China’s factories took a bit of a breather, yet they’re still showing surprising strength despite the ongoing trade tensions with the U.S. Even with the pressure, government support seems to be softening the blow.
New data from China’s National Bureau of Statistics tells us industrial production grew by 6.1% compared to last year. That’s slower than March’s 7.7%, but still better than most experts expected, beating Reuters’ prediction of 5.5%.
Tianxin Xu, a top economist, says early government spending played a big role. They call it “front-loaded fiscal support,” meaning the government stepped in early to help industries before things got worse.
“Beijing’s proactive approach helped keep things afloat in April 2025, preparing for tougher times ahead,” Xu explained.
China’s export numbers surprised some analysts recently, suggesting manufacturers are adjusting. Many have found new markets and rerouted shipments to dodge U.S. tariffs, making the most of shifting global demand.
But trouble is lurking. Xu warns that tariffs are already starting to impact orders from overseas, even if the headline numbers look okay.
“Export deliveries haven’t really grown, which is worrying despite the strong industrial output,” he said.
There was a brief positive turn last week. China and the U.S. agreed to roll back many tariffs imposed since April, starting a 90-day truce that calmed markets and sparked hope for smoother supply chains.
Fu Linghui from the National Bureau of Statistics said, “China’s trade is steady, proving its strength despite challenges. Easing tensions benefits not just China and the U.S., but the whole global economy.”
Still, experts are cautious. This truce is temporary, and with unpredictable U.S. policies, the trade war’s next moves are anyone’s guess.
China faces tariffs as high as 30%, and recent months have seen back-and-forth tariff hikes, with some goods’ duties more than doubling.
Closer to home, consumer spending is cooling. Retail sales in April rose by just 5.1%, down from March’s 5.9%, and below what analysts expected. Rising prices and economic uncertainty are making people hold back on spending.
“Consumers are feeling the pressure,” one analyst said. “Tariffs and job worries are making people cautious.”
Despite these hurdles, China’s economy is showing solid growth. GDP rose 5.4% in the first quarter of 2025, beating forecasts and boosting confidence in reaching the year’s target of around 5%. But if trade tensions flare up again or the global economy slows, keeping this momentum will be tough. Policymakers will have to juggle trade talks, domestic stimulus, and long-term plans to keep China moving forward.
Anwar Youanes is a multi-faceted professional currently serving as Director Assistant & Operations Manager at AUS Private Security PTY. LTD. (Ph: 1300 606 420, M: 0402 466 884). He is a certified Trainer & Assessor across the Security, Risk Management, First Aid, and Gaming Industries.
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