1 Official PRC media strives to cover up impact of US ‘reciprocal’ tariffs
PRC official media low key on US tariffs
April 2 to April 16
1. Party mouthpiece People’s Daily carried very few reports on the U.S.-China tariff war on its front page. Those few reports noted that the U.S. had launched “reciprocal tariffs” against China and portrayed China as the “victim” of U.S. “bullying.” However, the reports omitted any mention of specific tariff rates or the impact of the tariffs on the Chinese economy.
The headlines of relevant reports are:
- April 5: “The Chinese Government’s Position on Opposing the U.S. Abuse of Tariffs”
- April 7: “Unwaveringly Advancing High-level Opening-up to the Outside World”
- April 10: “China Releases White Paper, ‘China’s Position on Certain Issues in China-U.S. Economic and Trade Relations”
2. Reports on the U.S.-China tariff war on CCTV’s prime-time program Xinwen Lianbo largely focused on the PRC’s stance on the tariffs and countermeasures, as well as opposition from other countries to America’s tariff policies. The Xinwen Lianbo reports did not specify the actual tariff rates the U.S. imposed on China or the impact of the tariffs on China, but instead emphasized the impact of the tariffs on the United States.
The headlines of relevant reports include:
- April 2: “Multiple Parties Oppose US Tariff Increases”
- April 3: “Ministry of Commerce Responds to U.S. ‘Reciprocal Tariffs’: Will Firmly Take Countermeasures to Safeguard Its Rights”; “Ministry of Foreign Affairs Responds to U.S. ‘Reciprocal Tariffs’: Strongly Oppose the Tariffs, Will Resolutely Defend Legitimate Interests”
- April 4: “China Has Filed a Complaint with the WTO Dispute Settlement Mechanism Regarding U.S. ‘Reciprocal Tariffs’”; “Multiple Parties Announce Measures to Respond to U.S. Tariff Policies”
- April 5: “The Chinese Government’s Position on Opposing the US Abuse of Tariffs”
- April 6: “Multiple Parties Criticize US Tariff Increases for Undermining the Global Trade System”
- April 7: “US Tariff Increases Draw Widespread Opposition from the International Community”
- April 8: “European Commission Proposes 25 Percent Tariffs on Certain U.S. Products”
- April 9: “State Council Information Office Releases White Paper on ‘China’s Position on Certain Issues in China-U.S. Economic and Trade Relations’”; “China Files Additional Complaint at WTO Regarding US 50 Percent Tariff Increase on Chinese Exports”
- April 10: “China Expresses Strong Concern at WTO over US ‘Reciprocal Tariffs,’ Receives Broad Support”; “Multiple Parties Criticize US Tariff Policy as Harmful to All”; “Ninth CELAC Summit Held, Leaders of Many Countries Criticize US Unilateral Actions”
April 11: “China Files Additional WTO Complaint Over Further US Tariff Escalation on Chinese Goods”; “Multiple Parties Warn US Tariff Policies Increase Uncertainty and Disrupts Global Trade” - April 12: “Multiple Parties Point Out US Tariff Policies Threaten Global Economy”
- April 13: “International Voices Warn of Negative Global Impact of US Tariff Policies”
- April 14: “US Economists Say Tariffs Are Isolating the US”
- April 15: “UNCTAD Report Says US Trade Policies Could Devastate Most Vulnerable Economies”
PRC official media talks up Chinese economy
Amid rising trade tensions with the U.S., PRC official media have been promoting the narrative that China’s economy is improving and the country remains committed to opening up to the world.
Some relevant headlines include:
April 12
- People’s Daily: “Over 100 Million Home Appliances Have Been Replaced Under the Trade-In Program So Far”
- People’s Daily: “Double-Digit Growth in Automobile Production and Sales in Q1 This Year”
April 13
- People’s Daily: “Investing in China Is Investing in the Future — Observations on Unwaveringly Advancing High-Level Opening-Up (Part 1)”
- Xinwen Lianbo: “March Financial Data Shows Positive Growth Trend, Solid Support for the Real Economy”
April 14
- People’s Daily: “Accelerating the Cultivation of New Drivers in Foreign Trade — Observations on Unwaveringly Advancing High-Level Opening-Up (Part 2)”
- People’s Daily: “China Will Remain a Fertile Ground for Foreign Investment for the Long Term”
March economic and financial data
April 13
The People’s Bank of China released financial and social financing data for March 2025:
Renminbi credit data
- Broad money supply (M2) increased 7 percent year-on-year to 326.06 trillion yuan. The growth rate was unchanged from January 2025 and slightly below the market expectation of 7.1 percent.
- Narrow money supply (M1) increased 1.6 percent year-on-year to 113.49 trillion yuan. This marks a significant increase from the growth rate of less than 0.5 percent in the previous two months.
- New RMB loans increased by 3.63 trillion yuan, compared to 3.09 trillion yuan in the same period last year.
- RMB deposits rose by 4.25 trillion yuan, down from 4.81 trillion yuan in the same period last year.
Social financing data
- Total social financing increased by 5.9 trillion yuan, up from 4.9 trillion yuan a year ago.
- New RMB loans in the social financing total rose by 3.83 trillion yuan, up from 3.29 trillion yuan in March 2024. This was above the 3 trillion yuan forecast by economists surveyed by The Wall Street Journal.
- Net corporate bond financing declined by 90.5 billion yuan, compared to an increase of 461 billion yuan in the same period in 2024.
- Net government bond financing surged to 1.48 trillion yuan, up from 460 billion yuan a year ago — the highest level in several years.
April 14
The PRC General Administration of Customs released the following data for March 2025:
Trade
- China’s total trade volume increased 5 percent year-on-year to reach $525.18 billion (the growth rate was up 4.9 percent when compared with official PRC data for 2024).
- Exports totaled $313.91 billion, a 12.4 percent increase year-on-year (the growth rate was up 12.2 percent when compared with official PRC data for 2024). This was significantly higher than the 2.3 percent growth in the first two months of this year, and also well above economists’ forecast of 4.4 percent, according to The Wall Street Journal.
- Imports declined by 4.3 percent year-on-year to $211.27 billion (the growth rate was down 4.5 percent when compared with official PRC data for 2024). The decline was less severe than the 8.4 percent drop in the January–February period, but worse than economists’ forecast of a 1.8 percent increase.
- The trade surplus came in at $102.64 billion, a 75.3 percent increase from a year ago.
Major Imported Goods with Significant Declines in Value
Key imported goods that saw a decrease of over $1 billion in import value during the January-March period include:
- Iron ore and concentrates: Import value decreased by $10.7 billion (down 7.8 percent); import volume decreased by 27.5 percent.
- Grain: Import value decreased by $6.8 billion (down 41.2 percent); import volume decreased by 40.8 percent.
- Crude oil: Import value decreased by $6.63 billion (down 8.1 percent); import volume decreased by 1.5 percent.
- Automobiles (including chassis): Import value decreased by $3.97 billion (down 44.5 percent); import volume decreased by 39.4 percent.
- Coal and lignite: Import value decreased by $2.71 billion (down 22.5 percent); import volume decreased by 0.9 percent.
- Natural gas: Import value decreased by $2.64 billion (down 16 percent); import volume decreased by 10 percent.
- Soybeans: Import value decreased by $2.5 billion (down 24 percent); import volume decreased by 7.9 percent.
- Automobile parts: Import value decreased by $1.54 billion (down 24.9 percent).
- Refined oil products: Import value decreased by $1.47 billion (down 20.2 percent); import volume decreased by 22.4 percent.
April 15
The National Bureau of Statistics announced that China’s GDP grew 5.4 percent in the first quarter of 2025.
NBS deputy head Sheng Laiyun said that the economy “got off to a good and steady start and maintained the recovery momentum, with innovation playing an increasingly leading role.” But he warned that “the external environment is becoming more complex and severe, the drive for the growth of effective domestic demand is insufficient, and the foundation for sustained economic recovery and growth is yet to be consolidated.”
Our take
1. PRC official media is deliberately obscuring key information about the U.S. tariffs while promoting narratives of China’s economic resilience and continued commitment to “opening up” in what appears to be a strategy of minimizing the impact of the Sino-U.S. tariff war as much as possible, at least in the information space. By “reporting only the good while omitting the bad” (報喜不報憂), Beijing is looking to avoid a panic in the short term and slow down the rate of social destabilization. At the time this newsletter is published, CCP propaganda is focused on covering Xi Jinping’s trip to Southeast Asia and nudging Trump “reciprocal tariffs” into the background.
Official mainland media’s reporting of the U.S. tariffs creates the impression that China is not affected by them while America is the side that is negatively impacted. The reporting also attempts to shift the blame for the tariffs entirely on the U.S. and portray China as the “victim.” Meanwhile, official media is talking up the Chinese economy, claiming that China’s economic growth in the first quarter of 2025 is “stable with positive momentum” (穩中向好). But despite the significant increase in China’s exports in March (up 12.4 percent), CCP propaganda is not aggressively promoting the figure, likely to prevent people from drawing a stark contrast later with potentially negative export growth figures in April.
The CCP’s evasive and heavily one-sided reporting of the Sino-U.S. tariff war hints that Beijing is expecting the impact of Trump’s tariffs to be very severe. Therefore, Beijing is doing what it can to control public discourse and prevent the Chinese people from realizing that China is headed for a steep economic downturn and a sharp rise in unemployment.
2. Despite tentative signs of improvement in some economic indicators for March 2025, China’s economic data paints a grim picture, even before factoring in the potential catastrophic impact of reciprocal tariffs.
i) The official social financing data highlights an alarming dependence on government bonds. New government bond financing increased by 1.02 trillion yuan in March, accounting for over a quarter of the total increase in social financing for the month. Meanwhile, corporate bond issuance has ground to a near halt, plummeting from a year-on-year increase of 4.61 trillion yuan to a contraction of 90.5 billion yuan. This sharp decline signals acute difficulties in corporate direct financing, with government debt issuance propping up the financing ecosystem.
ii) RMB credit metrics show a notable rebound in M1 growth and an uptick in RMB loans, reflecting a rise in demand deposits and a sudden warming of short-term consumer credit demand. This may be tied to loosened consumer loan approvals by the CCP authorities in March. However, medium- and long-term investment and consumption confidence among households and businesses remains subdued. Compounding this, while credit demand has risen, slower M2 growth and decelerating deposit expansion point to liquidity strains within the banking system.
iii) China’s export trade surplus surged 75.3 percent in March 2025, but this sharp increase does not reflect enhanced profitability in its export sector. Instead, it foreshadows a potential sharp contraction in future exports. The figure is likely distorted because future demand has been essentially pulled forward by U.S. importers front-loading purchases in anticipation of steep tariff hikes by the Trump administration.
Meanwhile, the significant reduction in imported goods in March further signals a looming decline in export activity. China’s imports are predominantly raw materials used to produce finished goods for export. A sustained drop in imports suggests weakening production capacity, which could translate into reduced export volumes in the near term.
iv) With no signs of de-escalation in the U.S.-China tariff conflict, the prolonged trade war is poised to deliver a severe blow to China’s export-driven industries, particularly in coastal provinces heavily reliant on U.S. markets. Canceled U.S. trade orders could lead to unrecoverable upfront investments by export firms, potentially driving up non-performing loans in the banking sector. Domestically, unsold export goods dumped at low prices could exacerbate deflationary pressures.
Coastal provinces with high dependence on U.S. exports face significant fiscal risks. According to data from analytics firm Zhigu Trend, the top 10 provinces by U.S. export reliance — measured as the share of U.S. export value to regional GDP in 2024 — are Zhejiang (71.4‰), Guangdong (68.3‰), Shanghai (52.4‰), Jiangsu (43.9‰), Fujian (40.9‰), Shandong (27.1‰), Tianjin (22.9‰), Chongqing (22.5‰), Sichuan (19.2‰), and Henan (18.6‰). Should the tariff war persist through the end of the year, these affluent coastal regions could face negative economic growth, with sharp declines in tax revenues due to stalled exports.
What’s next
China’s economy is at a critical juncture. While short-term credit and financing measures provide temporary relief, structural issues — ranging from corporate financing woes to banking liquidity constraints and escalating trade tensions — threaten to undermine stability. Coastal provinces, the engines of China’s export-led growth, are particularly vulnerable. Without a timely resolution to the tariff conflict or robust policy interventions, China’s economic trajectory could deteriorate further in 2025.
