Despite rising trade tensions with the U.S., China’s industrial output grew 6.1% in April (China’s factory output), slowing from 7.7% in March but exceeding Reuters’ forecast of 5.5%.
Economists attribute the resilience to frontloaded fiscal support from the government and stronger-than-expected exports, as Chinese exporters adapted to tariff pressures.
Tianchen Xu, Economist Intelligence Unit:
“April’s resilience is in part a result of frontloaded fiscal support.”
Tariff Truce
A recent 90-day U.S.-China tariff rollback agreement has temporarily eased pressure, but long-term uncertainty persists due to the volatile nature of U.S. policy under President Trump(China’s factory output).
Despite progress, 30% tariffs remain on top of existing duties, keeping exporters wary.
Fu Linghui, NBS Spokesperson:
“China’s foreign trade has overcome difficulties and maintained steady growth.”
Mixed Economic Signals
- Retail sales rose 5.1% in April, below the expected 5.5% and down from 5.9% in March, reflecting weakened consumer confidence and low domestic demand.
- Home appliance sales jumped 38.8%, boosted by a government trade-in scheme.
- Unemployment dipped slightly to 5.1% in April from 5.2%, though some factories reliant on U.S. markets reportedly sent workers home.
- Property sector remains weak with stagnant home prices and falling investment.
Commodity Sector Weakness
- Crude oil processing fell 4.9% month-on-month.
- Crude steel output dropped 7% in April.
These declines indicate lower industrial demand and sluggish infrastructure activity.
Economists Call for More Stimulus
With persistent deflationary pressures and weak bank lending data, analysts are pushing for additional policy support.
Goldman Sachs economists:
“Near-term growth strength is at the cost of payback effects later… more policy easing is necessary.”
Outlook
- Q1 growth: 5.4%, above expectations.
- Annual target: Around 5%, still achievable according to Beijing.
- Economists remain cautious, citing household spending fears, global headwinds, and lingering trade risks.
Julian Evans-Pritchard, Capital Economics:
“Even if the tariff rollback proves durable, wider headwinds mean we still expect China’s economy to slow further.”
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