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China’s Q2 GDP Climbs 5.2% as Exports Mask Domestic Weakness

Policy makers are weighing fresh stimulus measures to counteract mounting consumption weakness coupled with a deepening property slump alongside accelerating deflation ahead of a late-July Politburo meeting

An earth mover transports soil at a construction site in Beijing, China, Friday, July 11, 2025. (AP Photo/Mahesh Kumar A.)
Image
Shipping containers and gantry cranes are seen at the Yantian port at night in Shenzhen, in southern China's Guangdong province on April 14, 2025. Markets on April 14 welcomed a US tariffs reprieve for electronics, but President Donald Trump warned no country would get "off the hook" in his trade war -- especially China. (Photo by JADE GAO / AFP) (Photo by JADE GAO/AFP via Getty Images)
A woman takes a selfie with gods of fortune displayed outside a store selling prosperity items at a shopping mall, in Beijing, Monday, July 14, 2025. (AP Photo/Andy Wong)

Overview

  • Official data show China’s GDP expanded 5.2% year-on-year in the second quarter, edging above Reuters forecasts and sustaining a 5.3% pace for the first half of 2025.
  • A mid-May US-China tariff truce lowered duties on Chinese goods and spurred front-loaded export gains, though momentum may falter after the August deadline.
  • Retail sales growth slowed to 4.8% in June from 6.4% in May, underscoring soft domestic consumption despite ongoing subsidy programs.
  • Property investment plunged 11.2% in the first half, marking a new low for the sector and dragging on overall economic growth.
  • Producer prices fell at their fastest rate in nearly two years in June, heightening deflationary risks that policy makers will address at a late-July Politburo meeting.