China’s economy picks up in June on rebounding U.S. exports: analysts

China’s economy is showing signs of recovery, thanks in part to a pickup in shipments to the US

According to the China Beige Book, “Manufacturing saw the most significant recovery. Retail sales rebounded nicely.” independent survey Chinese businesses on Monday. The survey, which covered 1,321 businesses between June 1 and 22, pointed to an increase in luxury goods sales but a weakening of tourism-related spending.

“The second quarter ends on a more positive note than it began, but this performance will need to be repeated in July and August to be legitimate cause for celebration,” the report said.

The world’s second-largest economy lost strength in April and May after a strong first quarter. Official figures showed China’s retail sales in May fell for the first time since the pandemic, while data from 618 shopping festivals that ran from mid-May to mid-June showed a sharp slowdown in sales growth.

Production investmentChina’s financial data provider Wind Information fell on an annual basis in May for the first time since December 2020, according to China’s financial data provider Wind Information, which fell due to declines in metals, chemicals and automobile production.

But in June, the Beige Book reported that factory activity was “accelerating” and “orders to the United States were again up sharply on a yearly basis.” Chinese exports to the United States have rebounded in recent months, rising 11.3% and 35.4% in April and May, respectively, after double-digit declines for much of last year as President Donald Trump increased tariffs on Chinese goods.

Freight rates for shipping between Asia and the US have risen to their highest level in almost two years. S&P Global In a statement last week, he attributed the increase to importers front-loading shipments ahead of higher fuel surcharges and price increases from Asian suppliers. It was stated that stocking may decrease by the end of July.

The Beige Book revealed that the growth in China’s export orders to Asia and other developing countries slowed down in June compared to May, but the growth of export orders to Europe remained stable.

Trump’s meeting with Chinese President Xi Jinping signaled that while tariffs will likely remain lower for now, the United States has not yet implemented additional tariffs that could arise from Washington’s Section 301 investigations targeting countries identified for overcapacity and forced labor practices. Trump’s 10 percent tariff on goods from most major trading partners under Section 122 is set to expire on July 24.

Businesses are rushing to ship goods to the U.S. before tariffs potentially rise again, said Tianchen Xu, senior economist at the Economist Intelligence Unit.

Reflecting a recovery in trade, China’s exports to the US in May reached almost 90% of levels seen in 2024, official data show. In contrast, May 2025 figures showed Chinese exports to the US falling to 70% of 2024 levels.

“China’s weak momentum likely reversed in June,” Xu said, adding that “the recovery is still driven first and foremost by the external sector.”

He added that strong demand for artificial intelligence technology and components, as well as falling oil prices following the easing of tensions around the Strait of Hormuz, will help ease the pressure on the Chinese economy.

China is scheduled to release second-quarter GDP data on July 15, along with June retail sales and industry data. June trade data as of July 14.

The first official data on June economic performance will be published on Tuesday, and the Office for National Statistics plans to publish its official manufacturing purchasing managers’ index. The measure of business activity is expected to climb into expansion territory with a 50.1 percent increase in June, according to a Reuters poll.

Goldman Sachs on Sunday raised its third-quarter GDP growth forecast to 5% from 4.5% in the previous quarter, on expectations of lower oil prices and faster fiscal spending in the next few months after a sluggish second quarter in which it forecast 3.5% growth.