China’s economy expanded by 5 percent in 2025, according to official data released Monday, hitting the government's annual target but marking one of its slowest growth rates in decades.

The world's second-largest economy continues to navigate a challenging landscape defined by a deepening property debt crisis and persistently weak domestic consumption.

While the headline figure suggests stability, the fourth quarter saw a cooling to 4.5 percent growth, underscoring a significant loss of momentum as the year concluded. The domestic economy was weighed down by a sluggish retail sector and a sharp contraction in real estate.

Retail sales, a barometer for consumer sentiment, rose by only 0.9 percent in December—the weakest performance since the end of the zero-Covid era in late 2022. Simultaneously, real estate investment plunged by 17.2 percent for the year, dragging overall fixed-asset investment down by 3.8 percent.

Despite government efforts to stimulate spending through household trade-in subsidies and interest rate cuts, consumer confidence remains fragile due to high unemployment and falling home prices in most secondary cities.

External trade provided a rare pillar of strength, despite the return of Donald Trump to the White House and the renewal of aggressive trade frictions.

Although exports to the United States plummeted by 20 percent in 2025, China achieved a record global trade surplus of USD 1.2 trillion by diversifying its markets.

Shipments to Africa surged by nearly 26 percent, while exports to Southeast Asia and the European Union rose by 13.4 percent and 8.4 percent, respectively.

This export-led resilience persists even as a fragile one-year truce, brokered between President Xi Jinping and President Trump in late October, provides a temporary pause in the escalation of tit-for-tat tariffs.

Source: AFP