China’s factory output beats forecasts after rapid expansion, weathers tariffs

Monday, May 19, 2025 - Factory output in China expanded more rapidly than anticipated in April, according to data released Monday, May 19, by the National Bureau of Statistics (NBS), indicating resilience in the face of ongoing economic pressures, including a prolonged trade dispute with the United States.

Industrial production in the world’s second-largest economy grew 6.1 percent year-on-year, surpassing the 5.7 percent forecast in a Bloomberg survey. While the figure was lower than the 7.7 percent growth recorded in March, it nonetheless signals continued strength in the manufacturing sector.

The NBS said the national economy “withstood pressure and grew steadily in April,” despite a “complex situation of increasing external shocks and layered internal difficulties and challenges.”

The announcement follows a recent agreement between China and the United States to suspend certain tariffs on each other’s goods for 90 days, a development that has raised optimism about a potential easing of global economic tensions.

Despite positive signs in factory output, other indicators painted a more mixed picture. Retail sales—a key measure of consumer demand—increased 5.1 percent year-on-year, falling short of the 5.8 percent growth projected by Bloomberg and representing a slowdown from March’s 5.9 percent increase. The data underscores continued weakness in domestic consumption, a concern for Beijing as it targets economic growth of around five percent this year.

The country’s surveyed unemployment rate edged down slightly to 5.1 percent in April from 5.2 percent in March, according to the NBS.

Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said economic activity showed only marginal softening in April, noting that exports remained resilient even in the face of elevated US tariffs. “Now that the tariffs have been cut significantly, I expect exports to remain strong,” Zhang wrote, predicting stable economic momentum in the second quarter.

Meanwhile, challenges persist in China’s property sector, once a key pillar of growth. The NBS reported that prices of new residential properties fell in 67 out of 70 surveyed cities in April, reflecting ongoing consumer caution and continued weakness in the real estate market.