China’s Economy Sees Early 2025 Boost Amid Ongoing Challenges

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    BEIJING – In the first two months of this year, China’s economy exhibited signs of positive momentum, although the housing market’s ongoing troubles continue to exert pressure on growth, as highlighted by figures from the Chinese government on Monday.

    According to the National Bureau of Statistics, retail sales increased by 4% in January and February when compared to the previous year. Additionally, industrial production saw a rise of 5.9%. Such unexpected strength in these areas helped uplift stock markets across Asia.

    A representative from the bureau noted that while the economy is showing promising development, there are still significant domestic and international challenges. The imposition of a 20% tariff on Chinese products by the U.S. President, Donald Trump, poses a potential setback for an economy that heavily relies on exports.

    Fu Linghui, speaking at a news event, commented, “The external environment has become more complex and grim, domestic effective demand is insufficient, some companies are facing difficulties in production and operation, and the foundation for the continuous recovery of the economy is still unstable.”

    China’s prolonged real estate dilemma has been a significant drag on the nation’s economy, impacting consumer confidence and spending habits. The bureau reported a 9.8% drop in real estate investment during the first two months.

    On a slightly brighter note, the rate of decline in real estate prices has moderated, though prices have yet to fully stabilize. Throughout January and February, both new and existing home prices decreased, albeit at a slower rate than much of the prior year.

    Analysts from ING bank predict that while real estate prices may stop decreasing this year, any recovery could be slow to materialize. “February’s data showed that it would be wise for officials not to take their foot off the pedal in terms of policy support,” expressed Lynn Song, ING’s chief Greater China economist, in her analysis.