China's economy grew by 5.4% from January to March, helped by strong exports before the US increased taxes on Chinese goods.

Because of the trade war, experts think that the world's second largest economy will slow down a lot soon. This is because the US is putting high taxes, up to 145%, on goods from China. China has also put 125% taxes on American goods, but they say they still want to trade with other countries.

Chinese leader Xi Jinping is visiting several Asian countries this week. He wants to support free trade and show that China can provide "stability and certainty" when things are difficult.

While Xi visited Vietnam, Malaysia, and Cambodia, the U.S. announced that a senior official, Sean O'Neill, from the State Department would travel to Hanoi and Ho Chi Minh City in Vietnam, Siem Reap in Cambodia, and Tokyo this week.

China is also showing that it wants to trade with countries other than the United States. It is doing this at different trade fairs, where it shows its big market and its strength as a major manufacturing country.

Exports helped China's economy grow by 5% last year, and the official goal for this year is also around 5%.

A spokesperson said the new taxes will cause problems for China's economy in the short term, but they will not stop its growth in the long term. He also said that China now sells less to the US than it did five years ago.

China's economy is strong and can handle problems, and it has a lot of possibility for growth. We are sure we can deal with challenges from other countries and reach our development goals,

Compared to the previous three months, the economy grew by 1.2% in the first three months of the year. This is slower than the 1.6% growth in the last three months of 2024.

In March, China's exports increased by over 12% compared to the previous year, and by almost 6% in US dollars during the first three months. This happened because companies quickly exported goods before Trump's new taxes on imports began. This rush to export has helped China's manufacturing industry grow strongly in recent months.

A lot of this happened early on, driven by a quick increase in activity before the US raised taxes on imported goods. Also, businesses in the US rapidly increased their stock of goods because importers wanted to be ready for the changes, according to Stephen Innes of SPI Asset Management.

Production by factories and industries went up by 6.5% compared to the same time last year, mainly because the making of equipment increased by almost 11%.

The biggest growth was in modern technologies like making electric and hybrid cars, which went up a lot (45.4%) compared to the year before. Making 3D printers also grew a lot (almost 45%), and the number of industrial robots made increased significantly (26%).

Although the Chinese economy has grown quite quickly compared to other countries, it has had difficulty recovering since the COVID-19 pandemic. Problems in the housing market have caused more people to lose their jobs, making families careful about spending money.

Prices for things people buy went down a little (0.1%) in the first three months of the year. This could mean that people are not buying as much as businesses are making in many parts of the economy. Also, spending on property stayed low, dropping almost 10% compared to the year before. This happened even though the government tried to get banks to lend more money for buying houses.

The trade conflict is a big problem now, when China wants businesses to invest and create jobs, and wants people to spend more money.

Economists in both private companies and the government are still careful about predicting the future because Trump keeps changing his mind about the details of his trade war.

Because of recent events, it is very hard to know how the taxes the U.S. and China put on each other might change, according to a report from Tao Wang and other economists at UBS.

The International Monetary Fund and Asian Development Bank still expect the economy to grow by about 4.6% this year.

When Trump became president, he first increased taxes on Chinese imports by 10%. Then he made it 20%. Now, most things China sends to the US have a 145% tax.

UBS thinks that if the import taxes stay similar, China's exports to the US might drop by two-thirds soon. They also believe China's total exports worldwide could decrease by 10% in value. Because of this, UBS lowered its prediction for China's economic growth this year from 4% to 3.4%. They also expect growth to slow to 3% in 2026.

Over the last seven months, China has worked harder to encourage people to spend more money and businesses to invest.