Chinese Production Slows Amid Export Declines and Supply Chain Strains

Chinese factories experience significant production slowdowns due to the Lunar New Year shutdown and increased tariffs as of January 2025.

The slowdown signals stress in the global supply chain, potentially affecting worldwide markets and cryptocurrency sectors.

China’s Output Growth Hits 5.9% Amid Tariff Challenges

China’s industrial output recorded a 5.9% year-on-year growth in early 2025, slowed by the new 20% US tariffs and lower global demand. The Chinese New Year shutdown compounded this effect, affecting factory operations.

Key figures include factory owners and Chinese policymakers, who are implementing strategies to counteract the economic slowdown, such as the RMB 300 billion stimulus package aimed at bolstering domestic consumption. Recent official data from the China National Bureau of Statistics highlights a deceleration in growth, stating:

“China’s industrial output expanded by 5.9 percent year-on-year in January-February 2025, marking a slight slowdown from December’s 6.2 percent. While growth remains steady, the data suggests mounting external pressures, including US trade tariffs and subdued global demand, are beginning to weigh on the country’s manufacturing sector.”

US Orders Plummet by 42% Amidst Production Slumps

The production slowdown is impacting export volumes, with US orders dropping by 42%. Such declines have stirred protests among unpaid workers, with the government reportedly suppressing dissenting voices. Sources have documented these developments in various reports.

Financially, the export fall impacts trade balance and employment. The estimated urban unemployment rate may tally up to 20%, suggesting a profound effect on China’s labor market stability.

Lunar New Year Closures Exacerbate Trade Conflicts

Historically, Lunar New Year closures disrupt production, yet 2025 sees escalated issues due to trade conflicts. Similar situations in past tariff wars reflect volatility in related crypto markets by affecting global trade finance tokens.

Based on historic trends, the slowdown may persist if tariffs remain, though stimulus measures could stabilize domestic demand. Cryptocurrency sectors may experience indirect risk factors as seen during previous trade wars.