China's economy slows in April as trade war blues hit retail sales,
housing and investment
[May 19, 2025] By
ELAINE KURTENBACH
China’s economy showed signs of slowing in April as President Donald
Trump's trade war took a toll, with retail sales, property and
investment coming in weaker than economists had forecast.
Industrial production slowed as Trump's painfully high tariffs of up to
145%, and 125% retaliatory duties imposed by Beijing, took effect and
shipments were curtailed.
National Statistics Bureau spokesperson Fu Linghui said the general
trend was positive though he pointed to “external shocks” that had
gained intensity.
“It should also be noted that there are still many outside unstable and
uncertain factors, and the foundation for the continued recovery and
improvement of the national economy needs to be further consolidated,”
Fu said.
Here are a few key indicators reported Monday.
Retail sales
Chinese consumers have been holding back after the shocks of a prolonged
downturn in the housing market that is the source of much household
wealth. Retail sales rose 5.1% from a year earlier in April, below
economists' expectations for a 6% increase.
Fu said Beijing would continue to focus on supporting job creation and
spurring more domestic demand.
He also said China must stop prices from falling. The consumer price
index fell 0.1% in April. Such deflation is both a symptom of weak
demand and also a factor behind shoppers' reluctance to spend, in hopes
of getting better deals later.
“The current overall price level is low, which puts pressure on
production and companies' operations and affects jobs and incomes, so
it's important to promote a reasonable recovery of prices,” Fu said.
On the U.S. side, consumer sentiment has fallen slightly in May for the
fifth straight month, with Americans increasingly worried that the trade
war will worsen inflation.
Manufacturing
Industrial production rose 6.1% from a year earlier, slowing from 7.7%
in March as tariffs and other trade barriers bit into exports.
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Workers load container at a container terminal, in Qingdao in east
China's Shandong province on May 16, 2025. (Chinatopix Via AP)
 The truce in Trump's trade war with
China has helped, Fu said, calling it “conducive to the growth of
bilateral trade and the recovery of the world.”
With tariffs paused for 90 days to allow time for talks, shipments
have revived as businesses rush to meet back-to-school and other
seasonal deadlines.
But even before Trump took office for the second time in January,
China was under pressure from its trading partners for relying too
heavily on exports to absorb its excess industrial production.
And if output continues to outpace demand from businesses and
consumers, prices will keep falling.
“Export-driven gains in factory output could continue given China’s
manufacturing competitiveness and frontloaded orders before the end
of the 90-day truce, but this is coming at a persistent deflationary
cost,” Louise Loo of Oxford Economics said in a report.
Investment and property sales
The government reported that fixed asset investment in such things
as factories and equipment rose 4% in April in the first four months
of the year.
However, property investments fell 10.3% year-on-year in January to
April. New home prices also edged lower.
While manufacturing held up better than expected, the pressures from
trade are complicating Beijing's effort to keep turn the housing
market around and keep the economic recovery on track.
“Establishing a trough on a national level is taking some time, as
the recovery of the property market remains uneven and gradual. It’s
possible that tariff-related pessimism and uncertainty kept more
buyers on the sidelines in April,” Lynn Song, chief economist for
Greater China at ING Economics said in a report.
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