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China’s demand rebound in 2025 is reinvigorating global commodity markets and stabilizing prices.
After a period of cooling industrial output and subdued global exports, China’s economy in mid-2025 is demonstrating a fragile but positive offset to external challenges. GDP growth is projected between 3% and 4.5%, supported by targeted stimulus and strategic debt expansion.
While manufacturing momentum has softened, resilient domestic consumption patterns—especially within the services and retail sectors—is emerging as the primary growth driver. Youth unemployment, though improving, remains elevated, underscoring the need for continued policy support to maintain social stability and consumer spending.
Retail sales surged by 6.4% year-on-year growth in May, marking the fastest growth since 2023. Year-to-date figures show a steady 5% increase, fueled by aggressive stimulus measures.
Despite lingering negative wealth effects and cautious consumer sentiment, government-issued coupons and trade-in policies have driven selective spending, especially in high-ticket items and leisure categories.
After six consecutive months of decline, industrial enterprise profits began recovering in March 2025, signaling an early-stage rebound. The Manufacturing Investment Outlook (MIO) has been revised to 2.9% growth for the year, up from 2% in 2024, with a potential 3.4% CAGR through 2029.
Construction equipment, a bellwether for infrastructure activity, saw domestic excavator shipments climb by 38.3% year-on-year increase in shipments in the first quarter, reflecting robust government-backed infrastructure spending.
China’s agricultural import patterns are evolving. Bulk grain imports are contracting as domestic production and strategic reserves stabilize. The USDA has sharply reduced its corn and wheat import forecasts for the 2024/25 season, reflecting a more selective approach to procurement.
This shift underscores a broader move toward value-driven and quality-focused acquisitions, as China balances self-sufficiency goals with targeted international sourcing.
As the world’s largest commodity consumer, China’s demand trajectory directly influences global pricing across metals, energy, and agricultural markets. The recent upswing in Chinese demand has stabilized iron ore and copper prices, while the energy complex is adjusting to renewed import requirements.
International suppliers and traders are revising supply chain strategies, anticipating further demand fluctuations tied to China’s domestic policy adjustments and external trade tensions.
Policymakers have deployed a combination of fiscal and monetary tools to sustain momentum. Key measures include consumer-oriented incentives, such as consumer coupons and trade-in policies for autos and appliances, alongside infrastructure and construction sector subsidies aimed at machinery upgrades.
Local governments have also accelerated spending on public works, bolstering demand for steel, cement, and heavy equipment, which in turn supports the mining and metals sectors.
Despite encouraging signs, the recovery remains precarious. Structural headwinds and external risks pose significant challenges:
Looking ahead, China’s commodity demand is expected to be more selective, favoring high-value and cyclical segments, while bulk-driven expansion becomes less dominant. Innovation-led growth and environmental considerations will also shape future commodity consumption patterns.
In summary, China’s demand revival is anchoring a broader stabilization in global commodities, offering a glimmer of optimism amid geopolitical uncertainties. However, the path forward will be defined by a delicate balance between stimulus support, structural reform, and global market dynamics.
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