Latest report from KPMG: Domestic economy achieves "red hot start" as policies intensify responses to uncertainties.

KPMG China recently released the "China Economic Observation Report for the Second Quarter of 2025". The report mentioned that in the first quarter, the Chinese economy achieved a "good start". On the one hand, it benefited from domestic policy pre-positioning, with strong resilience in household consumption and corporate investment. On the other hand, the enthusiasm for companies to "grab exports" was high, boosting first-quarter export performance. Domestic demand is recovering, foreign demand is strengthening, and domestic production activity is also rebounding simultaneously. Looking ahead to the next stage of China's economic performance, the report suggests that companies, based on concerns about long-term supply chain risks, may accelerate "grabbing exports" in the remaining two months. In addition, the outlook for the current domestic real estate market remains uncertain, with prices still fluctuating at low levels. It is expected that future incremental policies will continue to support consumption and infrastructure. With all these factors combined, domestic production is expected to remain strong in the second quarter.