BEIJING — China’s economy slowed less than expected in the second quarter in a show of resilience against US tariffs, though analysts warn that weak demand at home and rising global trade risks will ramp up pressure on Beijing to roll out more stimulus.

The world’s No. 2 economy has so far avoided a sharp slowdown in part due to policy support and as factories took advantage of a US-China trade truce to front-load shipments, but investors are bracing for a weaker second half as exports lose momentum, prices continue to fall, and consumer confidence remains low.

Policymakers face a daunting task in achieving the annual growth target of around 5% — a goal many analysts view as ambitious given entrenched deflation and weak demand at home.

Data on Tuesday showed China’s gross domestic product (GDP) grew 5.2% in the April-June quarter from a year earlier, slowing from 5.4% in the first quarter, but just ahead of analysts’ expectations in a Reuters poll for a rise of 5.1%.

“China achieved growth above the official target of 5% in Q2 partly because of front loading of exports,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

“The above target growth in Q1 and Q2 gives the government room to tolerate some slowdown in the second half of the year.”

On a quarterly basis, GDP grew 1.1% in April-June, the National Bureau of Statistics data showed, compared with a forecast 0.9% increase and a 1.2% gain in the previous quarter.

Investors are closely watching for signs of fresh stimulus at the upcoming Politburo meeting due in late July, which is likely to shape economic policy for the remainder of the year.

Beijing has ramped up infrastructure spending and consumer subsidies, alongside monetary easing. In May, the central bank cut interest rates and injected liquidity as part of broader efforts to cushion the economy from US President Donald J. Trump’s sweeping tariffs.

Some analysts believe the government could ramp up deficit spending if growth slows sharply.

Market reaction to the data was largely muted, with China’s blue-chip CSI300 Index reversing course to trade down 0.1%, while Hong Kong’s benchmark Hang Seng cut gains to trade up 0.7%.

HOUSEHOLDS PRESSURED
Separate June activity data also released on Tuesday underlined the pressure on consumers. While industrial output rose 6.8% year-on-year last month — the fastest pace since March, retail sales growth slowed down to 4.8%, from 6.4% in May and hitting the lowest since January-February.

Indeed, the headline GDP numbers held little sway for most households including 30-year-old doctor Mallory Jiang, in the southern tech hub Shenzhen, who says she and her husband both had pay cuts this year.

“Both our incomes as doctors have decreased, and we still don’t dare buy an apartment. We are cutting back on expenses: commuting by public transport, eating at the hospital cafeteria or cooking at home. My life pressure is still actually quite high.”

China observers and analysts say stimulus alone may not be enough to tackle entrenched deflationary pressures, with producer prices in June falling at their fastest pace in nearly two years.

Zichun Huang, China economist at Capital Economics, said the GDP data “probably still overstate the strength of growth.”

“And with exports set to slow and the tailwind from fiscal support on course to fade, growth is likely to slow further during the second half of this year.”

Data on Monday showed China’s exports regained some momentum in June as factories rushed out shipments to capitalize on the fragile tariff truce between Beijing and Washington ahead of a looming August deadline.

HEADWINDS
The latest Reuters poll projected GDP growth to slow to 4.5% in the third quarter and 4.0% in the fourth, underscoring mounting economic headwinds as Mr. Trump’s global trade war leaves Beijing with the tough task of getting households to spend more at a time of uncertainty.

China’s 2025 GDP growth is forecast to cool to 4.6% — falling short of the official goal — from last year’s 5.0% and ease even further to 4.2% in 2026, according to the poll.

China’s property downturn remained a drag on overall growth despite multiple rounds of support measures, with investment in the sector falling sharply in the first six months, while new home prices in June tumbled at the fastest monthly pace in eight months.

China’s top leaders pledged to push forward urban village renovation and quicken a new property development model, state media reported on Tuesday.

Fixed-asset investment also grew at a slower-than-expected 2.8% pace in the first six months year-on-year, from 3.7% in January-May.

The softer investment outturn reflected the broader economic uncertainty, with China’s crude steel output in June falling 9.2% from the year before, as more steelmakers carried out equipment maintenance amid seasonally faltering demand.

“Q3 growth is at risk without stronger fiscal stimulus,” said Dan Wang, China director at Eurasia Group in Singapore. “Both consumers and businesses have turned more cautious, while exporters are increasingly looking overseas for growth.” — Reuters

TOKYO — Japan on Tuesday set up an administrative body aimed at easing citizens’ concerns over the rapid rise in the number of foreigners in recent years, as policies concerning non-Japanese residents emerge as a key issue in Sunday’s national election.

The body would serve as a cross-agency “control tower” to respond to issues such as crime and overtourism involving foreigners, the government said.

Japan has long sought to maintain a homogeneous population through strict immigration laws, but has gradually eased them to supplement its shrinking and aging labor force. The number of foreign nationals hit a record of about 3.8 million last year, although that is still just 3% of the total population.

The formation of the administration body comes after a group of lawmakers in Prime Minister Shigeru Ishiba’s Liberal Democratic Party (LDP) in June proposed measures to realize a “society of orderly and harmonious coexistence with foreign nationals.”

Those measures included adopting stricter requirements for foreigners switching to a Japanese driver’s license and for buying real estate properties.

“Crimes and disorderly conduct by some foreigners, as well as the inappropriate use of various administrative systems, have created a situation in which the public feels uneasy and cheated,” Mr. Ishiba said at the kick-off ceremony.

Concerns over the influx of foreigners, both temporary and permanent, have resonated with voters, with opinion polls showing a rapid surge in the popularity of tiny populist party Sanseito, which advocates a “Japanese First” agenda.

Public opinion polls show the LDP and its junior coalition partner Komeito are in jeopardy of losing their majority in the upper house election on July 20. — Reuters

WASHINGTON — China is increasing its diplomatic reach as President Donald J. Trump’s administration pares back America’s international presence, Democrats from the US Senate Foreign Relations Committee said in a report released on Monday.

The report, the result of months of staff travel and research, was released as the Trump administration makes deep cuts to the State department, including beginning on Friday to fire more than 1,350 US-based employees, part of a total reduction of nearly 3,000 people for the US-based workforce.

The administration has also cut billions of dollars in foreign aid, effectively shutting down the US Agency for International Development (USAID), which funded the majority of US humanitarian and development assistance worldwide. That led to the firing of thousands of its employees and contractors and the slashing of more than 80% of its programs.

Critics said the cuts would undermine Washington’s ability to defend and promote US interests abroad. Research published in The Lancet medical journal said the cuts to USAID and its dismantling could result in more than 14 million additional deaths by 2030.

“Within days of the Trump administration taking office and starting to roll back our commitments around the world, China was already labeling the United States an unreliable partner,” Senator Jeanne Shaheen, the top committee Democrat, told reporters on a conference call about the report.

“At a time when we’re retreating, they are expanding their footprint,” she said.

The Trump administration says its changes help align foreign policy with Mr. Trump’s “America First” agenda, and are part of a push to shrink the federal bureaucracy and cut what Mr. Trump officials say has been wasteful spending.

Mr. Trump has said the US pays disproportionately for foreign aid and he wants other countries to shoulder more of the burden.

The Democrats’ 91-page report listed ways, from broadcasting to health programs and development efforts, that committee researchers said China is expanding its influence.

It lists dozens of cases in which the committee researchers found that China had stepped in as the US eliminated or cut back international programs, from funding vaccines and providing food to infrastructure development.

For example, in Africa, as the US terminated food assistance programs, China in March donated $2 million in rice to Uganda. In May, after the US terminated a $37-million HIV/AIDS grant in Zambia, China said it would help the African nation fight HIV/AIDS, including by donating 500,000 rapid HIV testing kits and planning more meetings to discuss its continued partnership on the issue.

In Southeast Asia, Chinese President Xi Jinping embarked on a tour to meet with leaders in Vietnam, Cambodia and Malaysia, the report said. The trip yielded an agreement in Vietnam for railroad connections, 37 cooperation agreements in Cambodia in sectors including energy, education and infrastructure and technical and manufacturing exchanges in Malaysia.

And in Latin America, China in May hosted the “China-Latin American and the Caribbean Forum” and announced it would provide a $9-billion credit line and additional infrastructure investments for the region. — Reuters