China’s economy grew faster than expected in the second quarter of 2025, even as U.S. tariffs and a prolonged property crisis continued to pose significant challenges to the country’s recovery.
Official data released on Tuesday by the National Bureau of Statistics showed that the world’s second-largest economy expanded by 5.2% year-on-year in the April-June period. While slightly lower than the 5.3% recorded in the previous quarter, the growth rate still surpassed economists’ expectations of 5.1%, highlighting China’s resilience amid global and domestic pressures.
“The economy withstood pressure and made steady improvement despite challenges,” the bureau said in a statement.
Growth was largely driven by a 6.4% year-on-year expansion in manufacturing, particularly in advanced industries such as 3D printing, electric vehicles, and industrial robotics. The services sector, covering transport, finance, and tech, also contributed to the overall performance, though consumer demand showed signs of fatigue.
Retail sales rose 4.8% in June compared to the previous year, a slowdown from May’s 6.4% growth, suggesting waning momentum in domestic consumption. Meanwhile, the country’s property sector remains a key drag on the economy. New home prices fell in June at the fastest pace in eight months, indicating continued weakness in the real estate market despite repeated government interventions.
China’s economic performance comes against a backdrop of renewed trade tensions with the United States. President Donald Trump’s administration has imposed steep tariffs—up to 145%—on Chinese goods, while Beijing responded with duties of up to 125% on American imports. Although both sides agreed to pause further tariff action following talks in Geneva and London, the truce is fragile, with a deadline of August 12 to reach a comprehensive agreement.
Despite these headwinds, analysts say China’s export sector has remained robust. Firms have reportedly been accelerating shipments ahead of any potential new tariffs or changes to trade policies, helping to boost second-quarter figures.
Gu Qingyang, an economist at the National University of Singapore, noted that while the economy has proven “highly resilient,” uncertainty looms in the second half of the year. “Stronger government stimulus might be needed. That said, achieving the 5% annual growth target still seems well within reach,” he said.
Others remain more cautious. Dan Wang, director for China at Eurasia Group, told the BBC that while Beijing will likely defend a “politically acceptable floor” of 4% growth, missing the official 5% target is a real possibility unless global and domestic conditions improve.
As China navigates its economic crossroads, the government is expected to step up fiscal and monetary support while continuing trade negotiations with Washington and other global partners.
