China’s economy expanded at a 5.4 per cent annual pace in January-March, the government says, supported by strong exports before US President Donald Trump’s rapid increases in tariffs on Chinese products.
With the trade war clouding the outlook, analysts expect the world’s second-largest economy to slow significantly in coming months, however, as tariffs as high as 145 per cent on US imports from China take effect.
Beijing has hit back at the US with 125 per cent tariffs on American exports, while also stressing its determination to keep its own markets open to trade and investment.
Chinese leader Xi Jinping’s visits is visiting several other Asian countries this week as he makes a case for free trade, presenting China as a source of “stability and certainty” in uncertain times.
Exports helped China’s economy expand at a five per cent annual rate in 2024 and 2025’s official target is about five per cent.
In the near term, the tariffs would put pressure on China’s economy, but they would not derail long-run growth, National Bureau of Statistics spokesman Sheng Laiyun told reporters on Wednesday.
He noted China’s exports to the United States had fallen to less than 15 per cent of total exports from more than 19 per cent five years ago.
“China’s economic foundation is stable, resilient and has great potential,” Sheng said, adding it had the confidence and ability to cope with external challenges and reach its development goals.
The economy grew 1.2 per cent in January-March, slowing from 1.6 per cent in the last quarter of 2024.
Chinese exports surged more than 12 per cent from a year earlier in March and nearly six per cent in US dollar terms in the first quarter, as companies rushed to beat Trump’s tariffs.
Industrial production rose 6.5 per cent from a year earlier in the last quarter, led by a nearly 11 per cent increase in output of equipment manufacturing.
The strongest growth was in advanced technologies, such as production of battery electric and hybrid vehicles, which jumped 45.4 per cent year-on-year.
Despite relatively fast growth by global standards, the Chinese economy has struggled to regain momentum since the COVID-19 pandemic as a downturn in the property market pushed unemployment higher, leaving families wary about spending.
Consumer prices fell 0.1 per cent in the first quarter, while investment in real estate also remained weak, falling nearly 10 per cent from a year earlier despite government efforts to spur more lending for housing purchases.
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