China's economy grows 5.2% in Q2 despite US tariffs – DW – 07/15/2025
China's economy grew 5.2% year-on-year in the second quarter of 2025 amid ongoing trade tensions with the United States, official data showed on Tuesday.
The second quarter growth was slightly below the 5.4% pace in the first, but keeping on track to meet the government's full-year target of "around 5%."
The first-half performance was supported by state stimulus and a pause in US-China trade war escalations that allowed exporters to rush out shipments ahead of potential tariff hikes.
"China achieved growth above the official target of 5% in Q2 partly because of front loading of exports," said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
Analysts, however, warn that the growth may not be sustainable. Weakened consumer confidence, falling prices, and a deepening property crisis continue to weigh on demand.
"The real estate crisis remains a major medium-term drag on local government budgets," said Dan Wang, economist at the Eurasia Group.
Investors, meanwhile, are bracing for a weaker second half even as additional stimulus are expected to be considered at the upcoming Politburo meeting in July.
At the same time, according to economic research and consulting firm Prognos Institute, Chinese companies now account for 16% of global exports, double that of Germany, raising the stakes in an increasingly competitive global trade landscape.
To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video
Tensions are simmering between Washington and Beijing as the two nations clash over a range of issues, including Taiwan, emerging technologies and most importantly, trade.
Escalating trade tensions, US President announced 145% tariffs on Chinese goods in April. However, negotiations between the two significant economies in May led to lowering of US tariffs to 30% for 90 days to allow for talks, while China also reduced its taxes on US goods from 125% to 10%.
US-China competition is already substantially impacting global economy and politics.
If the trade war between the two escalates once again, China might try to use the EU market to absorb Chinese production overcapacity.
In turn, the US could also redefine goods manufactured in the EU through Chinese direct investment as Chinese products and demand higher levies from EU businesses.
Meanwhile, as the US tightens trade restrictions with some Latin American countries, China is expanding its influence across South America.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
DW
5 hours ago
- DW
EU backs Trump Ukraine U-Turn but wants US to 'share burden' – DW – 07/15/2025
The European bloc welcomed a shift in US rhetoric on Ukraine but pressed Washington to chip in. The EU, however, failed to agree on a new round of sanctions on Russia. The European Union's foreign affairs chief may be having something of an "I told you so" moment as US President Donald Trump reverses his past praise of Vladimir Putin and vows to ramp up pressure on Moscow. "We see from the United States that they have also realized that Russia does not really want peace," Kaja Kallas told reporters in Brussels on Tuesday. The former Estonian prime minister made a name for herself as one of Ukraine's staunchest political backers, and warned at this week's EU talks that Russia's bombing campaign had "reached record levels." Kallas and many of her EU counterparts welcomed Washington's shift in rhetoric as they filed into a meeting. "What we experienced yesterday with the new messages from Trump was very, very important," Denmark's Lars Lokke Rasmussen said. But some of the EU's top brass also had notes for the US on its latest announcements, including Washington's threat to slap 100% secondary tariffs on Russia and countries that trade with it unless a peace deal with Ukraine is reached by early September. "The 50 days that Mr. Trump has announced is rather long," Dutch foreign minister Caspar Veldkamp said on the sidelines of Tuesday's talks. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Trump also made headlines Monday with an announcement that he'd be greenlighting sales of Patriot air defense systems and other arms to European countries to send on to Ukraine, just two weeks after Washington paused some arms shipments to Kyiv. The new plan should speed up and expand deliveries of US arms which Ukraine says it needs as it faces increased Russian aerial attacks. Some European countries have already been buying and sending US-made weapons to Kyiv, though the latest scheme could offer more certainty on the permissions needed to swiftly transfer the arms. A US commitment to sell replacements for American-made weapons sent to Ukraine could also encourage European states to ship more of their own military supplies. NATO chief Mark Rutte said the deal would "work through NATO systems" and that European countries including Germany, Finland, Denmark, Sweden and the Netherlands were all interested in taking part. But the US is yet to disclose more details of its new scheme and DW understands the technicalities of exactly how it will work are still being discussed. Trump was, however, quick to cast the new deal as a lucrative business opportunity for the US, stressing Europe would foot the bill. And that seems to be raising some eyebrows among his counterparts across the Atlantic. The EU's Kallas told reporters after Tuesday's meeting that she would like to see Europe and the US "share the burden" of arming Ukraine. "If we pay for these weapons, it's our support — so it's European support — and we are doing as much as we can to help Ukraine. And therefore the call is that everybody would do the same," she said. "If you promise to give the weapons then say that somebody else is going to pay for it, it's not really given by you, is it?" Kallas added. Denmark's Rasmussen made a similarly veiled allusion. "We are providing a lot of funding for Ukraine to buy whatever weapons and ammunition they need … But I mean, I would very much like to see all our partners actually also contributing if we want this war to stop," he said. While the US ranks as Ukraine's single largest donor since its full-scale invasion by Russia, the European Union as a whole has spent roughly the same amount as Washington over the same period, according to data from the Kiel Institute cited by Radio Free Europe. The EU outspends the US when the cost of hosting and assisting Ukrainian refugees is factored in. EU states may be breathing a sigh of relief after the US policy shift, but policy analyst Torrey Taussig says it's too soon to judge whether Trump's stance has changed for good. "There has been a seesaw approach to this relationship throughout the last several months of this administration, and I wouldn't be surprised if this relationship, the US-Ukrainian relationship, still has more turns that it can take," the former US government official turned Atlantic Council fellow told DW. "I'm very reluctant to call this a strategic shift in the US-Ukrainian relationship," she added, though added that the two sides' ties now seem far more "positive." To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video With European countries racing to boost their own defenses amid pressure from the US and a broader rethink of the EU's geopolitical fragility, governments have been debating how much of a planned military spending splurge should go to US weapons. Arms purchases, especially those involving large weapons systems, tend to lock the buyer into a years-long relationship with the seller, from production to delivery to future repairs. Experts say ending Europe's dependency on the American-made weapons, logistics and intelligence capacities it lacks could take at least a decade — and with US foreign policy proving unpredictable, that leaves some worried. EU heavyweight France has pushed for more European-only purchases, frustrating some other states which argued this only serves to slow down the process of getting weapons into European and Ukrainian hands. The latest US-led plan may be seen by some as a blow to France's efforts, with the potential for more European money to flow toward US arms manufacturers. As Europe nudges the US to do more to support Ukraine and punish Russia, the bloc's own efforts are faltering. Kallas said she was "really sad" that ministers failed to adopt an 18th round of EU sanctions on Moscow on Tuesday due to a holdout by Slovakia. The landlocked central European state has been protesting planned EU laws to ban all sales of Russian gas, and Prime Minister Roberto Fico said in an online post on Tuesday that Slovakia had asked the EU to postpone the vote on sanctions while his government mulled its response to an exchange with the EU's executive aimed at ending the stalemate. Kallas said she was "optimistic" an agreement could be struck among EU states in the coming days.
Int'l Business Times
7 hours ago
- Int'l Business Times
Trump Says Indonesia To Face 19% Tariff Under Trade Deal
President Donald Trump said Tuesday that he had struck a trade pact with Indonesia resulting in a lower US tariff on the country's goods than earlier threatened, alongside better market access. "Great deal, for everybody, just made with Indonesia," Trump wrote on his Truth Social platform, saying that he worked with the country's president directly. He later told reporters that Indonesia was "giving us access" and that goods from the Southeast Asian country would face a 19 percent tariff. Trump did not elaborate on the improved access that he had touted, although he stressed that Indonesia is "very strong on copper" and other materials. The Trump administration has been under pressure to finalize trade pacts after promising a flurry of deals, as countries sought negotiations with Washington to avoid Trump's tariff threats. But the US president has so far only unveiled deals with Britain and Vietnam, alongside an agreement to temporarily lower tit-for-tat levies with China. Last week, Trump renewed his threat of a 32 percent levy on Indonesian goods, saying in a letter to the country's leadership that this level would take effect August 1. It remains unclear when the lower tariff level announced Tuesday will take effect for Indonesia. "We have a couple of those deals that are going to be announced. India basically is working along that same line," Trump told reporters Tuesday, referring to market access. Indonesia's former vice minister for foreign affairs Dino Patti Djalal told a Foreign Policy event Tuesday that government insiders had indicated they were happy with the new deal. Trump in April imposed a 10 percent tariff on almost all trading partners, while announcing plans to eventually hike this level for dozens of economies, including the European Union and Indonesia. But days before the steeper duties were due to take effect, he pushed the deadline back from July 9 to August 1. This marked his second postponement of the elevated levies. Instead, since early last week, Trump has been sending letters to partners, setting out the tariff levels they would face come August. To date, Trump has sent more than 20 such letters including to the EU, Japan, South Korea and Malaysia. Canada and Mexico, both countries that were not originally targeted in Trump's "reciprocal" tariff push in April, also received similar documents outlining updated tariffs for their products. But existing exemptions covering goods entering the United States under a North American trade pact are expected to remain in place, a US official earlier said. Trump has unveiled blanket tariffs on trading partners in part to address what his administration deems as unfair practices that hurt American businesses. Analysts have warned that without trade agreements, Americans could conclude that Trump's strategy to reshape US trading ties with the world has not worked. "In the public's mind, the tariffs are the pain, and the agreements will be the gain. If there are no agreements, people will conclude his strategy was flawed," William Reinsch, senior adviser at the Center for Strategic and International Studies, previously told AFP.
Int'l Business Times
8 hours ago
- Int'l Business Times
Tackling Debt 'Curse', France Wants To Slash Holidays
France's Prime Minister Francois Bayrou said Tuesday he wanted to reduce the number of public holidays as part of an urgent plan to tackle what he called the "curse" of his country's debt. Presenting his outline 2026 budget plan, Bayrou said two holidays out of France's total of 11 could go, suggesting Easter Monday as well as and May 8, a day that commemorates the end of World War II in Europe. After years of overspending, France is on notice to bring its public deficit back under control, and cut its sprawling debt, as required under EU rules. Bayrou said France had to borrow each month to pay pensions or the salaries of civil servants, a state of affairs he called "a curse with no way out". Bayrou had said previously that France's budgetary position needed to be improved by 40 billion euros ($46.5 billion) next year. But this figure has now risen after President Emmanuel Macron said at the weekend he hoped for additional military spending of 3.5 billion euros next year to help France cope with international tensions. France has a defence budget of 50.5 billion euros for 2025. Bayrou said the budget deficit would be cut to 4.6 percent next year, from an estimated 5.4 percent this year, and would fall below the three percent required by EU rules by 2029. To achieve this, other measures would include a freeze on spending increases across the board -- including on pensions and health spending -- except for debt servicing and the defence sector, Bayrou said. "We have become addicted to public spending," Bayrou said, adding that "we are at a critical juncture in our history". The prime minister even held up Greece as a cautionary tale, an EU member whose spiralling debt and deficits pushed it to the brink of dropping out of the eurozone in the wake of the 2008 financial crisis. "We must never forget the story of Greece," he said. France's debt currently stands at 114 percent of GDP -- compared to 60 percent allowed under EU rules -- the biggest debt mountain in the EU after Greece and Italy. The government hopes to cut the number of civil servants by 3,000 next year, and close down "unproductive agencies working on behalf of the state", the premier said. Bayrou said that wealthy residents would be made contribute to the financial effort. "The nation's effort must be equitable," Bayrou said. "We will ask little of those who have little, and more of those who have more." Losing two public holidays, meanwhile, would add "several billions of euros" to the state's coffers, Bayrou said. But the proposed measure sparked an immediate response from Jordan Bardella, leader of the far-right National Rally. He said abolishing two holidays, "especially ones as filled with meaning as Easter Monday and May 8 is a direct attack on our history, our roots and on labour in France". Leftist firebrand Jean-Luc Melenchon of the France Unbowed party meanwhile called for Bayrou's resignation, saying "these injustices cannot be tolerated any longer".
