Wed Apr 16 07:28:42 UTC 2025: ## China’s Economy Shows Strong First Quarter Growth Despite Looming Trade War

**Bangkok, April 16, 2025** – China’s economy expanded by 5.4% year-on-year in the first quarter of 2025, fueled by a surge in exports ahead of anticipated US tariff increases. However, analysts predict a significant slowdown in the coming months due to escalating trade tensions between China and the United States.

The strong first-quarter performance was driven by a more than 12% year-on-year increase in Chinese exports in March, as companies rushed to ship goods before the implementation of US tariffs as high as 145% on some Chinese imports. This preemptive activity boosted manufacturing, particularly in advanced technologies like electric vehicles and 3D printing, which saw significant growth.

Despite the initial strong numbers, concerns remain about the long-term impact of the trade war. China’s exports to the US have already fallen to less than 15% of total exports, down from over 19% five years ago. The ongoing trade dispute has led to retaliatory tariffs from Beijing, impacting American exports. Furthermore, a weakening property market and subdued consumer spending are hindering economic momentum. Consumer prices even fell 0.1% in the first quarter, suggesting weak demand.

While Chinese officials remain optimistic, emphasizing the country’s economic resilience and potential, economists hold more cautious views. UBS, for example, has lowered its growth forecast for China to 3.4% for 2025 and 3% for 2026, citing the potential for a two-thirds drop in US-bound exports due to the tariffs. The IMF and Asian Development Bank, however, maintain more optimistic projections of around 4.6% growth for this year.

Amidst the uncertainty, Chinese President Xi Jinping is touring several Asian countries, promoting free trade and presenting China as a stable economic partner. The US has also dispatched a senior State Department official to several Asian capitals, reflecting the heightened geopolitical stakes. China is actively diversifying its trade relationships, showcasing its market and manufacturing capabilities at various trade fairs. Beijing continues to implement measures to stimulate consumer spending and private investment, including subsidies and increased funding for struggling industries. However, the ultimate impact of the trade war remains uncertain, depending heavily on the evolving policies of the US administration.

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