Why the 5.4 percent GDP growth is more than just a number

Editor's note: Imran Khalid, a special commentator on current affairs for CGTN, is a freelance columnist on international affairs. The article reflects the author's opinions and not necessarily the views of CGTN.

There's a kind of quiet confidence embedded in numbers that beat expectations. In China's case, a 5.4 percent GDP growth in the first quarter of 2025 doesn't just signal resilience – it tells a story of determination, deft policymaking, and a country that still refuses to be boxed in by gloomy forecasts or geopolitical rivalries. This growth wasn't magic, nor was it simply statistical sleight-of-hand. It was the outcome of intentional choices, shrewd pivots, and a bit of that old Chinese trait – dogged pragmatism. The 5.4 percent GDP growth is not merely an achievement in today's world economy; it's a statement of intent. For a nation navigating a stormy global climate – with U.S. tariffs pressing on one side and domestic headwinds on the other – this growth figure shows that China is playing both offense and defense with surprising agility.

Take consumer spending, for instance. Retail sales rose 5.9 percent year-on-year in March, outpacing analyst expectations. While Western headlines often harp on China's "lackluster domestic demand," the rebound in consumption tells a different story. Chinese consumers, it appears, are not as downbeat as some would have us believe. The country's middle class, a growing and increasingly sophisticated demographic, has shown a renewed willingness to spend. Beijing's targeted consumption vouchers and subsidies played their role too, nudging buyers back into shopping malls and onto e-commerce platforms. It's retail therapy, the Chinese way – with macroeconomic scaffolding.

Then there's industrial output – up a strong 7.7 percent in March. That's more than a recovery – it's a full-throttle upswing. China's manufacturing sector is evolving faster than many realize. Increasingly, it's about high-tech exports, EVs, robotics, and renewable energy components. The "Made in China 2025" vision, once scoffed at by some, is gradually crystallizing in the form of smarter, cleaner, and more globally competitive industries. Yes, there's been help from a flurry of government stimulus, but stimulus without structure is little more than a sugar high. What we're seeing here is a careful calibration – lower interest rates to ease business costs, tax breaks for start-ups, and a deliberate tilt toward strategic industries that are expected to shape the global economy in the next decade.

Unemployment, that key measure of public sentiment, is also pointing in the right direction. The urban unemployment rate edged down to 5.2 percent in March, marking a notable improvement from February's 5.4 percent. This isn't just statistical comfort – it speaks to a labor market that is healing, even amid global dislocations. Young graduates are finding work in China's growing services sector and tech start-ups, while small- and medium-sized enterprises – often overlooked in macro analyses – are benefiting from easier access to credit and a more forgiving regulatory environment. In other words, China isn't just growing; it's adapting.

Another positive pillar? Infrastructure investment. Fixed-asset investment rose 4.2 percent in the first quarter, propelled primarily by robust spending on public infrastructure and manufacturing. While real estate continues to be a drag, the shift toward government-led infrastructure projects has cushioned the blow. Roads, railways, ports – these are not just symbolic of Chinese growth; they are its arteries. More importantly, infrastructure spending has a long tail. It supports employment, boosts demand for domestic commodities, and enhances long-term productivity. It's not the flashiest lever to pull, but it is one of the most reliable.

Perhaps the most underappreciated element of China's growth story is its rise as a hub of innovation. Consider the quiet but profound announcement earlier this year: a Chinese startup unveiling an AI model said to rival OpenAI. Now, whether that turns out to be true or mere marketing is beside the point. What matters is the signal – it shows how deeply China is investing in the future. From semiconductors to green energy and artificial intelligence, the country is pushing hard to close the gap with the West. And while innovation doesn't show up overnight in GDP figures, it does build momentum over time. Beijing's renewed emphasis on education, R&D funding, and digital infrastructure is a long-term bet – and thus far, one worth watching.

Of course, no discussion of China's economy is complete without acknowledging the growing shadow of U.S. tariffs. The tit-for-tat trade war – now escalating into a "Trade War 2.0" – is likely to dent exports in the months to come. Some of the Q1 strength was likely driven by a "pre-tariff rush" as exporters hurried to ship goods before the new levies hit. 

Still, even here, China has shown adaptability. The share of exports going to the U.S. has declined to 14.7 percent, down from nearly 20 percent in 2018. That's not just a shift in trade patterns; it's a strategic pivot. China is diversifying its markets – deepening trade with Southeast Asia, the Middle East, and even parts of Latin America and Africa. 

For now, the numbers speak for themselves. And what they say, quietly but unmistakably, is that China's economy remains a force to be reckoned with – not because it's unstoppable, but because it still knows how to steer the storm.

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