China’s GDP Growth Slows to 4.5%, Raising Global Trade Concerns

By Tristan, Contributor
March 21, 2025 – 3:00 PM GMT, Beijing, China

China’s National Bureau of Statistics reported today that its GDP grew just 4.5% in 2024, the slowest pace since 2022, rattling markets tied to the world’s second-largest economy, valued at $18 trillion. The figure, down from 5.2% in 2023, reflects slumping factory output—down 3%—and a 5% drop in exports, per customs data. Premier Li Qiang blamed “external headwinds,” pointing to U.S. tariffs and a global demand dip, as Shanghai’s stock index fell 2%.

The slowdown’s roots are deep. Industrial production, 30% of GDP, stalled as steel and electronics output shrank—steel’s off 8% since 2023, hit by a U.S. 25% levy floated today (see trade deficit story). Consumer spending, up just 2%, lags too; real estate, a $4 trillion sector, remains mired in debt—Evergrande’s $300 billion default still echoes. Beijing’s $500 billion stimulus last fall—roads, rail—lifted growth from a projected 4%, but not enough.

Global ripples are immediate. China’s imports—$2.5 trillion yearly—fell 4%, denting commodity giants; Australia’s iron ore exports, 60% China-bound, face a $10 billion hit, per BHP. The U.S., with $400 billion in Chinese goods yearly, sees cheaper imports—electronics down 5%—but exporters like Boeing lose; aircraft sales to China dropped 10%. Japan and Germany, reliant on China’s factories, brace for supply snags—Toyota’s output’s already off 3%.

Policy’s in flux. The People’s Bank of China held rates at 3.5% today, but analysts expect a Q2 cut to 3%—$200 billion in loans could flow. Li teased “targeted measures” at a Beijing presser—think tax breaks for tech—but no bazooka; the $1 trillion debt ceiling caps big spending. Critics say Xi Jinping’s focus on security—$300 billion defense budget—saps economic juice, with state firms up 5% while private ones flatline.

Trade partners fret. The IMF cut its 2025 global growth forecast to 3% from 3.3%, citing China’s “soft landing.” Oil’s steady at $75 a barrel—China’s 15% of demand isn’t budging—but copper, at $4 per pound, slid 5%; Chile’s exports wobble. The yuan, pegged at 7.2 to the dollar, faces devaluation pressure—5% could boost exports but spike import costs like U.S. soy ($15 billion yearly).

Consumers feel it too. Urban unemployment hit 5.5%, up from 5%; youth (16-24) are at 15%, per NBS—graduates flood service jobs as tech hiring slows. Retail’s grim—$1.5 trillion in sales grew 2%, with luxury off 10%; LVMH’s China revenue dipped $2 billion. Rural areas, 40% of the 1.4 billion population, lag—$400 average income versus $1,200 urban—widening unrest risks.

Beijing’s doubling down. A $100 billion “Made in China 2025” push—AI, chips—aims to offset export woes; Huawei’s 6G trials lead, but U.S. bans cap gains. The Belt and Road, $1 trillion spent, slows—Pakistan’s $20 billion rail stalled. Xi’s set for an April summit with EU leaders; trade’s the agenda, but 4.5% signals leverage loss—Europe’s $180 billion surplus looms large.
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Markets close uneasy. The MSCI Asia-Pacific index dropped 1.5%, with $50 billion in outflows feared by June. China’s 4.5% isn’t collapse—India’s 6.5% outpaces—but it’s a warning; $18 trillion can’t stall without drag. Li’s “resilience” mantra holds for now—Q2’s the test as global trade hangs in the balance.
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