China's GDP grows 5.3% in H1 despite global headwinds

Express Tribune

7 days ago

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Defying all predictions, China's economy grew by 5.3% year-on-year in the first half of 2025, according to preliminary data released by the National Bureau of Statistics (NBS), as Beijing rejigged its trade strategy in the wake of US President Donald Trump's tariff offensive.
Beijing stayed ahead of the curve and outmanoeuvred the trade assault by reconfiguring supply chains, broadening its export footprint beyond US markets and shoring up domestic demand to keep growth on track.
The overall size of GDP reached 66,053.6 billion yuan ($9.1 trillion), demonstrating China's resilience despite global economic headwinds. The 5.3% GDP growth was higher than the average prediction of 5.1% made by 40 economists interviewed by Reuters.
"This is a hard-won achievement, particularly considering the sharp fluctuations in the international situation and heightened external pressures since the second quarter," said NBS Deputy Commissioner Sheng Laiyun. He credited the "highly valuable" numbers to stable progress in the implementation of macro-policy, industrial growth topped by high-tech industries and 68.8% from domestic demand.
The breakdown shows that the primary industry contributed 3,117.2 billion yuan, with a YoY increase of 3.7%, driven mainly by stable production in agriculture. The secondary industry accounted for 23,905 billion yuan, up 5.3%, and the services sector witnessed the highest growth, contributing 39,031.4 billion yuan, up 5.5%.
China's GDP grew 5.4% YoY in the first quarter and 5.2% in the second, showing steady economic momentum despite the global turmoil spawned mainly by Trump's trade tariffs. The manufacturing sector continues to be the engine of China's economic growth. Industrial output grew 6.8% YoY in June, a sharp pickup from May's 5.8% growth.
High-tech industries, new-energy cars and robotics industries were the main drivers of growth, showing the country's strategic focus on technological independence and industrial upgrade. "China will still pursue high-level self-reliance and strength in science and technology," said Wen Bin, Chief Economist of China Minsheng Bank. He believes new schemes, such as the science and technology bond board and associated financial instruments, would further boost tech-led development.
High-tech production rose by 9.7% in June, contributing to overall industrial growth. Industries like electric vehicles (EVs), lithium batteries and high-end machinery are witnessing consistent demand both locally and globally.
The Chinese government has been promoting industrial innovation through subsidies that target specific sectors, tax breaks and investment incentives, further cementing the sector's growth. "Booming industries, especially the use of digital and green technologies, drove tremendous breakthroughs across industries — illustrating the pace of the nation's technological advances," said Peking University Economist Cao Heping.
Despite ongoing global trade uncertainties, Chinese exporters have benefited from reviving international demand and a short-term trade truce with the US. In June 2025, exports expanded by 5.8% YoY, after a 4.8% rise in May. This is the best export growth since mid-2024.
Hu Qimu, Deputy Secretary-General of the Forum 50 for Digital-Real Economies Integration, told Xinhua: "The first-half GDP growth reflects the strong resilience of China's economy, underpinned by its comprehensive industrial system and vast market capacity."
China's total exports went up by almost 6% in the first half of 2025, ensuring a healthy trade surplus of about $586 billion. Exports to Southeast Asia shot up by 16.8% YoY, showing the country's increasing trade partnership with regional members via agreements like the Regional Comprehensive Economic Partnership (RCEP).
China's huge domestic market remains a pillar, supporting long-term economic expansion. Retail sales rose 4.8% in June, after higher 6.4% gains in May. The moderation is attributed by analysts to a mix of risk-averse consumer behaviour and gradual rebalancing in the real estate market.
Still, policy measures to spur consumption, such as subsidies for environmentally friendly appliances, electric cars, and rural revitalisation measures, are helping to support it. The introduction of "trade-in" programmes for home appliances and incentives for car replacements have moderated some consumers' wariness.
The services sector also recorded a good 5.5% expansion in the first half, reflecting steady demand across segments like transport, finance, health care and internet services. The services industry now represents virtually 60% of China's GDP, highlighting the nation's shift to a more consumption- and services-based economy.
The policymakers have used a cautious yet bold strategy to maintain economic growth. The People's Bank of China (PBoC) slashed interest rates earlier this year and pumped in liquidity to stimulate lending and spur business activity.
Targeted fiscal policies have aimed at upgrading infrastructure, high-tech industry, and small- and medium-sized enterprises. China has given emphasis to structural change and specific interventions. "China's economic performance this year is a visible rebound and upturn — owing primarily to more solid macroeconomic policies, pointing to a string of monetary easing measures — and a significant boost in fiscal spending," writes Xi Junyang, Professor at Shanghai University of Finance and Economics.
International economists are of the view that this strategy demonstrates faith in the intrinsic health of the economy and avoids over-expansion of credit. Considering the Chinese economy's stable path, a number of global financial institutions such as Goldman Sachs, Deutsche Bank and Morgan Stanley have now upped their projections for the country's economic growth rate in 2025.
Local authorities have been given the ability to speed up infrastructure expenditure and bring forward strategic projects, such as digital economy centres and renewable energy facilities, further supporting growth. The provisional trade truce with the US, reached in May 2025, has brought welcome relief for Chinese exporters.
Analysts foresee a YoY growth in the 5-5.2% range, slightly higher than the government's official target. They believe China's push for high-quality, innovation-based growth is setting the foundation for long-term development. The government's measures to spur domestic demand, promote green technologies, and stabilise property markets are seen supporting the economic momentum.
The writer is a student and independent contributor