China’s economy expanded by 5 percent in 2025, one of the slowest rates of growth in decades, according to Beijing, as policymakers grapple with weak consumer spending and a lingering debt crisis in the property sector. The government had set a growth target of “around 5 percent,” matching the 2024 outcome.
The economy grew 4.5 percent in the final quarter of the year, reflecting a slowdown toward the end of 2025. While officials hailed the GDP figures as a success, analysts caution that the growth was uneven and masked broader challenges, including cautious consumer sentiment and high unemployment.
Retail sales, a key measure of consumption, increased just 0.9 percent year-on-year in December, the slowest pace since the end of 2022, following a 1.3 percent rise in November. Efforts by the government, such as fiscal stimulus and household item subsidies, have so far struggled to reignite spending.
China’s property sector, once a pillar of economic strength, continues to suffer. Fixed-asset investment fell 3.8 percent year-on-year, while real estate investment dropped 17.2 percent in 2025. Although house prices have inched higher in some major cities, the overall market remains sluggish, reflecting ongoing debt and liquidity challenges.
The year also saw heightened trade tensions with the United States after Donald Trump returned to the White House, although a tentative truce was reached in late October, pausing some of the tariffs imposed during the previous trade war. Despite exports to the U.S. dropping 20 percent, China’s broader export market remained resilient.
China’s trade surplus reached a record $1.2 trillion in 2025. Exports to ASEAN countries rose 13.4 percent, shipments to Africa increased 25.8 percent, and exports to the European Union grew 8.4 percent, although imports from the bloc fell.
While the economy’s headline growth met government targets, the data underscores structural challenges that policymakers must navigate, including low domestic consumption, high unemployment, and ongoing weaknesses in the property market.
