Space News from SpaceDaily.com
China's forecast-beating growth belies storm clouds ahead: analysts
ADVERTISEMENT


Beijing, April 16 (AFP) Apr 16, 2025
Forecast-beating growth in China's first quarter may have offered Beijing's economic planners some much needed good news -- but analysts warn they should strap in for tariff-induced woes further down the line.

The National Bureau of Statistics said Wednesday the world's number-two economy expanded 5.4 percent on-year in January-March, helped by a surge in exports.

However, observers said the bulk of that came from "frontloading" as business rushed to ship goods out of the factory before Donald Trump's trade blitz kicked in.

And while state efforts to boost lagging consumption -- for months a drag on growth -- played a role in the growth boost, the outlook remained uncertain.

"It's too early to interpret this strength as a sign of lasting market recovery," Yue Su at the Economist Intelligence Unit told AFP.

"The strong performance has been driven by trade frontloading ahead of anticipated tariffs and a policy-driven rebound in consumption -- particularly in electronics and home appliances," she added.

Tit-for-tat exchanges have seen US levies imposed on China rise to 145 percent, and Beijing setting a retaliatory 125 percent toll on imports from America.

Trump has said the ball is in China's court if it wants to find a way out and Beijing has, in turn, vowed to "fight to the end" in a trade war that shows few signs of letting up.

But Beijing's gung-ho rhetoric belies deep concerns about the impact that Trump's tariffs could have on the deeply export-dependent Chinese economy.

"The escalation happening in April is going to be felt in the second-quarter figures as the tariffs will send stateside firms looking to other suppliers, impeding Chinese exports and slamming the brakes on investment," Heron Lim, an economist at Moody's Analytics, told AFP.

"This will hit electronics makers and exporters the hardest, as their products dominate China's US-bound exports," he said.

And Louise Loo at Oxford Economics warned that "the improvement in growth momentum is very likely to be short-circuited in the coming months by the incoming headwinds of punitive tariffs".

- More macro please -


China on Wednesday admitted that the global economy was becoming more "complex and severe" -- and that tariffs were putting "pressure" on trade.

A top economic planner also stressed that more "proactive and effective macro policies" would be needed to boost growth.

Beijing last year announced a string of aggressive measures to reignite the economy, including interest rate cuts, cancelling restrictions on homebuying, hiking the debt ceiling for local governments and bolstering support for financial markets.

After a blistering market rally fuelled by hopes for a long-awaited "bazooka stimulus", optimism waned as authorities refrained from providing a specific figure for the bailout or fleshing out any of the pledges.

But as a potentially crippling trade war looms, analysts agree that Beijing may finally feel pressed to do more to boost domestic spending and tariff-proof the economy.

A debt crisis in the property sector -- long a major drag on broader consumer sentiment -- remains a crucial handicap for the economy.

"Throwing the domestic economy a lifeline is more important than ever before," Sarah Tan of Moody's Analytics said.

"The cratering property market remains front and centre of households' concerns," she added.

"Combined with the shaky labour market, falling house prices are giving households good reason to prioritise saving over spending."

Insights into how that stimulus could work could emerge from an expected meeting of China's Politburo, its ruling party Communist Party's top decision-making body.

"We continue to anticipate a $2 trillion stimulus package focused on consumption, infrastructure, urban renewal, and shantytown renovation," said Su at the Economist Intelligence Unit.

"Challenges to China's economy remain significant over the coming quarters."


ADVERTISEMENT





Space News from SpaceDaily.com
UK opens competitive bid for GBP 75 million orbital cleanup mission
UK invests $191 mn in European satellite firm Eutelsat
Bearings Used in Space Technologies: Engineering for the Final Frontier

24/7 Energy News Coverage
Atomic 6 receives 2M Space Force award to advance next generation solar arrays
ESA and Neuraspace develop autonomous satellite navigation technologies
Planet secures 240 million euro satellite services contract with German government

Military Space News, Nuclear Weapons, Missile Defense
France says Australia defence ties repaired after submarine row
Trump: U.S. to send Patriot missiles to Ukraine, EU to pay bill
Ukraine, Russia trade blows in escalating spy war

24/7 News Coverage
Ancient zircon data reveals tectonic origin of Earth's first continental crust
Autonomous sub explores unexplored trench depths to reveal critical mineral clues
Europe launches first geostationary atmospheric sounder to boost extreme weather forecasts



All rights reserved. Copyright Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.