China’s economy hit the government’s growth goal last year after an 11th-hour stimulus blitz and export boom turbocharged activity, although looming US tariffs threaten to take away a key driver of expansion.
GDP rose 5 percent in the world’s second-largest economy, data released by the Chinese National Bureau of Statistics yesterday showed, slightly exceeding the median estimate of 4.9 percent in a Bloomberg survey.
“The biggest bright spot in the economy last year was exports, which was very strong, especially if price factor was excluded,” BNP Paribas SA chief China economist Jacqueline Rong (榮靜) said. “That means the biggest problem this year will be US tariffs.”
Photo: EPA-EFE
China has vowed further monetary easing and stronger public spending this year, as its economy braces for US president-elect Donald Trump’s return to the White House.
Trump has threatened tariffs of as high as 60 percent on Chinese goods, which could decimate trade with the Asian country.
Those very threats encouraged global businesses to frontload shipments and bolstered growth last year. However, that boost might fade in the coming months, as potential levies, including from the EU and other trade partners, make Chinese exports less competitive.
The yuan strengthened 0.1 percent against the US dollar in onshore and offshore markets after the data release. The benchmark CSI 300 index of Chinese stocks erased an earlier loss of 0.5 percent to rise 0.5 percent.
“The government has repeatedly alluded to significant support. We see this forthcoming, as Friday’s data hammer home the pressing need. The imperative could become even greater in the case of higher tariffs hitting exports significantly,” Bloomberg economists Chang Shu and David Qu (曲天石) said.
While China’s nearly flawless record in reaching its headline growth target is frequently doubted, the broad set of data also suggests Beijing’s policy pivot since late September last year helped counter headwinds from a years-long property slump and entrenched deflation.
Industrial production beat estimates to rise 6.2 percent last month compared with the previous year, the fastest pace since April last year.
The picture for domestic demand is more mixed. While unemployment climbed for the first time since August last year and property sales continued to contract, consumption showed signs of an uptick in categories helped by the stimulus push.
Retail sales rose 3.8 percent in the last quarter, accelerating to the fastest pace last year after the government ramped up a program to subsidize purchases of appliances, cars and business equipment. That brought home goods sales growth to 12.3 percent, the highest since 2013.
“Front-loaded export orders certainly helped, but the improvement was not just seen in exports, but also in consumption, which was largely a result of purchase subsidies,” Macquarie Group Ltd China economics head Larry Hu (胡偉俊) said.
Economists led by Robin Xing (邢自强) at Morgan Stanley estimate that about 60 percent of the rebound in annual growth was caused by China’s policy to boost consumption and manufacturing investment, while the rest came from advanced shipments.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said it would boost equipment capital expenditure by up to 16 percent for this year to cope with strong customer demand for artificial intelligence (AI) applications. Aside from AI, a growing demand for semiconductors used in the automotive and industrial sectors is to drive ASE’s capacity next year, the Kaohsiung-based company said. “We do see the disparity between AI and other general sectors, and that pretty much aligns the scenario in the first half of this year,” ASE chief operating officer Tien Wu (吳田玉) told an