China's economy lags in July under pressure from tariffs and a weak property market - WTOP News
wtop.com -- Friday, August 15, 2025, 12:47:14 AM Eastern Daylight Time
Categories: U.S.–China Relations, Trade Policy & Tariffs, Economic Policy & Jobs
BANGKOK (AP) -- China's economy showed signs of slowing in July as factory output and retail sales slowed and housing prices dropped further, according to data released Friday.
Uncertainty over tariffs on exports to the United States is still looming over the world's second-largest economy after President Donald Trump extended a pause in sharp hikes in import duties for 90 days, beginning Monday, following a 90-day pause that began in May.
As officials worked toward a broader trade agreement, China reported earlier that its exports surged 7.2% in July year-on-year, while its imports grew at the fastest pace in a year, as businesses rushed to take advantage of the truce in Trump's trade war with Beijing.
But that also reflected a lower base for comparison, and manufacturers have slowed investments, hiring and production as they watch to see what comes. Chinese manufacturers also have ramped up shipments to Southeast Asia, Africa and other regions to help offset lost business in the U.S.
Still, annual growth in industrial output fell to 5.7% in July from 6.8% in June, the National Bureau of Statistics said.
Investments in factory equipment and other fixed assets rose a meager 1.6% in January-July, compared with 2.8% growth in the first half of the year.
Property investments plunged 12% in the first seven months of the year, with residential housing investment dropping nearly 11%.
Prices for newly built housing in major cities fell 1.1%, as a prolonged downturn in the property industry lingered.
The meltdown in the housing market hit just as the COVID -19 pandemic began, sapping one of the economy's main drivers of growth and causing dozens of developers to default on their debts.
The crisis rippled throughout the economy, destroying jobs for millions of people.
The government has sought to ensure that most housing that was paid for gets built, but sales remain weak despite a series of moves meant to entice families into back into the market.
Since most Chinese families have their wealth tied up in property, the anemic housing market has been a major factor crimping consumer spending. In July, retail sales rose 3.7%, the slowest rate in seven months and down from a 4.8% increase in June.
The unemployment rate rose to 5.2% from 5% as university graduates began looking for work.
While consumer prices rose 0.4% in July from the month before, prices at the wholesale level slipped 3.6% from a year earlier in another indicator of relatively weak demand.
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Sign Our PetitionThe recent report on China's economic performance in July presents a complex landscape shaped by a confluence of factors, including external trade tensions with the United States and an internal housing market crisis. The slowing factory output and retail sales are symptomatic of deeper structural issues within the Chinese economy, which, despite its rapid ascent over the past few decades, is now grappling with the consequences of the COVID-19 pandemic and a protracted trade war. This situation calls attention to the historical context of economic policies that prioritize growth over social welfare, revealing the fragility of an economic model heavily reliant on exports and real estate.
The trade tensions initiated by the Trump administration have had lasting repercussions on not just the Chinese economy but also global markets. The imposition of tariffs was framed as a protective measure for American workers, yet the fallout underscores the interconnectedness of the global economy. As China’s exports surged by 7.2% in July, it is crucial to recognize that this figure is misleading without considering the backdrop of a weaker comparative base from the previous year. Furthermore, the limited growth in industrial output to 5.7% from 6.8% suggests that the gains are precarious and may not be sustainable. This dynamic illustrates how the economic strategies of the past, particularly those favoring aggressive export-led growth, have made countries vulnerable to external shocks and policy shifts.
At the heart of China's current economic malaise is the ongoing crisis in the property market, which has been exacerbated by the pandemic. The housing market, once a pillar of growth, is now in decline, with investment plunging by 12% in the first half of the year. This downturn not only threatens the wealth of millions of Chinese families—who have largely invested their savings in property—but also creates a ripple effect that stifles consumer spending. When housing prices drop, so does consumer confidence, leading to reduced retail sales growth, which fell to 3.7%, the slowest rate in seven months. The systemic nature of this crisis highlights the consequences of an economic model that prioritizes property speculation over sustainable growth and social equity.
Historically, the rise of China's economy has been closely tied to state-directed investments in infrastructure and housing. However, the current situation illustrates the limitations of this model, revealing how the prioritization of rapid economic expansion can lead to significant social costs. The government’s attempts to stabilize the housing market through various incentives indicate an awareness of this problem, yet the solutions proposed often lack a focus on the underlying social issues. The rising unemployment rate, particularly among recent university graduates who face an increasingly competitive job market, underscores the challenges of transitioning to a more sustainable and equitable economic model. The struggle for job security and stable employment is not just an economic issue; it is fundamentally tied to broader social justice concerns.
The unfolding economic scenario in China serves as a poignant reminder of the need for an economic paradigm that emphasizes social welfare, environmental sustainability, and equitable growth. As nations grapple with the fallout from the pandemic and the repercussions of global trade policies, there is an opportunity to reassess the economic models that have been dominant in recent decades. Advocating for policies that prioritize long-term societal well-being over short-term economic gains is essential, especially in a world where the impacts of economic decisions can have far-reaching consequences. The current challenges faced by China can be seen not merely as isolated issues but as part of a larger global narrative about the future of work, economic justice, and the imperative of building resilient economies that serve the needs of all citizens.
The current state of China’s economy, as analyzed in the recent article from WTOP News, reveals critical insights into the complexities of global trade dynamics and interdependence. The report illustrates a concerning trend of slowing economic indicators, including factory output, retail sales, and real estate investment. These challenges are exacerbated by ongoing uncertainties related to tariffs and international trade tensions, particularly with the United States. Understanding these economic intricacies is essential, especially as they reflect broader geopolitical trends that can impact not only China but also the global economy, including the United States.
Historically, the U.S.-China trade relationship has been fraught with challenges, particularly since the onset of the trade war initiated under the Trump administration. While tariffs were ostensibly imposed to protect American industries, the consequences have reverberated through both economies, with manufacturers and consumers alike feeling the pinch. The notion that tariffs could lead to a competitive advantage has been shown to be misleading, as they often result in increased costs for consumers and reduced market access for businesses. As we witness China's economic slowdown, one must consider how intertwined our economies have become and the shared responsibility we have in fostering a fair and sustainable trade environment.
For the American public, recognizing the implications of these economic developments is crucial. As the Chinese economy grapples with stagnation, there remains an opportunity for Americans to advocate for policies that promote mutual growth and cooperation rather than conflict. Understanding that our economic prosperity is intrinsically linked to the health of China's economy should inspire a collective call for trade agreements that prioritize equitable practices over punitive tariffs. Engaging with representatives and participating in public discourse can encourage the political will necessary to reshape trade negotiations in a way that fosters collaboration rather than hostility.
Moreover, this moment presents an educational opportunity for Americans to deepen their understanding of how economic policies affect everyday life. The repercussions of a weakened Chinese economy are not confined to Asia; they can lead to job losses and price fluctuations in the U.S. market as well. By advocating for educational initiatives that promote economic literacy, we can empower citizens to make informed decisions about their political and economic environments. Understanding the intricate balance of global supply chains, investment strategies, and consumer behavior equips individuals to engage effectively with the pressing issues of our time.
Ultimately, the challenges facing China’s economy, particularly in the wake of the COVID-19 pandemic and ongoing trade tensions, should serve as a call to action for Americans. Instead of viewing these economic issues through a lens of rivalry, we must embrace a perspective that seeks to foster collaboration and mutual benefit. By advocating for constructive dialogue and policies that address the root causes of economic instability—rather than merely treating the symptoms—we can contribute to a more stable and prosperous world. This requires not only activism but also a commitment to understanding the complexities of international economics and the interconnectedness of our global community.
In light of the recent economic struggles reported in China, there are several actionable steps that individuals can take to address the broader implications of economic policies and support more equitable trade practices. Here’s a detailed list of ideas and actions:
### Personal Actions
1. **Educate Yourself and Others**: - Stay informed about global economic issues and their implications on local communities. - Share knowledge through social media platforms and community forums to raise awareness about the impact of tariffs and trade policies.
2. **Support Fair Trade Initiatives**: - Purchase goods from companies that prioritize fair trade practices and ethical sourcing. Look for certifications such as Fair Trade Certified. - Advocate for local businesses that support fair wages and sustainable practices.
3. **Engage in Community Activism**: - Participate in local community events focused on economic justice and fair trade. - Organize discussions or workshops to educate community members about the effects of global economic policies on local economies.
4. **Demand Policy Changes**: - Write to representatives urging them to consider the impacts of tariffs not only on international relations but also on local economies and job markets.
### Exact Actions
1. **Petition for Fair Trade Policies**: - Start or sign petitions advocating for fair trade practices and against tariffs that hinder economic growth for all parties involved. Websites like Change.org or MoveOn.org are good platforms to start petitions. - Example Petition: "Support Fair Trade Practices in International Trade Agreements."
2. **Contact Elected Officials**: - Write letters or emails to your local representatives, urging them to support policies that ensure fair trade and economic equity. - **Who to Write To**: - **Senator Elizabeth Warren** (Massachusetts) - Email: senator_warren@warren.senate.gov - Mailing Address: 2400 JFK Federal Building, 15 Sudbury Street, Boston, MA 02203 - **Representative Pramila Jayapal** (Washington) - Email: jayapal.house.gov/contact - Mailing Address: 1116 Longworth House Office Building, Washington, DC 20515
3. **Support Organizations Working for Economic Justice**: - Contribute to or volunteer with organizations that advocate for fair trade and economic justice, such as Oxfam or the Fair Trade Federation. - Example Action: Join local chapters or participate in campaigns organized by these groups.
4. **Utilize Social Media to Advocate Change**: - Use platforms like Twitter, Facebook, and Instagram to promote awareness about how tariffs affect global economies and local communities. - Share articles, statistics, and personal stories to engage others in the conversation.
5. **Participate in Public Forums**: - Attend town hall meetings or public forums where trade policies are discussed. Use these platforms to voice concerns and suggest equitable alternatives.
### What to Say
When contacting representatives or engaging in public forums, consider the following points:
- **Express Concerns**: "I am concerned about the impact of tariffs on our local economy and the lives of working families. These policies disproportionately affect those already struggling to make ends meet." - **Advocate for Fair Trade**: "I urge you to support policies that promote fair trade practices, ensuring that all workers are treated equitably and that our economy can thrive without the negative effects of tariffs."
- **Highlight Local Impact**: "The recent economic data shows how interconnected our economies are. We must prioritize measures that promote stability and growth for everyone involved, including our local businesses."
By actively participating in discussions, advocating for fair practices, and engaging with local and national representatives, individuals can contribute to a more equitable and just economic landscape.