In the first three months of 2025, China's economy showed unexpected strength. The country's GDP grew by 5. 4% year-on-year, according to the National Bureau of Statistics in Beijing. This growth rate was higher than the 5. 1% that analysts had predicted. The news came out on a Wednesday, and it was a pleasant surprise for many.

The growth happened despite the ongoing trade war with the U. S. The U. S. had recently increased tariffs on Chinese exports, but China's economy seemed to handle it well. Officials in Beijing said this growth showed how strong and adaptable China's economy is, even with the U. S. putting up trade barriers.

The U. S. had been saying that its economy would do better than China's in a full-blown trade war. But China was confident that the U. S. would face more harm. China was ready to fight back with its own measures. The trade war was heating up, and both sides were preparing for a long fight.

China had also been making changes to its trade partners. Since the trade war started during Trump's first term, China had been working on reducing its dependence on the U. S. market. This move was helping China to spread out its trade risks. It was also helping to lessen the impact of the U. S. tariffs.

But there were still challenges ahead. The 145% tariffs from the U. S. were causing some pressure on China's trade and economy. These tariffs were also against the rules set by the World Trade Organization. China had to find ways to deal with these issues.

One big problem for China was its weak domestic consumption. To grow in the long term, China needed to boost spending within its own borders. This would help to reduce the impact of external trade issues.

Experts had different views on China's economic future. Some banks, like Goldman Sachs and Citigroup, had lowered their growth forecasts for China. They thought the U. S. tariffs would heavily affect China's exports. But others, like Nicholas Lardy, thought China could handle the trade war better than expected. The future was uncertain, and both sides had to navigate carefully.

The trade war was complex, with both sides trying to find ways to lessen the impact. China was using third countries to bypass some of the U. S. tariffs. This was a strategic move to keep its exports flowing. The trade war was a game of cat and mouse, with both sides trying to outsmart the other.

China's Economy: Stronger Than Expected Amid Trade Tensions

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