China’s economy grows five per cent in 2025
China’s economy grew at an annual rate of 5 percent in 2025, supported by strong exports despite US President Donald Trump’s tariffs.
But on Monday the government said growth slowed to 4.5 percent in the final quarter of the year.
This was the slowest quarterly growth since late 2022 during the COVID-19 pandemic. The world’s second largest economy grew at an annual rate of 4.8 percent in the previous quarter.
China’s leaders are trying to encourage faster growth after a collapse in the real estate market and disruptions from the pandemic hit the economy.
As expected, last year’s annual growth was in line with the government’s official target of growth of “about five percent”.
Strong exports helped offset weak consumer spending and business investment, contributing to a record US$1.2 trillion ($A1.8 trillion) trade surplus.
“The question is how long this growth engine can remain the main driver,” Lynn Song, chief Greater China economist at Dutch bank ING, wrote in a recent note.
Chinese exports to the United States suffered after President Donald Trump returned to office early last year and began raising tariffs.
However, this decline was offset by shipments to the rest of the world. Increased imports of Chinese goods are leading some other governments to take action to protect local industries and, in some cases, to increase import duties.
“If more economies start increasing tariffs on China, as Mexico has done and the EU has threatened to do, there will eventually be a tighter squeeze,” Song said.
Chinese leaders have consistently emphasized boosting domestic demand as a policy focus, but their impact has so far been limited. For example, a trade-in program for drivers to replace their old cars with more energy-efficient models has been winding down in recent months.
“Stabilization, not recovery, of the domestic real estate market is key to stimulating public confidence and thus household consumption and private investment growth,” said Chi Lo, senior market strategist for Asia Pacific at BNP Paribas Asset Management.
China also provided exchange subsidies for household appliances such as refrigerators, washing machines and TVs. The key consumer incentive policies (including such subsidies) from 2025 will continue in 2026, but they may be scaled back, Weiheng Chen, global investment strategist at JP Morgan Private Bank, said in a recent note.
Investments in artificial intelligence and other advanced technologies remain a key priority for China’s ruling Communist Party as it moves to boost self-reliance and rival the United States.
Many ordinary Chinese and small businesses are struggling with difficult times and uncertainty about work and income.
Some economists and analysts believe China’s real economic growth in 2025 is slower than official data suggest. Rhodium Group, a think tank, said last month it expected China’s economy to grow only 2.5 percent to 3 percent last year.
According to government data, the Chinese economy will grow at an annual rate of 5 percent in 2024 and 5.2 percent in 2023. Ambitious official growth targets have also trended downward over the past few years; From six percent to 6.5 percent in 2019 and “around five percent” in 2025.
Annual growth is expected to be slower in 2026. Deutsche Bank estimates that the Chinese economy will grow by approximately 4.5 percent in 2026.
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