China's economy grew by 5.4% in the first three months of the year, according to the government. This growth was helped by strong exports before the US President increased taxes on Chinese goods.

Experts predict that China's economy, the second largest in the world, will slow down a lot soon because of the trade war, especially as high taxes of up to 145% on goods from the US start. China has also put high taxes of 125% on goods from the US, but says it still wants its markets to be open for business and investment.

This week, China's leader, Xi Jinping, is visiting several other Asian countries to talk about the importance of free trade. He is presenting China as a country that can provide "stability and certainty" during times of uncertainty.

While Xi visited Vietnam, Malaysia, and Cambodia, the U.S. said a senior official, Sean O'Neill, would travel this week to cities in Vietnam and Cambodia, and also to Tokyo.

China is also showing that it wants to trade with countries other than the United States at different trade fairs. At these fairs, it is showing its big market and its strength as a major manufacturer.

Exports helped China's economy grow by 5% each year in 2024, and the official goal for this year is also around 5%.

Sheng Laiyun, from the National Bureau of Statistics, said that in the short term, these taxes will cause problems for China's economy, but they will not stop growth in the long term. He also said that China sends fewer goods to the United States now (less than 15% of all exports) compared to five years ago (more than 19%).

China's economy is strong and can deal with difficulties. We are sure we can handle problems from outside and reach our development goals, Sheng said.

From January to March, the economy grew by 1.2%. This was slower than the 1.6% growth in the last three months of 2024.

Chinese exports increased by over 12% compared to last year in March and almost 6% in US dollars in the first three months of the year. Businesses did this quickly to avoid Trump's taxes on goods coming into the country. This has supported strong factory work in the last few months.

Most of this happened early on because people acted quickly before US tariffs went up and because US importers bought a lot of goods to be ready, Stephen Innes from SPI Asset Management said.

In the last three months, industrial production went up by 6.5% compared to the same time last year. This was mainly because the production of equipment increased by almost 11%.

The biggest growth was in advanced technologies, like making electric and hybrid cars, which increased by 45.4% compared to the year before. Making 3D printers went up by almost 45%, and industrial robots grew by 26%.

Although the Chinese economy has grown quite quickly compared to other countries, it has found it difficult to become strong again since the COVID-19 pandemic. This is because 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 in the first three months of the year. This might mean companies are making more than people want to buy. Also, people didn't invest much in houses or buildings, and the amount spent went down by almost 10% compared to the year before. This happened even though the government tried to get banks to lend more money for buying homes.

The problem with import taxes is likely to have a big negative effect at a time when the government in China is trying to encourage companies to invest, hire more people, and get people to buy more things.

Economists in both private and public sectors are still careful about what they expect, because Trump keeps changing his mind about the details of his trade war.

Because of what has happened recently, it is very hard to say how the taxes between the U.S. and China might change, according to a report from Tao Wang and other UBS economists.

The International Monetary Fund and the Asian Development Bank still expect growth of around 4.6% this year.

When Trump became president, he first increased taxes on goods from China by 10%. Later, he raised it to 20%. Now, China pays 145% taxes on most of its products sent to the US.

UBS thinks that if the taxes stay similar, China's exports to the US could go down by two-thirds in the next few months. They also think China's total exports around the world could drop by 10% in value. UBS lowered its guess for how much the economy will grow this year from 4% to 3.4%. They believe growth will slow down to 3% in 2026.

China has tried harder to get people to spend more money and businesses to invest more over the last seven months. They have given much more financial help for people trading in old cars and appliances, and have also sent more money to the housing market and other industries that need it.