Overview

• China's economy grew 5.4% year-on-year in Q1 2025, surpassing forecasts of 5.1%, with retail sales up 5.9% and industrial output rising 7.7%.
• The growth reflects strong domestic demand and an export surge in March, as factories rushed shipments ahead of steep U.S. tariff hikes.
• U.S. tariffs on Chinese goods have reached 145%, with Beijing retaliating at 125%, heightening concerns about significant export slowdowns.
• Analysts predict China's annual growth could drop below its 5% target, with some revising forecasts as low as 3.4% for 2025.
• China's government is under pressure to implement additional fiscal and monetary stimulus to counteract the trade war's economic impact.