Chinese economy bucks looming trade war to post Q2 GDP growth of 5.2%

Yahoo

10 hours ago

July 15 (UPI) -- China's economy slowed in the second quarter but bucked expectations of a larger slowdown in the face of U.S. tariffs, a property market slump and a sluggish global economy, official figures out Tuesday show.
Annual GDP growth came in at 5.2% in the April to June quarter compared with 5.4% in the first quarter, the National Bureau of Statistics said in its latest bulletin on the national economy.
"The national economy withstood pressure and made steady improvement despite challenges. Production and demand grew steadily, employment was generally stable, household income continued to increase, new growth drivers witnessed robust development and high-quality development made new strides," the bureau said.
The economic performance was bolstered by strong industrial output growth of 6.4%, led by manufacturing and mining. Production of 3D printing devices, electric vehicles and industrial robots, in particular, posted huge year-on-year growth of 43.1%, 36.2% and 35.6%, respectively.
Industrial growth accelerated toward the end of the quarter, jumping to 6.8% in June compared with 5.3% in June 2024, and up 0.50% from May.
The services sector was another bright spot for the world's second-largest economy with industries including software and IT services, transport and finance all recording stronger than average growth
Annual retail sales growth, however, slowed to 4.8% in June compared with 6.4% in May.
The country's crisis-hit real estate sector, which accounts for as much as a quarter of GDP, remained under pressure with a slump in investment deepening, down more than 11% compared with just over 10% in the same period in 2024.
Standard Chartered economist Shuang Ding said the Chinese economy may not prove as resilient in the second half of the year as it had been thus far in 2025 due to an uplift from efforts to get goods to the United States ahead of the imposition of tariffs, as well as economic stimulus from the government in Beijing.
"There will be some headwinds. Higher tariffs will take a toll on China's exports," Ding told the Financial Times.
Chinese exporters may have seized on a window of opportunity provided by a series of pauses by the Trump administration in implementing reciprocal tariffs announced April 2 to get as much product stateside before the ax falls.
However, China's previously heavily U.S.-dependent economy may already have adapted to the post-trade tariffs reality with the proportion of U.S. trade accounted for by China falling to 5.9% in May, its lowest level since 2002, according to U.S. Census Bureau figures.
Analysis of the figures by Forbes Magazine found U.S. imports from China fell almost 28% in the first five months of the year compared with the same period in 2018, but that there was a corresponding jump in imports from the rest of the world of more than 47%.
China has gone from being the United States' largest trading partner to its third, behind Mexico and Canada.
The huge drop may signal a wholesale effort by Chinese manufacturers to shift operations elsewhere to avoid the impending trade tariffs on China -- or simply an acceleration to triple-digit levels of imports from countries like Vietnam, Taiwan, South Korea and Mexico that was happening anyway.