China’s economic data for April revealed signs of fatigue, with several key indicators showing a slowdown. Total retail sales of consumer goods fell below expectations, industrial value added declined month-on-month, and real estate investment and sales remained sluggish. Experts analyzed that the data reflects weak domestic demand, structural decline in the real estate industry, and intensified external uncertainties, collectively posing a composite pressure on economic recovery. Despite a temporary easing of tensions in the China-US trade war providing some breathing space for the economy, the overall momentum weakening trend is evident, and the prospects for recovery remain uncertain.
According to the latest data released by the National Bureau of Statistics of the Communist Party of China, in April 2025, China’s economy continued its downward trend, with significant pressure on the real economy. Total retail sales of consumer goods reached 3.7174 trillion yuan, with a year-on-year growth of 5.1%, lower than the 5.9% in March. Industrial value added increased by 6.1% year-on-year, down from 7.7% in March.
Both state-owned enterprises, foreign-invested enterprises, enterprises invested by Hong Kong, Macao, and Taiwan, and private enterprises saw a year-on-year decline in industrial value added, indicating that the economic downturn has affected various market entities, resulting in a significant weakening of economic vitality.
In terms of industry performance, among the 41 major industrial categories, 23 industries saw a year-on-year decrease in value added. Key industries such as food processing, textiles, chemical raw materials and chemical product manufacturing, ferrous metal smelting and rolling processing, general equipment manufacturing, specialized equipment manufacturing, automobile manufacturing, railway, shipbuilding, aerospace, and other transportation equipment manufacturing all experienced declines. Particularly, the automobile manufacturing industry saw a substantial year-on-year decline of 31.8%, becoming a hard-hit area.
In terms of production output, out of 617 major industrial products, as many as 448 saw a year-on-year decrease in output, accounting for over 70%. Key industrial products like steel, cement, ethylene, automobiles, electricity generation, and crude oil processing all experienced varying degrees of decline, reflecting sustained weak market demand with pressures on both supply and demand sides.
Overall, industrial enterprises are facing multiple pressures including rising costs, insufficient orders, and weak demand, with the business climate significantly deteriorating in several key sectors, indicating that China’s economy is undergoing a significant adjustment, with an unstable foundation for recovery.
American economist Davy J. Wong, in an interview with Dajiyuan, noted that China’s retail sales hitting a new low for the year indicates weak domestic demand. While industrial value added was slightly higher than expected due to new energy and high-end manufacturing industries, the overall slowdown reflects inadequate economic momentum.
Commentator Wang He pointed out that individual data such as retail and industrial output are relatively credible due to lower verification difficulty, aligning with the conservative nature of official statistics. However, he warned that overarching data like GDP growth rates are more significantly influenced by political factors and hence have lower credibility. The April data downturn was impacted both directly by the China-US trade war and the ongoing long-term downward trend in China’s economy.
The situation in China’s real estate sector is particularly severe. From January to April, national real estate development investment fell by 10.3% year-on-year, while new housing sales area dropped by 2.8%.
Furthermore, both funds in place for real estate enterprises, construction areas, newly started construction areas, and completed construction areas for real estate development companies nationwide all saw year-on-year declines, with newly started construction by area decreasing by 23.8%. These figures indicate that the Chinese real estate market not only faces cyclical adjustments but also exhibits signs of structural decline.
David analyzed, “The continuous decline in real estate investment and the abrupt drop in new construction are no longer just cyclical issues but clear signals of structural decline.” He stated that the worsening real estate credit chain coupled with local debt pressures are dragging down overall investment growth, posing long-term constraints on economic recovery.
Wang added that the real estate slump has shaken the foundation of the Chinese economy. As a pillar industry, the downturn in real estate has intensified economic pressures. Despite multiple stimulus policies introduced since September last year, the effects are gradually diminishing, making it challenging to reverse the structural predicament.
The China-US trade war is one of the direct factors leading to the decline in April data. Spokesperson for the National Bureau of Statistics, Fu Linghui, stated that the international environment has been complex and volatile this year, with the US imposing high tariffs on China, severely impacting bilateral economic and trade relations. Even though the significant reduction in tariffs agreed upon during the talks on May 10-11 provided short-term relief for the economy, Fu admitted that the international environment remains challenging.
Wang noted that the trade war significantly impacted import and export activities, as evidenced by the sharp decline in loan data in April. He revealed that there may be discrepancies between official public data and internal data, suggesting that the actual economic situation could be even more severe. While the 90-day truce in the China-US trade war may temporarily alleviate economic pressures, its effects are already manifesting through declining employment and consumer confidence. Several institutions estimate that the trade war may directly impact over tens of millions of jobs in China, escalating economic pressures.
David, on the other hand, believed that the temporary halt in the trade war might stimulate some foreign trade orders to return, leading to a slight economic recovery in May and June. However, he cautioned, “Domestic demand remains weak, and consumer confidence is lacking; the real estate credit chain continues to deteriorate, with immense local debt pressure. The mismatch in youth and white-collar employment structures has resulted in long-term demand distortions.” These structural issues are difficult to address in the short term.
Regarding whether China’s economy possesses the “resilience” as officially claimed, experts remain cautious. David mentioned, “Some resilience remains, but it is challenging to conceal the overall slowdown.” He pointed out that while high-tech manufacturing industries like new energy vehicles and solar power still show growth, their impact on GDP is limited. Weak domestic demand, real estate drag, and high youth unemployment rates constitute three major “systemic risks,” which cannot be resolved solely by exports or short-term stimuli.
He metaphorically described, “The Chinese economy is like a leaking truck still running, with the driver insisting, ‘No problem.'”
Wang, however, argued that the so-called “economic resilience” is more of an official propaganda wording, with the actual economic operation being “very bad.” The escalating downward pressure from the trade war, along with diminishing marginal effects of official stimulus policies, reflect that the economy is struggling to endure further external shocks.
Looking ahead, experts hold a cautious outlook on the economic trends in the second and third quarters. David predicted that the temporary halt in the trade war might bring a short-term “false recovery” phenomenon in the second quarter, with data potentially showing slight improvement. However, without robust policy stimuli, the economy may face another downturn in the third quarter.
Wang analyzed that the economic indicators in May and June might temporarily improve due to restocking and hoarding demands, but the overall performance in the second quarter is expected to be weaker than in the first. The third quarter’s trajectory will depend on the outcome of the China-US trade negotiations. If the negotiations falter or show no substantial progress, the downward pressure on the economy will intensify further. Additionally, the fluctuation in commodity prices is closely related to the economic downturn, with depressed prices of crude oil and iron ore further confirming weak demand.
The economic data for April in China unveiled the dual challenges facing the Chinese economy internally and externally. Insufficient domestic demand, a sluggish real estate sector, and external uncertainties collectively impede growth momentum. While the easing of the trade war provides short-term relief, structural issues and systemic risks remain severe. Experts unanimously believe that while the Chinese economy may experience a slight uptick in the short term, the medium-term prospects for recovery lean towards pessimism, urging close monitoring of policy trends and changes in the external environment.