China's Q1 'Surprise Growth'... Tariff Shock Not Reflected

Korea Economic Daily

Summary

It was announced that the Chinese economy recorded a 5.4% growth rate in Q1, exceeding market expectations.
Export growth led the growth, but it is reported that the impact of the US-China tariff war has not yet been reflected.
Bloomberg and Reuters view it as the effect of economic stimulus measures, pointing out that it is not a real economic recovery.

Recorded 5.4% Exceeding Expectations

The Chinese economy achieved a 'surprise growth' exceeding expectations in the first quarter of this year. There are concerns that growth may slow if the tariff war with the United States intensifies.

The National Bureau of Statistics of China announced on the 16th that the economic growth rate for the first quarter was 5.4%. This is higher than the market estimate of 5.2%. Exports led the growth. Exports in the first quarter increased by 6.9% compared to the same period last year. Looking at March alone, exports increased by 12.4% compared to a year ago. Industrial production in March also increased by 7.7%, showing the fastest growth since June 2021. The Chinese government has set a growth target of 5% for this year, and the first quarter shows a positive sign.

However, Bloomberg News pointed out that companies seem to have shipped goods in advance ahead of the 125% reciprocal tariffs imposed by the Donald Trump administration this month. Reuters also stated that it is closer to the effect of economic stimulus measures rather than a signal of real economic recovery, and that the impact of the US-China tariff war has not been reflected.

On this day, China replaced its Minister of Commerce and Trade Negotiation Head, who led the US-China trade negotiations during Trump's first term, from Wang Shouwen to Li Chenggang. Li Chenggang is a former Chinese ambassador to the World Trade Organization (WTO). Observations suggest that China intends to confront the US head-on for the time being.

Reporter Lee Hye-in hey@hankyung.com