On April 2, 2025, U.S. President Donald Trump, now in his second term, announced a sweeping 10% baseline tariff on all imports into the United States, with even steeper rates targeting specific countries. More than 100 trading partners are affected, including the EU, China, the UK, and Vietnam. The announcement has sparked strong backlash from multiple governments and triggered consecutive drops across global stock markets. In the case of China, the cumulative tariff burden on its exports has now climbed to a staggering 54%. For many Chinese private exporters—especially those heavily reliant on the U.S. market, including many led by CEIBS alumni—the consequences could be severe.

In 2024, China's economy is expected to achieve a GDP growth rate of around 5%, but it still faces significant headwinds in 2025. What is behind the stress on the Chinese economy? Will recently announced policies be able to spur growth? Can China reverse two consecutive years of deflation in 2025? What kind of policies are needed to continue hitting the 5% growth target? Most importantly, will 2025 be a turning point for China's economy? In this article, CEIBS Professor and Santander Chair in Economics Zhu Tian explores these questions and more.

Following a forecast of 5% GDP growth in 2023, will China’s economy see an upward trend in 2024, or will it continue its downward spiral over the next few years, as some organisations such as the International Monetary Fund are predicting?