China’s GDP grew above expectations in Q1 ahead of anticipated impact from US tariffs

China’s economy grew faster than expected in the first three months of the year, with solid industrial production and consumption, being main contributors to upbeat Q1 results.

Gross domestic product grew 5.4% in the first quarter from a year earlier, unchanged from the fourth quarter of 2024, but beat expectations for 5.2% rise.

However, analysts remain very cautious and expect that US tariffs, which pose the biggest risk for the world’s second largest economy, could significantly slow economic activity in coming months.

President Donald Trump has lifted tariffs on Chinese goods to 125%, prompting an equal response from Beijing that raises fears of consequences of trade war between the world’s two biggest economies.

Economic data from April are expected to show immediate impact of trade war, with significant slowdown in growth momentum anticipated, though China is likely to add more support measures to partially offset the negative impact, as tariffs come on top of persisting property fallout.

Economists agree that the recent government stimulus has helped in boosting consumption and investments but expect more measures to be introduced to grapple with growing threats from US trade tariffs.

China’s $ 1 trillion trade surplus in 2024 underpinned growth and countered negative impact from weaker domestic demand and property sector slump and keeping economic recovery on the right track, but officials warn of more bumpy road this year, with expectations for economic growth being lowered to 4.5% / below 4.00% in 2025 compared to 5.0% expansion last year and also below consensus for 5.0% growth.