China Defies Expectations with Strong Economic Growth Amidst Tariff Threats
In a surprising turn of events, China has shown robust economic growth in the first quarter of 2025, defying the looming threat of US President Donald Trump’s tariffs.
Gross domestic product (GDP) expansion reached 5.4% in the first quarter, surpassing the predictions of over 50 economists surveyed by Reuters who had anticipated a growth rate of 5.1%. This unexpected surge continues the trend of strong export-driven growth that was observed towards the end of 2024.
Sheng Laiyun, deputy director of the National Bureau of Statistics (NBS), emphasized the positive start of the national economy during a news conference. However, he also acknowledged the challenges posed by a complex external environment and insufficient domestic demand growth momentum.
Amidst escalating trade tensions with the United States, China’s economic performance remains a focal point. The country grapples with longstanding issues such as a property crisis, price instability, and consumer spending reluctance.
The data released by the NBS only captures the first quarter’s growth, a period marked by significant developments in US-China trade relations. Trump’s imposition of two rounds of tariffs, totaling 20%, during this timeframe has yet to reflect in the figures.
Despite the impact of existing tariffs, Sheng reiterated China’s resilience in the face of external challenges. He emphasized the nation’s stable economic foundation and expressed confidence in achieving established development goals.
While Beijing set a bold growth target of “around 5%” for the year, economists remain cautious about its feasibility. UBS economists have revised their growth forecast to 3.4% for 2025, citing the unprecedented challenges posed by tariff shocks.
Goldman Sachs echoed concerns about the adverse effects of US tariffs on China’s economy, leading to a downgrade in GDP growth forecasts for the coming years. The economic landscape remains uncertain as both nations navigate the complexities of trade disputes.
