China economy hits 5% growth target in 2025 despite headwinds
China closed 2025 with economic growth of 5%, matching Beijing’s official target as GDP climbed beyond 140 trillion yuan for the first time. The milestone was reached despite weak domestic demand, deflationary pressures and a deep property slump, while strong foreign trade helped cushion the slowdown. The data highlight both resilience and mounting structural strains in the world’s second-largest economy.
China’s economy expanded by 5% in 2025, fulfilling the government’s annual growth objective as gross domestic product rose above 140 trillion yuan, according to figures released by the National Bureau of Statistics. The outcome places growth broadly in line with recent years and comes at a time when global trade tensions and internal imbalances continue to shape economic policy debates closely followed by countries such as Türkiye.
Production and consumption show mixed picture
Official data pointed to steady gains in output, with industrial production increasing by 5.9% and services activity growing by 5.4% over the year. Household spending remained more subdued, as retail sales rose 3.7%, reflecting persistent caution among consumers amid slowing income growth and lingering deflation risks across major Chinese cities.
Investment dragged down by property downturn
Fixed-asset investment declined 3.8% on an annual basis, weighed down primarily by the real estate sector. Property-related investment plunged 17.2%, extending a three-year correction that has become a central challenge for policymakers. Analysts note that the prolonged housing slump continues to limit broader investment momentum across infrastructure and manufacturing.
Trade surplus offsets domestic weakness
China’s external sector provided a key buffer, with the trade surplus reaching a record $1.19 trillion in 2025, the first time it has exceeded $1 trillion in a single year. Strong exports helped counterbalance internal pressures, even as uncertainty linked to US tariff policies and global demand remained high.
Late-year slowdown and income trends
Growth eased in the final quarter, slowing to 4.5% year-on-year, the weakest quarterly performance since early 2023. Industrial capacity utilisation slipped to 74.9%, while the surveyed unemployment rate edged up to 5.2%. At the same time, real disposable income per capita increased by 5%, with rural income growth outpacing gains in urban areas, underscoring ongoing structural shifts within the Chinese economy.
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