In the first quarter of 2025, China's economy grew by an impressive 5.4%, surprising many analysts. This growth was fueled by a boom in industrial output and a rise in retail sales as exporters rushed before U.S. tariff hikes.

China's economy is deeply influenced by ongoing trade tensions with the U.S. Tariffs imposed on Chinese goods have reached as high as 145%. This backdrop complicates China's export-driven growth model, raising fears of a slowdown.

China's industrial output surged, with a 6.5% growth in production. Manufacturers ramped up activities to fulfill export orders before the tariffs took effect, significantly impacting the overall GDP growth for the quarter.

Retail sales witnessed a 5.9% year-on-year increase in March, marking a strong consumer rebound. Government initiatives aimed at boosting demand helped improve household incomes, though the labor market remains fragile.

Despite robust growth in other sectors, China's property market is in decline, experiencing a 9.9% drop. The slump in housing prices and construction poses challenges for sustained economic momentum.

China's strong growth offers temporary relief amid trade war fears. Economists warn of a slowdown due to tariffs, prompting expectations for government stimulus measures to boost domestic demand and counteract reduced exports.

Going forward, China aims to enhance domestic demand and potentially negotiate with the U.S. As it seeks to address structural issues, China's future economic strategies will significantly shape both its economy and global markets.