Beijing: China has recorded economic growth of 5 percent in 2025, meeting its official target despite external trade pressure and domestic structural challenges. China has defied expectations that US tariffs and a struggling property sector would significantly weaken economic performance.
China has reached its growth goal of 5 percent for 2025, matching the pace achieved in the previous year and meeting the government’s target of ‘around’ that level. Data released on January 19 has shown that China’s economy has remained resilient even as it faced challenges from global trade tensions, weak consumer demand, and a prolonged property market downturn.
China has recorded its largest-ever trade surplus of $1.2 trillion during 2025, reflecting the country’s ability to redirect exports to alternative markets and cushion the impact of US tariffs introduced during the Trump administration. Analysts had expected stronger trade restrictions to deliver a sharper economic slowdown, but exports and manufacturing have continued to support growth.
The Commonwealth Bank of Australia’s chief economist, Luke Yeaman, has said that geopolitical uncertainty remains a major wildcard but China’s economy should continue expanding through 2026.
China’s domestic challenges, however, have continued to weigh heavily on economic confidence. A four-year housing market decline has reduced household wealth and weakened consumer spending, with home prices falling by more than 20 percent since their peak in 2021. The property sector has also been facing mounting debt risks, creating uncertainty across financial markets and casting a shadow over long-term economic stability.
China has also struggled with deflationary pressure while much of the world has battled rising prices. Consumer prices have increased by only 0.8 percent in 2025, reflecting weak domestic demand. Yeaman has warned that property market collapses can suppress growth for years, citing Japan’s experience during the 1990s and early 2000s as a cautionary example even in the absence of a banking crisis.
China’s National Bureau of Statistics has acknowledged that challenges remain but has expressed confidence in continued stability. Kang Yi, head of the bureau, has said that while the economy faces problems, China will maintain sound and stable growth momentum.
However, recent data has shown a slowdown toward the end of 2025, with fourth-quarter growth easing to 4.5 percent year-on-year, the weakest performance since late 2022.
China’s growth figures have also raised questions among economists who have long warned about the reliability of official data. Capital Economics has estimated that growth may be overstated by as much as 1.5 percentage points. Citi analysts have described the economy as ‘K-shaped’, with strong exports and manufacturing contrasting against weak retail sales and consumer spending.
China’s leaders have pledged to increase household consumption as a share of economic output, which currently stands below 40 percent compared with a global average of around 60 percent. In 2025, the government provided 300 billion yuan, equivalent to $43 billion, in subsidies encouraging households to trade in old appliances for new ones.
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