China’s economy grew more than expected in the second quarter, even as it faces mounting pressure from U.S. tariffs and ongoing instability in the property sector.
Official data released Tuesday show the world’s second-largest economy expanded by 5.2% year-on-year in the April-to-June period. That’s slightly above economists’ forecasts of 5.1%, though still slower than growth in the previous quarter.
Despite the challenges, China has so far managed to avoid a sharper downturn. Analysts credit this resilience to targeted stimulus measures from Beijing and a fragile trade truce with Washington.
“The economy withstood pressure and made steady improvement despite challenges,” China’s National Bureau of Statistics said in a statement.
Key Drivers of Growth
The manufacturing sector led the charge, growing by 6.4% on the back of strong demand for 3D printing devices, electric vehicles, and industrial robots. The services sector—including transport, finance, and tech—also contributed to the expansion.
However, some indicators reveal soft spots. Retail sales in June grew by just 4.8%, slowing from 6.4% in May, while new home prices dropped at their fastest monthly pace in eight months, underscoring continued weakness in the real estate market.
External Pressures and Trade Tensions
China’s export performance provided a temporary boost, as companies rushed shipments ahead of potential new tariffs from the U.S.
“Many expected a bigger drag from tariffs, but China remains highly resilient,” said Gu Qingyang, economist at the National University of Singapore. “The second half, however, will bring more uncertainty.”
President Donald Trump’s administration recently imposed a 145% tariff on Chinese imports, prompting Beijing to respond with a 125% duty on select U.S. goods. While those tariffs are currently paused following international negotiations in Geneva and London, the clock is ticking. A final trade agreement must be reached by 12 August to avoid renewed escalation.
