China posts 5.4% GDP growth in first quarter, beating forecasts | Business and Economy

Statistics agency says economy ‘off to a good start’ despite more ‘complex and severe’ external environment.

China’s economy grew 5.4 percent in the January-March quarter, the country’s statistics agency has said, a stronger-than-expected performance that comes as exporters are bracing for the fallout of United States President Donald Trump’s punishing tariffs.

Industrial output rose 6.5 percent, the biggest gain among individual sectors, while the service sector expanded 5.3 percent, the National Bureau of Statistics of China said on Wednesday.

Retail sales and agricultural production grew 4.6 percent and 4.0 percent, respectively.

“The national economy was off to a good start and the high-quality development was advancing with new and positive momentum,” the statistics agency said.

China’s economy is nonetheless facing a more “complex and severe” external environment and the “foundation for sustained economic recovery and growth is yet to be consolidated,” the statistics bureau said.

The economic figures come as the US and China, the world’s two largest economies, are locked in an escalating trade war that threatens to shake the foundations of the global economy.

“They are very positive based on exports mostly, so expect the second quarter to be much worse,” Alicia García-Herrero, the chief economist for Asia Pacific at Natixis in Hong Kong, told Al Jazeera.

Trump has hit China with a 145 percent tariff while opening the door to further trade restrictions on some of its biggest exports, including semiconductors and critical minerals.

China has retaliated with a 125 percent duty on US goods, pledging to “fight to the end” if Washington continues to escalate its trade salvoes.

Lynn Song, chief economist for greater China at ING, said in a note that Beijing will likely roll out more monetary and fiscal stimulus in order to meet its 2025 growth target of about 5 percent.

“The economy is off to a much-needed strong start in 2025, as second-quarter growth will likely take hits from the sharp escalation of President Trump’s trade war,” Song said.