By John Meyer, consultant in business – Eurasia Business News, January 19, 2025. Article no. 1996
China’s latest official data show solid but slowing growth: GDP expanded about 5% in 2025, meeting Beijing’s target and supported largely by strong exports, while forecasts for 2026 point to growth easing to the mid‑4% range. Headlines about “robust” growth usually refer to this combination of hitting the 5% goal and maintaining industrial and export momentum despite significant structural headwinds.
Latest growth numbers
China’s economy grew around 5% in 2025, as expected, roughly matching 2024 and in line with the official target of “around 5%.”
Fourth‑quarter 2025 GDP grew about 4.5% year‑on‑year, the weakest pace in nearly three years and a step down from roughly 4.8% in the previous quarter.
What is driving growth
Export strength and a record trade surplus, especially to non‑U.S. markets, have been key supports, offsetting weak domestic investment and the property slump.
Industrial production has been relatively resilient, with year‑end 2025 data showing manufacturing growth around the mid‑single‑digits, helped by infrastructure spending and policy support.
Underlying weaknesses
Domestic demand remains soft: retail sales and household consumption are under pressure from falling home prices, high youth unemployment and a fragile property sector.
Deflationary forces persist, with very low consumer inflation and prolonged producer‑price deflation, signaling weak pricing power and excess capacity in some industries.
Studies of China’s 2026 strategy highlight industrial overcapacity and reliance on manufacturing and exports as key structural issues, noting that excess capacity in some heavy and high‑tech industries contributes to margin pressure and deflationary dynamics.
Outlook for 2026
Major institutions such as the IMF, Deutsche Bank, and private forecasters generally expect China’s growth to slow to about 4.5–4.8% in 2026, i.e., still relatively strong by global standards but weaker than 2025.
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Beijing is signaling continued fiscal and monetary easing to “manage” the slowdown, but most analyses stress that structural issues in property and demographics will cap how robust growth can be in coming years.
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© Copyright 2025 – Eurasia Business News. Article no. 1996
Eurasia Business News 