How China Maintains Economic Vitality Amidst Trade War with the U.S.

Overview

China's economy remains resilient despite the ongoing trade tensions with the United States. This resilience is drawing increasing attention as trade discussions between Chinese Vice Premier He Lifeng and U.S. representatives are set to take place at the end of this month in Sweden. These meetings are not merely diplomatic gestures; they underscore China's enduring economic vitality in a complex international landscape.

Economic Growth Statistics

Recent statistics reveal the robustness of the Chinese economy. In the first half of 2025, China recorded an impressive year-on-year GDP growth of 5.3%, exceeding market expectations despite global economic challenges. This growth reflects not just a temporary surge, but also the structural resilience and adaptability of the economy, which continues to evolve and modernize.

Domestic demand has become a crucial driver of economic expansion, contributing to 68.8% of GDP growth during this period. Initiatives such as large-scale equipment modernization and consumer goods exchange programs have effectively spurred spending and shielded the Chinese economy from external shocks. In the first five months of 2025, the consumer goods exchange program generated sales worth 1.1 trillion yuan ($153.1 billion), surpassing the total for all of 2024. This initiative led to a year-on-year increase of 5% in retail sales of consumer goods over the last six months, outpacing the growth rate seen in the first quarter.

Diversification and Trade Partnerships

Although external uncertainties have exerted some pressure, China's diversified trade relationships and stable production in high-tech and service sectors have provided strong support for the economy. Despite a decline in trade with specific Western nations, there was a growth in trade with partners under the Belt and Road Initiative, ASEAN countries, the European Union, and African nations, recording increases of 4.7%, 9.6%, 3.5%, and 14.4%, respectively.

The development of these trade relations has allowed China to reduce its dependency on a single market, thus mitigating the impact of protectionist policies from some Western economies. China's resilience impacts extend beyond its borders. As a key engine of global economic growth, China's stable economic performance fosters confidence in international markets and provides a stabilizing influence amid global uncertainties.

Future Outlook and Collaboration

With a consistent focus on qualitative economic growth and opening up to the world, China positions itself as a reliable engine for mutual prosperity for the international community. A recent report from the U.S.-China Business Council indicates that in 2024, 82% of American companies operating in China turned a profit. While many expressed concerns about uncertainties in U.S.-China relations and tariffs, the Chinese market remains critical to their strategies.

Despite the challenges presented by trade tensions, these factors have not diminished the resilience of China's economy. The upcoming discussions between Beijing and Washington in Sweden signal China's readiness to resolve disputes through dialogue. Although obstacles persist, China's ability to maintain economic growth, adapt to changing global circumstances, and constructively engage with international partners indicates a future full of shared opportunities and mutual development.