China’s Q1 Growth Hits 5.4% — But Will the Renewed US-China Trade War Pull It Down?
At the start of 2025, China’s economy took off faster than expected. With a Q1 growth rate of 5.4%, many saw it as a sign of strong recovery. But the excitement didn’t last long.
Former U.S. President Donald Trump made a dramatic comeback, and with him came the revival of the US-China trade war — casting a shadow over future growth.
And it’s not just China that’s affected. Economies deeply tied to China, such as Singapore, may also feel the tremors.
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China’s Surprising Q1 Growth: 5.4% That Beat Expectations
According to China’s National Bureau of Statistics, the country’s GDP in Q1 2025 reached 31.8758 trillion yuan (approximately 6,187 trillion KRW), reflecting a 5.4% increase from the previous year.
What powered this growth? Mainly the high-tech manufacturing sector:
| Sector | YoY Growth Rate |
|---|---|
| New energy vehicles | +45.4% |
| 3D printing machines | +44.9% |
| Industrial robots | +26.0% |
Trump’s Return Brings Back Tariffs and Tension
Trump’s return to the presidency also meant the return of tariffs. He swiftly imposed up to 145% tariffs on Chinese imports — reigniting the US-China trade war.
China quickly retaliated with 125% tariffs on U.S. goods.
Economically, this war poses a serious threat to China’s export-driven industries. Barclays warned that China’s GDP growth could drop by 1.5 to 3 percentage points due to the trade fallout.
Singapore Feels the Ripples of China’s Slowdown
In 2024, 13.9% of Singapore’s exports went to China. Singapore is one of China’s closest trading partners in Southeast Asia.
Key industries — semiconductors, machinery, precision chemicals — are highly reliant on Chinese demand. And a decrease in Chinese tourists could also hit Singapore’s retail, hospitality, and aviation sectors hard.
According to Monetary Authority of Singapore (MAS), Singapore’s GDP growth could drop by up to 1 percentage point if the trade war persists.
China’s Response: Policy Firepower on Full Display
China isn’t standing still. Its policy toolbox is wide open:
- Boosting domestic consumption: Vouchers, tax reliefs
- Upgrading industrial structure: Investment in AI, biotech, semiconductors
- Monetary and fiscal stimulus: Rate cuts, more government bonds
Still, there’s trouble brewing inside: real estate market slump continues, youth unemployment remains in double digits, and deflation concerns are on the rise.
What Comes Next? Global Eyes on China
While Q1 performance looks solid on the surface, the sustainability of China’s recovery is uncertain amid renewed trade tensions.
Countries like South Korea, Singapore, Vietnam, and Taiwan, all deeply integrated with China’s economy, must brace for potential disruptions.
Here’s what to watch moving forward:
- China’s pivot to emerging markets: MENA, Southeast Asia, Africa
- De-dollarization efforts: Expansion of the yuan zone
- Domestic self-reliance: Localizing supply chains
Each country must now decide whether to adapt, diversify, or lean into this shifting economic gravity.
Frequently Asked Questions (FAQ)
Is 5.4% growth really that good for China?
Yes and no. The figure looks strong, but structural risks and export instability raise doubts.
Can tariffs actually go that high?
Yes. Trump has done it before, and similar promises are part of his current campaign platform.
What can Singapore do to protect itself?
Diversifying supply chains, strengthening intra-ASEAN trade, and expanding EU and India relations are possible strategies.
Will fewer Chinese tourists really hurt Singapore?
Absolutely. Retail, food & beverage, and tourism industries will be affected.
Will Korea also be impacted?
Yes. Korea’s economic exposure to China is substantial, and it faces similar risks.
This isn’t just a tug-of-war between two superpowers. It’s a game with global consequences — and countries like Singapore are caught in the middle.
Honestly? It’s a bit unsettling right now. But maybe, just maybe, this is the shake-up we needed to prepare for a very different global economy.
china, economic growth, trade war, singapore, tariffs, gdp, export decline, policy response, global economy, southeast asia