- Consumer spending climbs 4% year-over-year in early 2025
- Manufacturing output expands by nearly 6% amid production surges
- Property investments plummet 9.8% as sector struggles to stabilize
China's economic landscape revealed mixed signals during the first quarter of 2025, with government data highlighting both progress and persistent vulnerabilities. While retail figures demonstrated renewed consumer confidence, analysts warn the recovery remains unevenly distributed across sectors. The manufacturing industry's strong performance, particularly in electronics and renewable energy equipment, contrasts sharply with continued contractions in construction-related fields.
Beijing's policy makers face mounting pressure to address the property sector's 9.8% investment decline, which continues to suppress household spending power. Major coastal provinces like Guangdong, where real estate contributes 18% to regional GDP, report increased business closures tied to construction material suppliers. A Shenzhen-based developer revealed to state media that housing inventories now require 23 months to clear at current sales rates, nearly double pre-crisis levels.
International trade complications further cloud the outlook, with U.S. tariffs disrupting export-reliant manufacturers. Zhejiang textile factories report order reductions of up to 15% since January, prompting layoffs across industrial clusters. Conversely, the green technology sector shows resilience, with electric vehicle battery exports surging 31% through strategic EU partnerships.
Economists emphasize the need for targeted stimulus, particularly in boosting domestic innovation. Accelerating approvals for AI-driven manufacturing projects could offset traditional sector losses, suggests Dr. Li Wei of Tsinghua University. Recent provincial initiatives, like Shandong's tax breaks for smart factory upgrades, have already attracted $2.4 billion in private tech investments this quarter.
While property price declines slowed to 0.8% monthly drops compared to 2024's 2.1% averages, analysts caution against premature optimism. ING's Greater China chief notes, Stabilizing home values requires time—we project Q3 as the earliest turnaround window. With global demand uncertainties persisting, China's path to sustained growth hinges on balancing export diversification with internal consumption drives.