China’s economy grew 5% in 2025, reaching the official target set by Beijing for the period.
The result slightly exceeded the expectations of analysts, who projected an expansion of 4.9%, and repeated the , consolidating the growth rate of the second largest economy in the world.
The advance was mainly sustained by exports and the manufacturing industry, in a year marked by the resilience of the external sector.
Exports and manufacturing were the main drivers, while real estate and parts of domestic demand remained weak, so the ‘announced success’ hides an uneven pace,” said Charu Chanana, chief investment strategist at Saxo.
Even in the face of trade tensions, Chinese exporters expanded their presence in markets outside the US, which contributed to a record trade surplus of almost US$1.2 trillion in 2025.
Despite the positive annual performance, the most recent data reveals a loss of momentum at the end of the year. In the fourth quarter, GDP (Gross Domestic Product) grew 4.5% in the annual comparison, slowing down compared to the 4.8% recorded in the previous quarter.
The result was close to the market projection, which estimated an increase of 4.4%, and marked the weakest quarterly growth in three years.
“The slowdown in the fourth quarter is revealing…suggesting that China will enter 2026 with a declining growth rate rather than a new rebound.”
In the quarterly comparison, GDP increased 1.2% between October and December, above the expectation of 1.0%, but still indicating a moderate pace of expansion. Analysts estimate that the slowdown at the end of the year suggests that China should start 2026 with less economic momentum, with no clear signs of recovery in the short term.
The weakness of domestic demand remains one of the main challenges. Consumption and investments lost strength, pressured by a prolonged crisis in the real estate sector and an environment of low confidence. In 2025, investment in fixed assets fell 3.8%, the first annual drop since the beginning of the historical series, in 1996.
Real estate investment fell 17.2% in the year.
December indicators reinforce this uneven picture. Industrial production grew 5.2% year-on-year, accelerating compared to November, but retail sales advanced just 0.9%, below market expectations. The weak consumption performance highlights the difficulties in stimulating domestic demand.
According to the head of the National Bureau of Statistics, Kang Yi, the economic growth of 2025 was “hard-earned”, amid challenges such as high supply and insufficient demand. Still, the weakening housing market and deflationary pressures continue to weigh on the economy.
The external scenario also brings uncertainty for 2026. The increase in global protectionism and the unpredictable trade policies of the United States, including threats of new tariffs, increase the risks for the Chinese economy, which currently depends heavily on external demand.
To support growth, China’s central bank recently initiated targeted interest rate cuts and signaled the possibility of further reductions in bank reserve requirements. In December, Chinese leaders reinforced their commitment to a “proactive” fiscal policy and indicated that they should again seek growth of around 5% this year.
Beijing also promised to significantly increase the share of household consumption in the economy over the next five years. Currently, household spending represents less than 40% of Chinese GDP, well below the global average, which, according to analysts, requires advances in income, employment and the social safety net to reduce high precautionary savings.
The yuan held steady after hitting a 32-month high before the release, while the benchmark Shanghai Composite index recovered from early losses to close higher.
(With information from Reuters)
