China's factory output in April showed surprising resilience in the face of heightened U.S. tariffs, offering a rare bright spot in a month otherwise marked by sluggish consumer spending and a persistent property sector slump, according to data released Monday by the National Bureau of Statistics.
Industrial production rose 6.1% year-on-year, easing from 7.7% in March but outperforming Reuters’ forecast of 5.5%, signaling that government support measures and fiscal stimulus may be partially offsetting trade tensions.
“April’s resilience is in part a result of ‘frontloaded’ fiscal support,” said Tianchen Xu of the Economist Intelligence Unit, who also cautioned that export delivery values were nearly stagnant despite the headline output gain.
The latest figures follow stronger-than-expected exports earlier this month, as Chinese firms re-routed shipments and overseas buyers rushed to secure supplies ahead of further tariff escalation. However, retail sales—a key barometer of domestic demand—rose just 5.1%, missing expectations and slowing from 5.9% in March, reflecting fragile consumer confidence.
Trade Truce Offers Temporary Relief
A surprise U.S.-China agreement last week to pause new tariffs for 90 days provided a glimmer of relief, slowing what had become a spiraling trade war. Still, U.S. tariffs remain elevated, with 30% duties still in place on many Chinese goods.
“China’s foreign trade has overcome difficulties and maintained steady growth,” said Fu Linghui, spokesperson for the NBS, calling the recent detente a positive development for bilateral trade and global recovery.
Despite this, investor sentiment wavered: the CSI300 Index fell 0.4%, while the Shanghai Composite Index slipped 0.1%. The yuan also weakened slightly against the dollar.
Structural Weaknesses Persist
The property sector—long a pillar of Chinese growth—continues to drag. Home prices have stagnated, and investment is shrinking, underscoring the ongoing difficulties in reviving real estate activity.
In the commodities space, daily crude oil processing dropped 4.9% from March, and crude steel output fell 7%, highlighting weakened industrial demand.
Meanwhile, home appliance sales surged 38.8%, bolstered by a government trade-in scheme aimed at stimulating household consumption—one of the few bright spots on the domestic front.
Unemployment edged down slightly to 5.1%, though anecdotal reports suggest factory job cuts are rising in sectors heavily reliant on U.S. exports.
Economic Outlook: Uneven and Uncertain
Economists remain cautious. Goldman Sachs warned that short-term growth momentum, supported by frontloaded stimulus, may not be sustainable without further policy support. “We believe more easing is necessary to stabilize growth, employment, and sentiment,” its analysts said.
China’s GDP grew 5.4% in Q1, beating expectations and keeping Beijing’s “around 5%” target for 2025 within reach. However, with consumer caution deepening and investment lagging, the path forward remains precarious.
“Even if the tariff rollback proves durable,” said Julian Evans-Pritchard of Capital Economics, “wider headwinds mean we still expect China's economy to slow further over the coming quarters.”
As the trade war’s psychological toll dampens consumer outlook, Beijing faces the dual challenge of sustaining industrial strength while rebuilding domestic confidence in a shifting global economic landscape.
Israel is ready to move Palestinians from Gaza as soon as the U.S. approves, the country’s Defence Minister Israel Katz has said. He told a c...
U.S. negotiators Steve Witkoff and Jared Kushner will visit Russia then Ukraine over the weekend, Russian state news agency TASS has reported, citi...
U.S. efforts to squeeze Iran’s economy through an oil blockade and sanctions are becoming increasingly difficult for Tehran to withstand, acc...
Russian President Vladimir Putin has said that he thinks there is a chance of a peace being reached with Ukraine. He told the Eastern Economic Forum in Vladivostok, Russia that he believed there was "a chance of finding a solution," to the conflict.
The Iranian Health Ministry said at least 18 people were killed and 142 others injured in U.S. airstrikes carried out between 30 August and 2 September.
The European Union's foreign policy chief Kaia Kallas says the bloc will tighten enforcement of sanctions against Russia over its war in Ukraine. EU foreign ministers were meeting in Ireland following renewed Russian strikes on cities across Ukraine.
Start your day informed with the AnewZ Morning Brief. Here are the top stories for the 3rd of September, covering the latest developments.
U.S. negotiators Steve Witkoff and Jared Kushner will visit Russia then Ukraine over the weekend, Russian state news agency TASS has reported, citing an unnamed source. Ukrainian President Volodymyr Zelenskyy has also said American envoys will visit the capitals of both countries.
Volkswagen’s supervisory board has approved a major overhaul aimed at cutting 100,000 jobs by 2030 as the German carmaker battles weaker sales, falling profits and intensifying global competition.
Chinese Premier Li Qiang has called on American companies to expand their presence in China and pledged that Beijing would address their "reasonable concerns," as China looks to stabilise trade ties with Washington ahead of President Xi Jinping's planned visit to the U.S. later this month
Apple is entering a new era as Tim Cook steps down as chief executive after 15 years at the helm, handing the technology giant's leadership to longtime executive John Ternus.
Volkswagen is heading towards a decisive showdown with labour representatives as Germany's largest carmaker weighs sweeping restructuring measures that could lead to factory closures and tens of thousands of job losses.
Online fast-fashion retailer Shein is seeking to raise up to $1.77 billion in a Hong Kong IPO after its valuation fell around 70 per cent from its private-market peak four years ago.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment