Despite the customs dispute with the United States, China’s economy surprisingly increased significantly in the second quarter and further expanded its global market shares – also at the expense of German companies.
China’s economy achieved growth of 5.2 percent in the second quarter of 2025 compared to the previous year and thus exceeded the expectations of the experts. Economists had only expected an increase of 5.1 percent. The plus in the second quarter of the year also remained just below the growth of 5.4 percent from the first quarter. In the entire first half of the year, growth was 5.3 percent.
This shows the economy in the Middle Kingdom – despite the continuing customs dispute with the USA and a weak domestic demand as a result of the continuing real estate crisis. The government in China continues to pursue the goal of around five percent annual growth – a brand that now seems at least computer.
Second half of the year with question marks
However, many economists expect Chinese economy to cool off in the second half of the year. After all, early exports had accelerated growth. However, this also means that the second half of the year becomes more difficult, for example, the Beijing economist Alex Hongcai Xu is convinced. The dynamics were anticipated, so to speak.
Despite the solid total of the solid, many structural problems are also unsolved. “The real estate crisis remains a heavy burden for the households of the municipalities in the medium term,” warned economist Dan Wang from the Eurasia Group. At the same time, deflation risks and a slowly improper buying mood dampen the internal market.
Industry robust, consumption weak
In fact, consumption was significantly weaker recently: in June, retail sales only increased by 4.8 percent and clearly failed to expect expectations. In contrast, China’s industry was resistant: in June, industrial production rose by 6.8 percent in the year – significantly more than expected.
The day before, the customs authority in Beijing had already reported the enormously increased exports: In June, exports compared to the same month in the previous year increased by $ 5.8 percent. Economists had only expected 5.0 percent as an increase.
More World market shares won
In parallel to the positive quarterly growth, China’s industry has recently become increasingly important at the world market. According to a current analysis by the Prognos Institute, the country now has a global market share of 16 percent. For comparison: Germany comes to just eight percent.
China has already overtaken Germany in many industrial segments such as mechanical engineering, electronics or optics. German companies are only at the forefront in a few areas such as the automotive industry, medical technology and aviation – however, the lead is also shrinking.
Opportunities in India for German industry?
According to Prognos, German companies still have a very strong position, especially in Europe and North America. But in other regions of the world, the Chinese industry has expanded its market shares rapidly in recent years, such as in Southeast Asia, South America and Australia.
A region in which German industry could catch up again, according to forecast, is South Asia including India: the Chinese-Indian relationship is traditionally not too good, and the EU hopes for a free trade agreement with India.
