China’s economy improved early in 2025 with a 4% increase in retail sales and 5.9% in industrial production. However, the housing market’s weakness continues to hinder growth, compounded by tariffs imposed by the United States. Caution has been urged to maintain policy support for recovery amidst these challenges.

In the initial months of 2025, China’s economy demonstrated signs of improvement, despite persistent challenges. According to data from the National Bureau of Statistics, retail sales increased by 4% and industrial production rose by 5.9% compared to the previous year, contributing to positive movements in Asian stock markets.

While these figures indicate progress, a spokesperson from the bureau, Fu Linghui, cautioned that difficulties both domestically and internationally linger. Notably, the imposition of a 20% tariff on Chinese imports by U.S. President Donald Trump poses a significant threat to an economy reliant on exports. Fu Linghui remarked, “The external environment has become more complex and grim… the foundation for the continuous recovery of the economy is still unstable.”

Simultaneously, the ongoing real estate crisis continues to negatively impact the broader economy, with a reported 9.8% decline in real estate investment during the first two months of the year. This downturn has led to diminished consumer confidence and spending. Though real estate prices declined in January and February, the rate of decline has slowed compared to the previous year, suggesting a potential turning point.

Economists from ING bank anticipate that while real estate prices may stabilize, a rapid rebound is unlikely. Lynn Song, the chief Greater China economist at ING, advised in a report that data from February indicates, “it would be wise for officials not to take their foot off the pedal in terms of policy support.”

In summary, while China’s economy began 2025 with some positive indicators, challenges remain, particularly from the struggling housing market and external pressures such as tariffs. The situation necessitates careful monitoring and persistent policy intervention to bolster recovery and stabilize economic growth effectively.

Original Source: www.independent.co.uk

Related posts:

China’s Economic Improvement Amid Ongoing Challenges China’s Economic Outlook for 2025: Improvement Amid Ongoing Challenges China’s Strategies to Enhance Consumer Spending Amidst Tariff Pressures China’s Strategies to Enhance Consumer Spending Amid Tariff Pressures