Forecast-beating growth in China’s first quarter might have offered Beijing’s economic planners some much-needed good news, but analysts said they should strap in for tariff-induced woes further down the line.
The Chinese National Bureau of Statistics yesterday said the world’s No. 2 economy expanded 5.4 percent year-on-year in the January-to-March period, helped by a surge in exports. That was above the 5.1 percent predicted by analysts polled by Agence France-Presse.
Retail sales, a key gauge of consumer demand, rose 4.6 percent year-on-year, the bureau said — exceeding expectations following greater efforts by Beijing to boost consumer demand after years of weak spending.
Photo: Reuters
Meanwhile, industrial output soared 6.5 percent in the first quarter of the year, up from 5.7 percent in the final three months of last year.
However, observers said the bulk of that came from “frontloading” as businesses rushed to ship goods out of the factory before US President Donald Trump’s trade blitz kicked in.
While state efforts to boost lagging consumption — for months a drag on growth — played a role in the growth boost, the outlook remained uncertain, observers said.
“It’s too early to interpret this strength as a sign of lasting market recovery,” Economist Intelligence Unit principal economist Yue Su (蘇月) said.
“The strong performance has been driven by trade frontloading ahead of anticipated tariffs and a policy-driven rebound in consumption — particularly in electronics and home appliances,” she added.
Tit-for-tat exchanges have seen US levies imposed on China rise to 145 percent, and Beijing setting a retaliatory 125 percent toll on imports from the US.
Trump has said the ball is in China’s court if it wants to find a way out and Beijing has, in turn, vowed to “fight to the end” in a trade dispute that shows few signs of letting up.
In the face of those global trade headwinds, Beijing yesterday said it would appoint Li Chenggang (李成鋼), a former Chinese representative to the WTO in Geneva, Switzerland, as its top trade envoy.
“The escalation happening in April is going to be felt in the second-quarter figures as the tariffs will send stateside firms looking to other suppliers, impeding Chinese exports and slamming the brakes on investment,” Moody’s Analytics economist Heron Lim (林師順) said.
“This will hit electronics makers and exporters the hardest, as their products dominate China’s US-bound exports,” he said.
Oxford Economics Ltd economist Louise Loo (盧姿蕙) said that “the improvement in growth momentum is very likely to be short-circuited in the coming months by the incoming headwinds of punitive tariffs.”
Beijing said the global economic environment was becoming more “complex and severe,” and that “proactive and effective macro policies” were needed to boost growth and consumption.
“The foundation for sustained economic recovery and growth is yet to be consolidated,” the bureau said.
China’s top leaders last month set an ambitious annual growth target of about 5 percent, although many economists consider that goal to be ambitious given the problems facing the economy.
Insights into how that stimulus could work could emerge from an expected meeting of the Politburo Standing Committee of the Chinese Communist Party, country’s top decisionmaking body.
“We continue to anticipate a US$2 trillion stimulus package focused on consumption, infrastructure, urban renewal and shantytown renovation,” Su said. “Challenges to China’s economy remain significant over the coming quarters.”
SECOND-RATE: Models distilled from US products do not perform the same as the original and undo measures that ensure the systems are neutral, the US’ cable said The US Department of State has ordered a global push to bring attention to what it said are widespread efforts by Chinese companies, including artificial intelligence (AI) start-up DeepSeek (深度求索), to steal intellectual property from US AI labs, according to a diplomatic cable. The cable, dated Friday and sent to diplomatic and consular posts around the world, instructs diplomatic staff to speak to their foreign counterparts about “concerns over adversaries’ extraction and distillation of US AI models.” Distillation is the process of training smaller AI models using output from larger, more expensive ones to lower the costs of training a powerful new
Micron Technology Inc is a driving force pushing the US Congress to pass legislation that would put new export restrictions on equipment its Chinese competitors use to make their chips, according to people familiar with the matter. A US House of Representatives panel yesterday was to vote on the “MATCH Act,” a bill designed to close gaps in restrictions on chipmaking equipment. It would also pressure foreign companies that sell equipment to Chinese chipmaking facilities to align with export curbs on US companies like Lam Research Corp and Applied Materials Inc. The bill targets facilities operated by China’s ChangXin Memory Technologies Inc
Singapore-based ride-hailing and delivery giant Grab Holdings’ planned acquisition of Foodpanda’s Taiwan operations has yet to enter the formal review stage, as regulators await supplementary documents, the Fair Trade Commission (FTC) said yesterday. Acting FTC Chairman Chen Chih-min (陳志民) told the legislature’s Economics Committee that although Grab submitted its application on March 27, the case has not been officially accepted because required materials remain incomplete. Once the filing is finalized, the FTC would launch a formal probe into the deal, focusing on issues such as cross-shareholding and potential restrictions on market competition, Chen told lawmakers. Grab last month announced that it would acquire
Alphabet Inc CEO Sundar Pichai is deepening a push into enterprise software, signaling to investors at Google’s annual cloud conference that artificial intelligence (AI) agents — human-like digital assistants — are a lynchpin of its strategy to monetize AI. At the three-day conference in Las Vegas that started yesterday, Pichai and key Google executives aim to position the company’s AI tools as production-ready infrastructure for enterprise customers who are emerging as the industry’s most reliable revenue stream. Mountain View, California-based Google yesterday announced that it was unifying a set of AI products under the name “Gemini Enterprise.” Most notably, that involves rebranding and
RSS