China’s Labor Market Strengthens Amidst Looming Tariff Threats: Key Insights Ahead of Xi-Trump Talks
China’s Labor Market Recovery Faces Tariff Threats Ahead of Xi–Trump Meeting
By Bob Mason | Published: October 23, 2025, 03:17 GMT
China’s labor market shows signs of recovery. US tariff threats hang close. Trade tension between China and the United States may cut the growth path, shake consumer confidence, and unsteady the market in coming weeks.
September Brings a Stronger Labor Market and Export Growth
China’s data for September speaks clearly. Unemployment drops from 5.3% in August to 5.2% in September. Youth unemployment falls to a three-month low of 17.7% for 16-24 year-olds (excluding college students). Export numbers also rise. Exports jump by 8.3% year-on-year in September. This jump compares with a 4.4% rise in August. Imports grow too, and these gains help create jobs and lift economic mood.
Mixed Signals in Consumer Spending
Workers return to jobs, but consumer buying does not grow as fast. Retail sales grow by 3.0% year-on-year in September. The pace is slower than the 3.4% in August and much slower than the 6.4% in May. Beijing uses policies to raise household incomes and reduce financial loads. These plans have not yet built strong retail sales.
The housing market adds more strain. Home prices fall in 63 of 70 major cities in September. In August, the drop was seen in 57 cities. We see low housing demand and many unknowns. This news weakens the mood and may push prices down more.
Deflation Risks and Economic Challenges Remain
Price checks show a decline. Consumer prices fall 0.3% year-on-year in September, a small change from 0.4% in August. Prices rise a tiny 0.1% month-to-month in September. The small shifts keep deflation risks in view. Experts split on whether China can shift away from these trends when jobs, homes, and outside demand give mixed signals.
US Tariff Threats Shadow Recovery
The trade gap grows wider with new US actions. The US may raise tariffs on Chinese goods to 155%. There is talk of stopping some exports that use US software for China. This news comes days ahead of a meeting set between President Xi Jinping and former President Donald Trump. They plan to meet at the APEC Summit from October 31 to November 1. Hope for a trade deal dimmed after recent hints from President Trump. This news raises the fear of a trade war.
Markets React to Trade News
On October 23, markets in Mainland China feel the strain. The CSI 300 index falls by 1.03%. The Shanghai Composite Index falls by 0.86%. Meanwhile, Hong Kong’s Hang Seng Index gains a small 0.16%. Investors see both risk and hope in these changes.
Policy Moves and Upcoming Data
The end of the Communist Party’s Fourth Plenum brings new plans to steady growth in the last quarter. Investors wait for the next numbers. New industrial profit figures and the National Bureau of Statistics private sector Purchasing Managers’ Index will appear next week. Market mood now depends a lot on trade news at the APEC Summit. If talks fail and tariffs rise, gains in Mainland China and Hong Kong stocks may shrink. These markets have improved by about 16% and 29% so far this year.
Conclusion
China’s labor market recovers with help from stronger exports and lower youth unemployment. US trade moves now risk the recovery as Beijing works to boost spending and growth. The upcoming Xi–Trump meeting at the APEC Summit stands as a major turning point. Investors and policy makers keep a close view, waiting for clear signals amid the current doubts.
About the Author:
Bob Mason is a seasoned financial journalist with over 28 years of industry experience. He covers currencies, commodities, alternative assets, and global equities, focusing on European and Asian markets.
Full money-growing playbook here:
youtube.com/@the_money_grower
