Chinese Consumers Defy Trade Barriers: Retail Grows Despite Economic Challenges
Peking, maandag, 16 juni 2025.
In May 2025, the Chinese retail sector showed unexpected resilience with a growth of 6.4%, while industrial production slowed down. This performance comes amid ongoing trade tensions with the United States and declining export figures. Despite higher tariffs that reduced exports to the US by 35%, Chinese consumers managed to maintain domestic demand. Analysts point to promotions and online shopping festivals as driving factors behind this growth, while simultaneously warning about potential future economic challenges due to persistent trade barriers and declining consumer confidence.
Economic Resilience in a Challenging Trade Environment
The Chinese retail sector demonstrated a surprising performance last Monday, with a year-on-year growth of 6.4% in May 2025 [1][2][3]. This growth comes amid ongoing trade tensions with the United States, with Chinese exports to the US showing a sharp decline of 35 percent [4]. Despite challenging economic conditions, Chinese consumers managed to maintain domestic demand.
Industrial Production and Consumer Spending
While industrial production in May 2025 grew by only 5.8% - a slowdown compared to previous months - the retail sector remained remarkably resilient [1][5]. Analysts point to factors such as promotions and the major online shopping festival on 18 June as key drivers of this growth [4]. Lynn Song from ING Economics warns, however, that a sustainable recovery of consumption depends on improving consumer confidence [2].
Future Perspectives and Challenges
Zichun Huang from Capital Economics predicts that export growth is likely to slow further by the end of the year, particularly due to ongoing tariffs and broader trade restrictions [1]. The Chinese economy faces the challenge of stimulating domestic consumption while external trade limitations increase [4][5]. [Alert! ‘Uncertainty surrounding future trade relations between China and the US’]