with 603 funds gaining over 50%.
IPO Momentum in Hong Kong
- Hesai Technology passed HKEX review, with Q1 2025 net income up 46.3% YoY to 525M RMB.
- Hefei Jingce Microelectronics and Qingsong Health Group also filed for IPOs, signaling continued investor appetite for innovative companies.
Conclusion
With expanding PMI indices, new regulations reshaping education, finance, and pensions, and capital markets showing resilience, China’s economy demonstrates both growth momentum and structural transformation. Policy reforms and market developments together highlight the country’s path toward high-quality, sustainable development.
