China’s economy is maintaining strong momentum as major industrial enterprises posted accelerating growth in April, official data showed, suggesting robust economic resilience despite trade concerns. Officials and economists said the positive trends underscore the effectiveness of stimulus policy measures in cushioning the impact of the United States’ tariff hikes and stabilizing market expectations. Moody’s Ratings affirmed China’s long-term credit rating of A1, both in domestic and foreign currencies, while maintaining a negative outlook. The A1 rating, four notches below the top of Moody’s 21-notch rating scale, indicates a low credit risk. Although the outlook remained negative, the unchanged rating reflects confidence in China’s medium- and long-term economic fundamentals. Moody’s Ratings said the affirmation of the A1 rating takes into account China’s large, dynamic economy and capacity for innovation. Looking ahead, economists believe that China’s economy will maintain stability in the third and fourth quarters, given ample policy space and tools to withstand mounting external uncertainties.
Meanwhile, strong fiscal stimulus measures are needed to boost domestic demand and shore up confidence among businesses, such as an additional fiscal package to support infrastructure and consumption. According to the National Bureau of Statistics (NBS) China’s industrial enterprises with an annual revenue of at least CNY20 million saw their total profits jump 3% year-on-year in April, up from 2.6% growth in March. In the first four months of the year, industrial profits rose 1.4% year-on-year, compared with a 0.8% rise in the first quarter. The rebound is mainly driven by robust earnings in the equipment manufacturing and high-tech manufacturing sectors, aided by the implementation of proactive macro policies.
Moody’s Ratings said that “improvements in a range of innovation indicators and the large-scale deployment of artificial intelligence suggest that innovation may drive higher productivity growth more effectively.” China's Ministry of Finance (MOF) said that China’s economy has made a strong start this year despite a sluggish global economy, mounting geopolitical tensions and a volatile international trade and economic order, demonstrating strong resilience and vitality. J.P. Morgan has raised its full-year GDP growth forecast for China to 4.8% up from 4.1%, assuming that current tariff levels between China and the U.S. remain unchanged through the end of the year. Morgan Stanley also revised its 2025 China GDP growth forecast upward by 30 basis points to 4.5% due to reduced tariffs. Robin Xing, Chief China Economist at Morgan Stanley, said his team expects Beijing will introduce a CNY0.5 trillion to CNY1 trillion fiscal package to support infrastructure, specifically urban renewal, the China daily reports.
