China’s economy grew 5.4% in the first quarter as exporters rushed to beat Trump’s tariffs

BANGKOK (AP) — China’s economy expanded at a 5.4% annual pace in January-March, the government said Wednesday, supported by strong exports ahead of U.S. President Donald Trump’s rapid increases in tariffs on Chinese products.

With the trade war clouding the outlook, analysts are forecasting that the world’s second largest economy will slow significantly in coming months, however, as tariffs as high as 145% on U.S. imports from China take effect. Beijing has hit back at the U.S. with 125% tariffs on American exports, while also stressing its determination to keep its own markets open to trade and investment.

Chinese leader Xi Jinping’s visits is visiting several other Asian countries this week as he makes a case for free trade, presenting China as a source of “stability and certainty” in uncertain times.

Xi was visiting Vietnam, Malaysia, and Cambodia, while the U.S. announced that a senior State Department official, Sean O’Neill, would be traveling this week to Vietnam’s capital Hanoi and to Ho Chi Minh City, to Cambodia’s Siem Reap and to Tokyo.

China also has been highlighting its focus on trade with countries other than the United States at various trade fairs that are showcasing its vast market and competitiveness as a manufacturing giant.

At China’s Canton trade fair, in the southern city of Guangzhou, exporters were emphatic about the need to look beyond selling to Americans.

“We need to diversify our market. When the West is dark, the East is bright. The global market is huge,” said Wallace Huang, the export business director of Guangdong Weking Group, which makes rice cookers. “In recent years, our exports to the U.S. have slowly been declining.”

The trade factor

Exports helped China’s economy expand at a 5% annual rate in 2024 and this year’s official target is about 5%.

In the near term, the tariffs will put pressure on China’s economy, but they won’t derail long-run growth, Sheng Laiyun, a spokesperson for the National Bureau of Statistics, told reporters. He noted that China’s exports to the United States have fallen to less than 15% of total exports from more than 19% five years ago.

“China’s economic foundation is stable, resilient and has great potential. We have the confidence, ability and confidence to cope with external challenges and achieve our established development goals,” Sheng said.

In quarterly terms the economy grew 1.2% in January-March, slowing from 1.6% in the last quarter of 2024.

Chinese exports surged more than 12% from a year earlier in March and nearly 6% in U.S. dollar terms in the first quarter, as companies rushed to beat Trump’s tariffs. That has supported robust manufacturing activity in the past several months.