China surpasses growth expectations in first quarter

Image Credits: UnsplashImage Credits: Unsplash
  • China’s economy grew by 5.4% year-on-year in Q1 2025, surpassing expectations despite ongoing trade tensions and domestic challenges.
  • The IMF upgraded China's GDP forecasts for 2024 and 2025, citing strong first-quarter performance and government support measures.
  • Rising US-China trade tensions, a weakened property sector, and sluggish domestic demand pose risks to continued economic momentum.

[WORLD] China's economy grew by 5.4% year-on-year in the first quarter of 2025, surpassing analysts' expectations of 5.1%, according to official data released Wednesday. However, the quarter-on-quarter growth was 1.2%, slightly below forecasts of a 1.4% rise and down from 1.6% in the previous quarter. Although the performance surpassed projections, economic challenges persist, including a prolonged property sector slump, weak domestic demand, and intensifying trade tensions with the United States, particularly due to new tariffs imposed by U.S. President Donald Trump. Despite these headwinds, Beijing remains committed to its full-year GDP growth target of around 5% and has indicated it has sufficient policy tools to support the economy. Authorities have pledged to lower interest rates and reduce the reserve requirement ratio to sustain growth.

The International Monetary Fund (IMF) has upgraded China's 2024 and 2025 GDP growth forecasts following the strong Q1 performance. The IMF now projects a 5% growth rate for 2024 and 4.5% for 2025, up from previous estimates of 4.6% and 4.1%, respectively. The IMF attributes this revision to robust first-quarter economic data and recent policy measures aimed at stabilizing the economy. However, the IMF also cautioned that growth is expected to slow to 3.3% by 2029 due to demographic challenges and slower productivity gains.

Despite the overall positive growth figures, certain sectors continue to face significant challenges. The property sector remains a major concern, with real estate investment dropping nearly 10% in the first quarter. Additionally, consumer prices dipped 0.1%, indicating weak domestic demand. While Beijing's efforts to stimulate domestic spending—such as subsidies for auto and appliance trade-ins—have seen some success, uncertainties around the trade war and property sector remain a concern.

Trade tensions with the United States have escalated, impacting China's economic outlook. The U.S. has imposed tariffs up to 145% on Chinese goods, prompting China to retaliate with 125% tariffs on American products. UBS forecasts that if these tariffs persist, China's growth may drop to 3.4% in 2025 and 3% in 2026, with exports to the U.S. potentially falling by two-thirds.

In response to these challenges, Chinese policymakers are implementing measures to support the economy. These include lowering interest rates and reducing the reserve requirement ratio to boost liquidity. Additionally, efforts to stabilize the property sector are underway, with steps taken to steer the sector toward a more sustainable path.


United States
Image Credits: Unsplash
July 10, 2025 at 12:30:00 PM

If Trump keeps changing his mind on tariffs, why bother negotiating at all?

The 90-day clock has run out. What was once a bold declaration by the Trump administration to secure "90 trade deals in 90...

World
Image Credits: Unsplash
July 10, 2025 at 11:30:00 AM

How Western companies profit from genocide

If you strip away the flags and the press briefings, genocide looks a lot like product-market fit. Not morally—but operationally. The incentives are...

Middle East
Image Credits: Unsplash
July 10, 2025 at 11:00:00 AM

Gaza ceasefire hostage deal gains ground as Israel, Hamas signal progress

A potential turning point emerged this week in one of the world’s most entrenched conflicts. After nearly nine months of war in Gaza,...

World
Image Credits: Unsplash
July 10, 2025 at 11:00:00 AM

China exporters grapple with tariff uncertainty in 2025

There’s a reason more Chinese factory owners are watching TikTok instead of Bloomberg. And no—it’s not for the dance trends. It’s because creators...

Europe
Image Credits: Unsplash
July 10, 2025 at 10:30:00 AM

Study finds UK’s struggling high streets may need up to £5bn for revival

The UK isn’t short of shuttered storefronts. But the real vacancy is structural. A new report from the Centre for Cities lays out...

United States
Image Credits: Unsplash
July 10, 2025 at 10:30:00 AM

What Fed division on interest rate cuts signals for capital strategy

The Federal Reserve’s internal divide over the timing and rationale for rate cuts is no longer a footnote—it’s a strategic signal in its...

World
Image Credits: Unsplash
July 10, 2025 at 10:30:00 AM

China deflation and tariff policy standoff rattles Hong Kong markets

At first glance, Hong Kong’s markets appear calm. The Hang Seng Index dipped less than 0.1% by mid-morning Thursday, and the tech-heavy subindex...

Malaysia
Image Credits: Unsplash
July 10, 2025 at 10:30:00 AM

The real story behind Malaysia’s SST expansion

While public debate on Malaysia’s expanded sales and service tax (SST) has intensified since July 1, most commentary misses the point. This is...

Singapore
Image Credits: Unsplash
July 10, 2025 at 10:00:00 AM

Singapore shares rise again as STI gains 0.3%

The July 9 session offered a striking juxtaposition: Singapore’s benchmark Straits Times Index (STI) nudged upward even as the White House confirmed new...

World
Image Credits: Unsplash
July 10, 2025 at 10:00:00 AM

Pharma sector braces for fallout from Trump tariff threat

The pharmaceutical industry is staring down a policy signal it has never encountered: a proposed 200% tariff on imported drugs by 2026, paired...

Europe
Image Credits: Unsplash
July 10, 2025 at 10:00:00 AM

France and U.K. float extended nuclear protection for Europe

As Washington drifts deeper into domestic polarization and 2024's Trump resurgence looms, two of Europe’s nuclear powers—France and the UK—are beginning to signal...

Malaysia
Image Credits: Unsplash
July 10, 2025 at 9:30:00 AM

Malaysia stock market moves sideways as tariff anxiety grows

When a stock index trades sideways, it’s easy to call it boring. But boring is a strategy—and right now, the FBM KLCI is...

Load More