China’s Q1 Growth: Solid Start, But What's Next? – Charts of the Week
"Charts of the Week" is Baiguan's series that features key data points to help you quickly grasp the general state of affairs in China in just a few minutes. We handpick the highlights of the data charts from a variety of sources, analyzing and delivering insights trusted by 100+ top institutional and corporate clients worldwide at BigOne Lab. Don't forget to subscribe before you continue reading!
China’s Q1 GDP delivered a pleasant surprise, growing at 5.4% year-on-year, comfortably beating market expectations. Nevertheless, the country's growth outlook remains uncertain amid renewed U.S. tariff pressures and broader global economic challenges. The need is clear: China not just requires a decent level of domestic consumption but enough internal demand to counteract the drag from tariffs and ultimately achieve Beijing’s strategic pivot toward a consumption-driven economy.
China's manufacturing capacity was built to serve global demand, and pivoting to grow domestic consumption sufficiently to absorb this supply can't be easy, even without the complications of a trade war.
Borrowing from the future?
Despite the robust first quarter, several critical questions linger. The impressive Q1 export figures partly reflected front-loaded orders ahead of tariff implementation. As these tariffs ripple through global trade, international demand may weaken further. Thus, even though direct Chinese exports to the U.S. represent a limited share of GDP, the overall export sector could still suffer.
A similar front-loading phenomenon appears on the consumer side as well. China's state subsidy programs for consumers have significantly stimulated purchases in categories such as home appliances, digital electronics, and electric vehicles. However, these are largely big-ticket, non-recurring expenditures. As households rush to capitalize on these incentives, an important question emerges: What happens when these subsidies inevitably wind down?
With traditional growth engines like exports and real estate losing momentum, China's growth strategy now depends significantly on household consumption stepping up to drive future expansion.
Wall Street, for its part, isn’t dismissing the tariff threat lightly. Several major banks, including Goldman Sachs, UBS, and JPMorgan, have already lowered their 2025 China GDP forecasts by 1–2 percentage points.
Can China realistically achieve its targeted GDP growth of around 5% in 2025? Ultimately, the answer will depend heavily on income expectations (employment, salary outlook) and the wealth effect (the real estate market). Regardless of any additional stimulus measures Beijing may roll out (and more are anticipated), these key indicators will remain my primary focus to holistically assess China's economic health and evaluate the effectiveness of policy interventions.
In this edition of the "Charts of the Week" series, I will closely track these key indicators to understand China’s economic outlook. You'll get a holistic, objective snapshot of China's economic landscape in under five minutes.
Real estate
Existing home sales have largely stabilized: As of April 12, weekly transaction value in 90+ cities across China rose 25% YoY (-2% WoW).
However, the recovery is uneven: core regions in more developed cities (Tier-1, new Tier-1, and Tier-2) have led the rebound, while lower-tier cities experienced a much slower recovery. As of April 12, weekly transaction values in Tier-1, new Tier-1, and Tier-2 cities rose by 60%, 17%, and 26% YoY, respectively, with Shanghai notably surging 126%.
"Stabilized" here refers to overall sales volume not declining further, but prices are still slipping: as of April 12, new listings in Tier-1 and new Tier-1 cities rose 10% WoW, while listing prices in Tier-1, new Tier-1, and Tier-2 cities each edged down slightly by 0.2% WoW.
Job & youth unemployment
Keep reading updates on jobs, youth unemployment, social media sentiments toward "salary/layoffs/tariffs/consumption downgrade", and online consumption. To get a sense of what is offered, you are welcome to check out this older post in the same series: Charts of the Week. You can also get free access by sharing us.
For more timely discussions, consider joining our private Discord channel for paid readers. To enhance your decision-making, we also provide a daily digest of equity research from top sell-side institutions, covering macro trends and specific company analysis. Each day of digests includes a 3-minute audio summary to make it easy to absorb key insights quickly.