Despite mounting pressure from U.S. tariffs and a lingering property market slump, China’s economy posted stronger-than-expected growth in Q2 2025, offering a surprising show of resilience amid global uncertainty.

According to official data released by the National Bureau of Statistics, China’s GDP expanded by 5.2% year-on-year in the April–June period, surpassing the 5.1% prediction made by most analysts. However, this marked a slight slowdown from the previous quarter.

Manufacturing Fuels Growth, Property Sector Stalls

The rebound was largely powered by a 6.4% surge in manufacturing, driven by heightened demand for electric vehicles (EVs), 3D printing equipment, and industrial automation technologies. China’s services industry — covering areas like transport, finance, and IT — also recorded positive performance.

Yet, signs of fragility remain. Retail sales slowed in June to 4.8%, down from 6.4% in May, signaling weak consumer sentiment. Meanwhile, new home prices dropped at the fastest monthly rate in eight months, highlighting ongoing distress in the real estate sector despite multiple policy interventions.

Exports Jump Amid Tariff Uncertainty

Experts believe part of the Q2 momentum came from a front-loading of exports, as companies rushed shipments overseas before the potential re-imposition of U.S. tariffs.

“China’s economy has shown remarkable resilience,” said Gu Qingyang, an economist at the National University of Singapore. He noted that manufacturers were racing against time, anticipating stricter trade rules from Washington.

Trump’s Trade Pressure Returns

Tensions between Washington and Beijing are once again on edge as U.S. President Donald Trump reintroduces hardline tariff threats, signaling a possible revival of the trade war. Earlier, the U.S. imposed a 145% tariff on select Chinese goods, prompting China to retaliate with a 125% levy on American imports.

While talks have temporarily paused the tariff escalation, the deadline for a comprehensive trade agreement is set for August 12. Failure to reach a deal could trigger renewed disruptions in global supply chains and investor sentiment.

Economic Outlook: Target Within Reach, But Risks Ahead

While some analysts maintain confidence that Beijing can still meet its 5% annual growth target, others are skeptical.

“There’s a high likelihood that growth may fall below target,” warned Dan Wang, China director at Eurasia Group. “But it’s unlikely to go below 4% — that’s politically unacceptable.”

To maintain momentum, experts suggest that stronger government stimulus may be required in the second half of 2025.