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China's Economic Growth Slows as Trade War and Property Slump Bite

First-quarter GDP growth is forecast to drop to 5.1%, prompting Beijing to prepare new stimulus measures to counter escalating U.S. tariffs and domestic challenges.

Visitors pose for photos at a lookout in Yangshan Port outside of Shanghai, China, April 15, 2025. REUTERS/Go Nakamura/File Photo
Image
Gantry cranes stand near shipping containers at Yangshan Port outside of Shanghai, China, April 15, 2025. REUTERS/Go Nakamura/File Photo
An employee works on the electric vehicle (EV) production line at the Zeekr factory in Cixi, Zhejiang province, China March 19, 2025. REUTERS/Florence Lo/File Photo

Overview

  • China's Q1 GDP growth is projected to slow to 5.1%, down from 5.4% in Q4, as the economy faces a prolonged property downturn and rising U.S. tariffs.
  • President Donald Trump's steep tariff hikes on Chinese goods, matched by Beijing's retaliatory measures, are intensifying trade tensions and threatening global economic stability.
  • UBS has downgraded China's 2025 growth forecast to 3.4%, citing the prolonged impact of tariffs and the need for further economic adjustments.
  • Fitch Ratings recently lowered China's sovereign credit rating, highlighting concerns over rising government debt and public finance risks.
  • Chinese policymakers, led by Premier Li Qiang, are preparing additional fiscal and monetary stimulus to stabilize the economy and bolster domestic demand.