China’s Growth Holds at 5.2% as Export Rebound Offsets Trade War Tariff Pressures

China’s economy expanded at an annual rate of 5.2% in the second quarter of 2025, official data showed Tuesday, a marginal slowdown from 5.4% in Q1. 

The quarter-on-quarter growth stood at 1.1%, keeping the world’s second-largest economy on track to meet its official 5% full-year growth target.

Image Source: CCTV on X

The uptick was driven largely by stronger export demand, fueled by a temporary easing of U.S. tariffs and renewed trade negotiations. 

June exports rose 5.8% year-on-year, up from 4.8% in May, with high-tech goods, vehicles, and electrical equipment seeing double-digit gains.

However, private investment growth remained sluggish. Fixed asset investment increased just 2.8% in the first half of the year, with a notable 0.5% slowdown in June. Independent estimates suggest real GDP growth could be closer to 3.5% for the year.

Domestic demand remains weak, with consumer prices dipping 0.1% in the first half of 2025, highlighting concerns about deflation. 

Falling property prices and tepid retail activity add further pressure to China’s post-pandemic recovery.

Beijing’s efforts to diversify export destinations and boost offshore manufacturing—especially in Southeast Asia—have helped cushion the impact of tariffs imposed under U.S. President Donald Trump’s trade policy. 

But renewed tariff threats loom: failure to reach a new U.S.-China trade agreement by August 12 could trigger duties of up to 245%, potentially derailing export momentum.

As political pressure mounts to hit growth targets, analysts suggest official figures may overstate the economy’s true strength. For now, the numbers offer some relief—but the outlook remains fragile.