China’s factory output showed surprising resilience in April, growing 6.1% from a year earlier, despite a slowdown from 7.7% in March. The data beat forecast expectations of a 5.5% rise. However, retail sales expansion missed forecasts, and the property sector continues to struggle.
The government’s support measures appear to have cushioned the impact of the US trade war on China’s economy. Industrial output growth was driven by firmer-than-expected exports, which were supported by exporters rerouting shipments and countries buying more materials from China amid a re-ordering of global trade.
Despite this resilience, economists warn that the short-term truce and US President Donald Trump’s unpredictable approach will continue to cast a shadow over China’s export-driven economy. The property sector remains weak, with home prices stagnating and investment shrinking.
Retail sales rose 5.1% in April, down from a 5.9% increase in March, and missed forecasts for a 5.5% expansion. Economists attribute the slowdown to the impact of US tariffs on consumer expectations and tepid demand at home. Commodity sectors also showed signs of weakness, with crude oil processing rates and steel output declining.
The government’s efforts to boost household spending via a trade-in scheme for consumer goods led to a 38.8% gain in home appliance sales. The unemployment rate fell to 5.1% from 5.2% in March. However, anecdotal evidence suggests that some factories heavily reliant on the US market have sent their workers home.
Economists highlight the need for more policy support to foster a sustainable recovery. They warn that the near-term growth strength is at the cost of payback effects later and believe more policy easing is necessary to stabilise growth, employment, and market sentiment.
China’s economy expanded 5.4% in the first quarter, exceeding expectations. Authorities remain confident of achieving Beijing’s growth target of around 5% this year, despite warnings from economists that US tariffs could derail momentum.
Source: https://www.reuters.com/world/china/chinas-april-factory-output-retail-sales-growth-slow-2025-05-19