China's growth slows as economy grows 5.2% in Q2 2025
- China's GDP grew by 5.2% in Q2 2025, slightly lower than the previous quarter's 5.4%.
- Catalysts for positive market movement included Xi Jinping's speech and Nvidia's decision to allow chip sales.
- Concerns about sustainability persist as analysts warn of decreasing consumer demand and ongoing tariff pressures.
In the second quarter of 2025, China reported a GDP growth rate of 5.2%, slightly down from 5.4% in the first quarter. This growth, while better than the 5.1% that analysts had projected, raised concerns among economists regarding future economic sustainability. The government has recently focused on urban development, emphasizing quality and efficiency rather than rapid growth. The announcement of these economic results came after a series of catalysts such as a significant speech by President Xi Jinping and Nvidia's announcement to allow the sale of certain chips to China, which boosted the Asian equities market, especially in Hong Kong, despite lagging Mainland performance. Alongside this, the real estate sector struggled due to a lack of government support for purchasing idle inventories, reflecting ongoing economic challenges. Chinese regulators also approved significant acquisitions, indicating a regulatory environment that is adapting to the current economic climate. However, analysts have pointed to the potential negative impacts of tariff pressures from the US and declining consumer confidence, contributing to a worrying economic outlook. The contrasting interpretations of the economic data reveal a divide in perspectives on China's current economic health, with some emphasizing the steady growth while others worry about the underlying issues relating to consumption and real estate instability.