Beijing. China’s economy grew at an annual rate of 5.2 percent in the April-June quarter despite escalating trade tensions with the United States, the government reported Tuesday.

The growth rate was slightly below the 5.4 percent pace recorded in the first quarter of the year. On a quarterly basis, the world’s second-largest economy expanded by 1.1 percent.

For the first half of 2025, China’s economy grew at a 5.3 percent annual rate, according to official data, though some analysts believe actual growth may be significantly lower.

Zichun Huang of Capital Economics said fixed asset investment, including factory equipment, rose only 2.8 percent in the first half, implying growth of 2.9 percent in May and just 0.5 percent in June. Capital Economics’ activity proxy estimates China’s GDP growth at under 4 percent year-on-year in April and May, with a full-year 2025 forecast of 3.5 percent.

“The economic outlook for the rest of the year remains challenging,” Huang wrote in a report, adding that political pressure to meet growth targets would likely keep official figures elevated.

A key factor supporting growth was strong exports. On Monday, China reported that exports accelerated in June, rising 5.8 percent from a year earlier, up from a 4.8 percent increase in May. A temporary reprieve from high US tariffs prompted a surge in orders, while Chinese firms expanded exports to other markets and moved some manufacturing offshore to offset higher tariffs imposed by the Trump administration.

“With more proactive and effective macro policies taking effect, the national economy maintained steady growth with good momentum, showcasing strong resilience and vitality,” the National Bureau of Statistics said in its report.

However, domestic demand remained weak, with consumer prices declining 0.1 percent in the first half of 2025, reflecting long-term challenges tied to China’s aging and declining population, issues that deepened during and after the COVID-19 pandemic.

Chinese leaders have set a 5 percent growth target for this year, in line with 2024’s pace. However, a potential resumption of US tariffs of up to 245 percent if Washington and Beijing fail to secure a new trade deal by an August 12 deadline could derail China’s export recovery, threatening one of the main drivers of growth and employment.