China’s economy grew 5.2% in the April–June quarter, slightly above expectations and exceeding Beijing’s full-year target. Strong exports—mainly to markets outside the United States—helped support manufacturing and offset pressure from ongoing US tariffs.

The 5.2% GDP growth beat the 5.1% forecast by economists but was slightly below the 5.4% growth seen in the first quarter.

Chinese stock markets in Hong Kong and the mainland held steady after the data was released. The yuan and bond yields remained largely unchanged.

In June, industrial output rose 6.8%, beating forecasts. However, retail sales grew just 4.8%, missing expectations. Fixed-asset investment increased 2.8% in the first half of the year, while property investment dropped by 11.2%. The urban unemployment rate held steady at 5%.

Despite a 24% drop in exports to the US, China’s overall exports remained strong. Government spending and stimulus measures helped support domestic demand and construction activity.

Authorities now have more room to respond to future risks, especially as the US tariff truce is set to expire in mid-August. The central bank has avoided large-scale easing, instead using targeted tools to support key sectors.

Government subsidies, funded through special bond sales, have boosted purchases of home appliances and smartphones, as well as business investment. More than 7 trillion yuan worth of government bonds are expected to be issued in the second half of 2025 to support growth further.

Still, challenges remain. Domestic demand is weak, the property sector continues to struggle, and deflation risks persist. Analysts expect increased support for real estate and possibly new stimulus measures if trade tensions with the US escalate.

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