China’s economy grew faster than expected in the first quarter of the year, with a 5.4 per cent expansion driven by robust industrial output and domestic consumption — a performance that economists warn may prove short-lived as US tariffs begin to bite.
The stronger-than-forecast GDP figures, released by Beijing on Tuesday, showed that the world’s second-largest economy continued to defy global headwinds in the January-March period. Analysts had expected 5.1 per cent growth, making the actual outturn a welcome surprise. However, it came just weeks before a 145 per cent US tariff on Chinese goods took effect, as President Donald Trump intensifies a trade war that many fear could trigger a wider global slowdown.
The quarterly growth figure matched that of the final quarter of 2024, suggesting China had maintained economic momentum despite persistent deflationary pressures and concerns over unemployment. A rush of exports ahead of tariff deadlines contributed to the resilience, as manufacturers expedited shipments to beat the US levies.
Retail sales — a key barometer of domestic consumption — rose 5.9 per cent year-on-year in March, accelerating from 4.8 per cent across January and February. Meanwhile, industrial output surged 7.7 per cent in March, up from 5.9 per cent in the first two months, as production ramped up in anticipation of new trade barriers.
“Before the tariff storms hit, China’s GDP growth likely eased but remained solid, thanks to the recovery in domestic demand,” said analysts at Societe Generale. “Overall, the GDP report should show that stimulus is working, but the support will not stop here with bigger tariff challenges ahead. The policy put is on.”
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