China’s economy expanded 5.2% yoy in Q2 2025, slowing from 5.4% in the prior two quarters and marking the slowest pace since Q3 2024. Still, the latest reading narrowly beat market expectations of 5.1%, supported in part by Beijing’s policy measures amid a fragile trade truce. In June, industrial output growth unexpectedly quickened to a 3-month high, while the surveyed jobless rate held at a six-month low. Simultaneously, retail sales grew the least in four months, despite government subsidies on electronic items. On the trade front, exports accelerated as factories rushed out shipments, with imports rising for the first time this year. Growth momentum in H2 of the year is expected to weaken further amid persistent headwinds, including trade tensions ahead of the August 12 tariff deadline, deflationary pressures, and a prolonged property downturn. Separately, the statistics agency flagged continued external uncertainties and highlighted that domestic demand remains “insufficient.”