China’s economy posted a stronger-than-expected 5.4% growth in the first quarter of 2025, underlining resilient momentum despite mounting concerns over U.S. tariff threats that have led several major investment banks to downgrade their full-year forecasts for the country.
According to preliminary estimates, China’s gross domestic product (GDP) for the quarter reached ¥31.88 trillion (A$6.85 trillion), representing a 1.2% rise from the previous quarter and 5.4% year-on-year growth, surpassing market expectations of a 5.1% increase.
The National Bureau of Statistics noted that “effects of policies continued to unfold, production and supply grew fast, cultivation of new quality productive forces were accelerated, domestic demands were increasing and employment was generally stable”.
China’s leadership has set an ambitious annual growth target of around 5% for this year, a goal that may prove challenging amid rising trade tensions and continued weakness in domestic consumption.
Industrial production in March was a standout performer, with value added from enterprises above the designated size increasing 7.7% from a year earlier, far exceeding forecasts of 5.6%.
Among sectors, mining rose 6.2%, manufacturing climbed 7.1%, and utilities including electricity, gas, and water grew 1.9%.
Production of high-tech products saw substantial year-on-year increases: new energy vehicles surged by 45.4%, 3D printing devices by 44.9%, and industrial robots by 26.0%.
Retail activity also picked up strongly in March. Total retail sales of consumer goods rose 5.9% year-on-year, accelerating 1.9 percentage points from the first two months and beating expectations of a 4.2% gain.
Sales of staple and upgraded consumer goods remained robust, with grain, oil and food sales up 12.2%, daily necessities up 6.8%, and sports and recreational goods up 25.4%.
Fixed asset investment (excluding rural households) reached ¥10.32 trillion in the first quarter, increasing 4.2% from a year earlier and outpacing last year’s rate by one percentage point.
When adjusted for the real estate downturn, fixed asset investment grew by 8.3%. Notably, infrastructure investment rose 5.8%, manufacturing investment expanded 9.1%, but real estate development investment contracted 9.9%.
Unemployment remained stable, easing to 5.2%, down 0.2% points from the previous month and ahead of expectations of 5.3%.
