China Market Intelligence

China’s economy got off to a strong start in 2025, but it is uncertain whether this momentum can be maintained amid an intensifying trade war with the United States. According to data released by the National Bureau of Statistics, China’s first quarter real GDP reached 31.88 trillion yuan ($4.37 trillion), increasing 5.4% year-on-year and surpassing most forecasts.

Over the past month, US-China trade tensions have escalated to unsustainable heights. In response to new US tariffs, China imposed a 125% tariff on all US imports, noting that it will not engage in any further tariff increases as part of a “numbers game.”

China has seen several high-level personnel changes at the central and provincial levels over the last few months. On April 16, Li Chenggang (李成钢) was appointed vice minister and international trade representative of the Ministry of Commerce (MOFCOM), succeeding Wang Shouwen (王受文).

At the annual two sessions meetings earlier this month, China unveiled its 2025 government budget, detailing its spending priorities for the year. Aligned with the themes of the Government Work Report, which includes the highest projected deficit-to-GDP ratio in three decades, the budget enables greater spending to allow for a more proactive fiscal policy.

The Trump administration’s approach to trade with China is a tangled web of existing and potential future trade actions. While there has not been a coordinated effort to clarify exactly how the administration will roll out new actions, the threat still looms.

Senior Chinese policymakers are once again signaling their embrace of the foreign business community with a new action plan for boosting foreign investment in China. The plan marks a focused government effort to incentivize more foreign participation in the China market and identifies a range of investment opportunities in mostly services sectors.

The Chinese People’s Political Consultative Conference will begin on March 4, followed by the National People’s Congress (NPC) on March 5. Together, these meetings—known as the “two sessions”—serve as China’s most important annual political event, shaping the direction of national economic and social policy.

The Shanghai Free Trade Zone (FTZ) and associated Lingang New Area recently introduced the first batch of general data negative lists for cross-border data transfers (CBDTs). The lists cover both “personal information” and “important data” in reinsurance, international shipping, retail, catering, and hospitality.

Late last year, China’s State Administration for Market Regulation (SAMR) released a draft implementation plan for the Regulations on Fair Competition Review (RFCR)—a regulatory overhaul reflecting a decade-long push to ensure that government policies are non-discriminatory and comply with fair competition principles.