China’s economy grew faster than expected in the first three months of this year, as government stimulus measures helped to boost consumption. The 5.4 per cent increase of gross domestic product (GDP) compared to the same quarter last year came ahead of Donald Trump’s imposition of crippling tariffs on Chinese goods.
Retail sales grew by a bigger than expected 5.9 per cent in March compared to a year ago and industrial output was up by 7.7 per cent, the fastest growth since June 2021, according to data released on Wednesday.
But in an apparent reference to the trade war with the United States, China’s National Bureau of Statistics said the economy needed more proactive and effective macro policies.
“We should be aware that the external environment is becoming more complex and severe, the drive for growth of effective domestic demand is insufficient, and the foundation for sustained economic recovery and growth is yet to be consolidated,” it said in a statement.
Mr Trump has imposed a 145 per cent tariff on Chinese imports, although he offered a temporary exemption for some electronic goods including smartphones and laptops. These products, which account for almost a quarter of China’s exports to the US, will face a 20 per cent tariff for the time being.
China retaliated with a 125 per cent tariff on all US goods and export restrictions on some rare earths used in the manufacture of high tech products. Beijing is also cutting the number of Hollywood films to be shown in Chinese cinemas and told the country’s airlines to suspend taking delivery of Boeing aircraft.
The White House said on Tuesday that Mr Trump was open to making a deal with China to end the trade war but that it was up to Xi Jinping to make the first move.
“The ball is in China’s court. China needs to make a deal with us. We don’t need to make a deal with them,” press secretary Karoline Leavitt said, quoting the president.
“There’s no difference between China and any other country except they are much bigger. And China wants what we have, what every country wants, the American consumer. Or to put it another way, they need our money.”
Beijing has made clear that it will not follow other countries in approaching Mr Trump as a supplicant and has focused instead on strengthening relationships with other trade partners. Mr Xi is visiting Vietnam, Malaysia and Cambodia this week, urging them to join China in resisting Trump’s “bullying”.
US negotiators have put pressure on some countries to restrict their trade with China in return for tariff relief, in an attempt to weaken Beijing’s position in trade talks with Washington.
