China’s economy defies doomsayers in H1

Trade with 190 countries in the first half of 2025

- HELMO PREUSS

CHINA'S economy defied doomsayers in the first half 2025 as its economy grew by 5.3% year-on-year (y/y) compared with the consensus forecast that it would only grow by 5.1% and above the government's target of "growth near 5%".

The doomsayers said that growth would be below 5% due to the impact of the trade war with the US, but exports in fact grew by 7.2% y/y in the first half. Chinese manufacturers rushed to export goods before additional tariffs could take effect, while at the same time diversifying exports away from the US.

In addition, imports declined by 2.7% y/y in the first half due to multiple factors, including uncertainties in global trade policies and declining commodity prices. In the first half of the year, average import prices of crude oil, iron ore and soybeans all fell more than 10% y/y. As China's economy continues to recover and improve, expanding domestic demand has helped stabilise imports. In the second quarter, imports returned to growth, driven primarily by increased volume, reflecting substantial improvement.

Net foreign trade made a positive contribution to gross domestic product (GDP) growth in the first half. Net foreign trade added 1.7 percentage points to growth, up from 1.5 points last year and contrary to the doomsayers' expectations that China's net foreign trade would detract from growth.