(Zero Hedge)—Ahead of tonight’s grand unveiling of what Beijing wants the world to think about its economy, the market was active with Gold soaring at the China open for the third day in a row…
…and the Yuan fix notably lower again…
Ugly yuan fix: PBOC set CNY reference rate at 7.2133, much weaker than yesterday’s 7.2096 and the weakest since Sept 2023, approaching weakest on record pic.twitter.com/XKjcn2Mwf7
— zerohedge (@zerohedge) April 16, 2025
Ahead of the GDP print, we saw both new and existing home prices released by the statistics bureau for March showing price drops have slowed on a month-on-month basis…
- China March New Home Prices Fall 0.08% M/M
- China March Existing Home Prices Fall 0.23% M/M
Of course, tonight’s data tsunami is pre-Liberation Day Tariffs so no excuses (aside from the 10% tariffs that Trump put on China at the start of February).
However, GDP was expected to show the economy slowing ahead of the tariffs given March’s unevenness.
In reality, it didn’t… China GDP growth beat expectations, rising 5.4% (+5.2% exp)…
The growth was in line with China’s growth rate in the fourth quarter and exceeded Beijing’s full-year growth target for 2025.
In the first quarter China’s trade surplus was over $270 billion, just below the record in the final three months of last year and almost 50% larger than a year ago. The record surplus last year of almost $1 trillion drove a third of China’s growth and the boost last quarter is likely to have been large.
Beijing has set a target of 5 per cent growth for this year and has backed this up with pledges to increase stimulus measures, setting a record budget deficit target for the central government.
And just like the GDP figure, the rest of the data beat (or met) expectations too
- China Retail Sales BEAT +4.6% YTD vs +4.3% exp vs +4.0% prior
- China Industrial Production BEAT +6.5% YTD vs +5.9% exp vs 5.9% prior
- China Fixed Asset Investment BEAT +4.2% vs +4.1% exp vs +4.1% prior
- China Property Investment MEET -9.9% vs -9.9% exp vs -98% prior
- China Unemployment BEAT 5.2% vs 5.3% exp vs 5.4%$ prior
Presumably these much better than expected data are due to tariff front-running.
“The most pleasant surprise is retail sales which shows that consumption subsidies are working,” said Michelle Lam, Greater China economist at Societe Generale SA.
“Industrial production was a beat but understandable after the strong export data. But that’s all in the past now.”
China is the world’s largest importer of oil, natural gas and coal, and Beijing has been putting pressure on energy firms in recent years to boost output and reduce the nation’s dependency on imports.
Diggers and driller responded in March, with output rising 9.6% for coal, 5% for natural gas and 3.5% for crude oil. Output increases in coal and oil are particularly higher than expected.
Of course, it’s what happens next that really matters as US tariffs on China are now high enough to wipe out Chinese shipments to the US, according to Bloomberg estimates.
“Even with temporary exemptions, US duties will still be high enough to crush most of China’s exports to the US,” said Chang Shu and David Qu at Bloomberg Economics.
UBS this week cut its China GDP forecast with the most pessimistic outlook forecast among major banks, predicting the economy will expand just 3.4% this year as US tariffs choke exports.
Goldman Sachs and Citigroup are among global banks that cut their outlook for China in recent days, with most economists doubting Beijing can achieve the official target of about 5% growth this year.
“With the trade war with the US escalating sharply, the economy will face stronger headwinds. We expect policymakers to expedite stimulus,” said Shu and Qu.
The NBS struck a note of caution even as it released the upbeat data, emphasizing the need for greater support for the economy.
“We should be aware that the external environment is becoming more complex and severe, the drive for growth of effective domestic demand is insufficient, and the foundation for sustained economic recovery and growth is yet to be consolidated,” the bureau said in a statement.
“We must implement more proactive and effective macro policies.”
Beijing is placing high hopes on domestic demand – particularly consumption – to drive economic growth this year, as external pressures mount under Donald Trump’s second presidency.
In a bid to spur spending, leading bodies of China’s state apparatus and the ruling Communist Party issued a 30-point plan aimed at stimulating consumer demand.
Bypass Big Tech Censors
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
