China met its annual GDP growth target of 5% for 2025, but recent data shows weakening momentum in key sectors, prompting renewed calls for fiscal and monetary stimulus. The economy expanded by 5.0% year-on-year, slightly above expectations, yet March-quarter figures revealed a slowdown in manufacturing and consumer demand.
- China's 2025 GDP growth reached 5.0%, matching the official target.
- Q4 GDP growth slowed to 4.6%, down from 5.3% in Q3.
- Retail sales grew 4.9% in Q4, down from 5.7% in Q3.
- New home sales declined 11.3% year-on-year in December.
- Government launched a 1.5 trillion yuan infrastructure plan and reduced reserve requirement ratio by 25 bps.
- Export growth reached 3.8% in December, supported by demand from ASEAN and EU markets.
China's economy achieved a 5.0% year-on-year expansion in 2025, meeting the government's official growth target. However, quarterly performance indicated a marked deceleration, with the fourth quarter posting a 4.6% increase—down from 5.3% in the third quarter. This decline underscores persistent challenges in domestic demand, particularly in consumption and fixed asset investment. Industrial output rose 5.2% in the final quarter, below the 5.8% pace seen in the third quarter, while retail sales grew by 4.9%, down from 5.7% in the preceding period. The property sector remains a drag, with new home sales falling 11.3% year-on-year in December, and developers’ financing conditions still constrained despite targeted easing measures. Government stimulus efforts have intensified, including a 25-basis-point cut to the reserve requirement ratio in November and a targeted loan facility of 1.2 trillion yuan for small and medium enterprises. The State Council also announced a 1.5 trillion yuan infrastructure investment plan focused on green energy and digital infrastructure, aiming to support growth in the first half of 2026. Financial markets responded cautiously, with the CSI 300 index ending the week 0.4% lower, while the renminbi traded near 7.25 per U.S. dollar. Investors are now closely monitoring early 2026 data for signs of recovery, particularly in consumer sentiment and export performance, which rose 3.8% in December amid resilient demand from Southeast Asia and Europe.