China has posted unexpectedly strong economic growth in the first three months of 2025, before the full force of US President Donald Trump's tariffs took effect. Growth in its gross domestic product (GDP) hit 5.4% in the first quarter, the National Bureau of Statistics (NBS) said on Wednesday. That was considerably higher than the expectations of more than 50 economists surveyed by Reuters, who had predicted expansion of 5.1%, and continues a recent run of surprisingly strong export-driven growth seen at the end of 2024. "The national economy had a steady and good start, continuing the upward trend," Sheng Laiyun, deputy director of the NBS, told a news conference. "However, we must also see that the current external environment is becoming more complex and severe, and the domestic effective demand growth momentum is insufficient." Growth in China, the world's second-largest economy, is in focus as it deals with the fallout of an escalating trade war with the United States. And that's on top of the economic problems it has faced for years: a crisis in the property sector, the specter of falling prices and a reluctance among consumers to spend. The data announced by the NBS covers growth in the first quarter, a particularly eventful time for US-China trade relations. During that period, Trump imposed two rounds of tariffs totaling 20% on China, related to fentanyl. The figures do not include the impact of Trump's additional "reciprocal" tariffs on Chinese imports, which took effect in April. The overall tariffs on China now exceed a staggering 145%. Asked about the impact of the tariffs, Sheng said China opposes the US tariff barriers and "trade bullying." While the tariffs will bring "certain pressure" to the Chinese economy, they "cannot change the general trend of China's continued long-term economic improvement," he said. "China's economic foundation is stable, resilient and has great potential, so we have the courage, ability and confidence to cope with external challenges and achieve the established development goals," he added. Last month, Beijing set an ambitious target of "around 5%" growth for this year, in a defiant show of confidence in its export-driven economy. However, economists believe it will be tough to meet this target. "We think the tariff shock poses unprecedented challenges to China's exports and will set forth major adjustment in the domestic economy as well," UBS economists led by Tao Wang wrote in a Tuesday research note. They have downgraded their economic growth forecast for 2025 to 3.4% from 4%, with the assumption that the bilateral tariffs remain, and that Beijing will eventually announce additional stimulus measures. Last week, investment bank Goldman Sachs said the US tariffs will "significantly weigh" on the Chinese economy. It has downgraded its GDP growth forecasts for 2025 and 2026 to 4% and 3.5%, respectively, from previous projections of 4.5% and 4%. — CNN
