China’s GDP grew by 5.3 percent year-on-year in the first half of 2025 to 66.05 trillion yuan ($9.22 trillion), the National Bureau of Statistics said on Tuesday, signaling resilience against U.S. tariffs. Despite the expansion, analysts warned that weak domestic demand and rising global trade risks will intensify pressure on Beijing to roll out further stimulus.
Data on Tuesday showed China’s GDP grew 5.2 percent annually in the April-June quarter, slowing from 5.4 percent in the first quarter. On a quarter-on-quarter basis, China’s economy expanded by 1.1 percent in the second quarter of the year, the NBS said.
Market awaits new stimulus announcements
The world’s second-largest economy has so far avoided a major slowdown as factories ramped up exports during the U.S.-China trade truce. However, investors expect a weaker second half as tariffs hit exports, prices continue to fall and consumer confidence remains low.
Investors are now closely watching for signs of fresh stimulus at the upcoming Politburo meeting in late July, which is likely to shape economic policy for the remainder of the year.
“With H1 real GDP growth averaging 5.3 percent y/y, we do not think policymakers have the urgency to launch broad-based, significant stimulus at the July Politburo meeting. Instead, we expect incremental, targeted easing to help stem the property downturn and mitigate labor market pressures in H2,” said Lisheng Wang, China economist, Goldman Sachs, Hong Kong.
Beijing has increased infrastructure investment and rolled out consumer subsidies, while also easing monetary policy. In May, the central bank lowered interest rates and pumped liquidity into the financial system as part of wider measures to shield the economy from U.S. President Donald Trump’s broad tariffs.
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Consumers face mounting pressure
Separate activity data for June, also released on Tuesday, highlighted mounting pressure on consumers. Although industrial output grew by 6.8 percent year-on-year—the quickest pace since March—retail sales growth fell to 4.8 percent last month, down from 6.4 percent in May, marking the slowest rate since January-February.
Data on Monday showed that China’s exports regained some momentum in June as factories rushed out shipments to capitalize on the fragile tariff truce with Washington ahead of a looming August deadline.
China has set an ambitious 2025 growth target of around 5 percent, but the trade war with the United States has already prompted many analysts to sharply downgrade their GDP forecasts for this year. The World Bank expects China’s economy to grow by 4.5 percent in 2025 and 4 percent in 2026, with fiscal policy cushioning the slowdown pressures due to global trade restrictions and uncertainty.
