China's Q1 GDP Grows 5.4% Year-on-Year, Beating Expectations! Industrial Production Accelerates

TradingKey - On April 16, 2025, China’s National Bureau of Statistics announced that the country’s first-quarter Gross Domestic Product (GDP) grew by 5.4% year-on-year,   reaching 31.8758 trillion yuan, surpassing Reuters' forecast of 5.1%.

Broken down by sector,  the primary industry added 1.1713 trillion yuan, marking a  3.5% increase year-on-year; the secondary industry contributed 11.1903 trillion yuan, up 5.9%; and the tertiary industry reached 19.5142 trillion yuan, rising by 5.3%.

According to the bureau,  macroeconomic policies continued to take effect during the first quarter, supporting a stable and positive start to the year. However, the report also warned that external conditions are becoming increasingly complex and challenging, while domestic demand still lacks sufficient momentum. As such, the foundation for sustained economic recovery remains fragile and requires further reinforcement. 

In response, China plans to implement more proactive and effective macroeconomic policies, strengthen its domestic economic cycle, and actively respond to uncertainties in the external environment.

According to official documents, the main highlights driving Q1 GDP growth include:

1. Agriculture production performed well, with stable growth in livestock farming.
2. Industrial production accelerated, particularly in equipment manufacturing and high-tech industries. The value-added output of large-scale industrial enterprises nationwide grew by 6.5% year-on-year, with equipment manufacturing surging by 10.9% and high-tech manufacturing rising by 9.7%.
3. The service sector grew rapidly, with modern services showing strong momentum.
4. Retail sales rebounded, with significant growth in trade-ins and related goods.
5. Fixed-asset investment remained stable but increased slightly, with robust growth in high-tech industries.
6. Goods imports and exports maintained growth, with further optimization of the trade structure.
7. Consumer prices remained largely stable, though producer prices declined.
8. Employment conditions were generally stable, with the urban surveyed unemployment rate slightly decreasing.
9. Household income grew steadily, with rural residents’ income growth outpacing that of urban residents.

During this year’s National People’s Congress, China set a GDP growth target of 5% for 2025. Analysts noted that, given the prolonged downturn in the real estate market, weak domestic demand, and U.S. President Donald Trump’s sweeping tariff policies, the target is ambitious.

According to People’s Daily reported, that  2003—excluding 2020, which was heavily impacted by the COVID-19 pandemic—China has consistently set quantitative annual economic growth targets. From 2020 to 2022, average annual growth was approximately 4.5%, followed by 5.2% growth in 2023 and 5.0% in 2024. In recent years, China’s economy has remained "on track," with year-end results consistently meeting expectations.

To address growing challenges, People’s Daily recently reported that monetary policy tools, such as reserve requirement ratio (RRR) cuts and interest rate reductions, remain available and flexible. Authorities have preserved sufficient room for adjustment and may deploy these tools as needed based on evolving economic conditions.