China’s Growth Outlook: Consumption, Trade, and Market Trends

Natixis Asia Pacific Chief Economist Alicia Garcia Herrero noted the strategic implications of the announcement, commenting:

“Tariff Man forgot his tariffs! Trump clearly looking for a grand bargain with China to which nobody else is invited.”

However, ‘on January 22, refocused on China and reportedly announcing plans for 10% tariffs on China, effective February 1. China’s latest trade data likely added pressure, with the total value of imports and exports surpassing CNY 4 trillion for the first time. Its trade surplus with the US widened to $361 million in 2024, driven by rising exports to the US and declining imports from the US.

Is China Progressing toward a Consumption Economy?

President Trump’s tariff maneuvers emphasize the urgency for China to accelerate its transition to a consumption-driven economy. Export-reliant economies could experience heightened uncertainty amid rising US protectionism. A greater focus on domestic demand could help Beijing achieve sustainable growth.

On Wednesday, January 22, East Asia Econ, a research service, remarked on recent consumption trends, saying,

“Official data don’t suggest weak consumption. The household survey suggests it is back at the pre-COVID trend, and rose relative to GDP in 2024. Retail sales don’t show this strength because of rising spending on services. The chart clearly reflects an improvement. However, household consumption continues to languish below pre-Global Financial Crisis levels, the boom days of China’s economy.”