Statistical agencies say the economy is “officially off to a good start” despite the more complex and serious external environment.
China’s economy rose 5.4% between January and March, the country’s statistics bureau said exporters were preparing for the tariff fallout punished by President Donald Trump, which is causing stronger performance than expected.
The National Statistics Bureau said on Wednesday that industrial output rose 6.5%, the largest profit for the individual sector, while the services sector expanded by 5.3%.
Retail sales and agricultural production increased by 4.6% and 4.0% respectively.
“The national economy was off to a good start, and high quality development was moving forward with new and positive momentum,” the Bureau of Statistics said.
Nevertheless, China’s economy faces a more “complex and serious” external environment, with “the basis for sustainable economic recovery and growth still not integrated,” the Statistics Bureau said.
The economic figure is because the two world’s largest economies, the United States and China, are trapped in a trade war that threatens to shake the foundations of the global economy.
“Since they are very positive, mainly based on exports, we hope that the second quarter will go much worse,” Alicia Garcia Herero, chief economist in the Asia-Pacific in Natixis, Hong Kong, told Al Jazeera.
Trump struck China with a 145% tariff, but opened the door to further trade some of its biggest exports, including semiconductors and key minerals.
China has retaliated with a 125% obligation on US goods and has pledged to “fight to the end” if Washington continues to expand its trade salvo.
Lin Song, ING’s China’s large economist, said in a memo that Beijing is likely to roll out more financial and fiscal stimulus packages to reach its 2025 growth target at around 5%.
“The economy is off to a much-needed, strong start in 2025 as second quarter growth is likely to be a hit from the rapid escalation of President Trump’s trade war,” Song said.