China Reports 5% Growth in 2025, Meeting Target as Exports Mask Weak Consumption and Property Slump

China said its economy grew 5% in 2025, hitting the government’s target of “around 5%” and capping a politically important five-year plan on schedule. But the headline figure rests heavily on surging exports and industrial output, while weak consumer spending, a deep property slump and a record trade surplus raise questions about how durable that growth will be.

The National Bureau of Statistics announced the data at a State Council Information Office briefing in Beijing on Jan. 19. It reported that gross domestic product reached 140.19 trillion yuan (about $19.7 trillion) last year, with growth slowing each quarter to 4.5% year-on-year in the final three months, the lowest rate since late 2022.

“For a super-large economy like China, achieving such stable development is by no means easy amid intertwined risks and challenges,” Kang Yi, head of the statistics bureau, told reporters. He described “stability” as the defining feature of the 2025 performance and said China had “successfully fulfilled the main targets” of its 14th Five-Year Plan, which ran from 2021 to 2025.

Economists outside the government are more cautious. Several research groups estimate China’s actual growth was significantly weaker than the official 5%, and they note that last year’s expansion relied more on selling goods abroad than convincing Chinese households to spend at home.

Export engine drives growth

Customs figures show China’s goods trade surplus climbed to almost $1.2 trillion in 2025, the largest ever recorded by any country. Exports rose 5.5% to $3.77 trillion while imports were essentially flat at $2.58 trillion.

That surplus widened even as shipments to the United States fell 20% under renewed tariffs and other trade measures imposed by the Trump administration. Chinese companies instead boosted sales to other markets, with exports to Africa up about 26%, to Southeast Asia up 13%, to the European Union up 8% and to Latin America up 7%.

Factories producing electronics, machinery and autos were among the strongest performers. Industry data show auto exports rose about 21% to more than 7 million vehicles, consolidating China’s position as the world’s largest car exporter.

International officials have warned that this export-led pattern is not sustainable for a country of China’s size. International Monetary Fund Managing Director Kristalina Georgieva said recently that China is “too big to rely on exports” as its main growth driver and urged Beijing to do more to support domestic consumption, warning that otherwise global trade tensions could intensify.

Business groups in the European Union and United States have also voiced concern about what they describe as “floods” of low-priced Chinese goods, including electric vehicles and solar panels, undercutting producers in their own markets. Authorities in both regions have launched investigations and imposed or proposed new trade measures in several sectors, citing industrial overcapacity and state subsidies in China.

Consumers and property lag behind

While factories kept busy, Chinese consumers were more cautious.

Official data show total retail sales of consumer goods rose 3.7% in 2025, to just over 50 trillion yuan. Growth slowed steadily during the year, and in December retail sales were up only 0.9% from a year earlier, the weakest increase since 2022.

Nationwide per capita disposable income rose 5% in real terms to 43,377 yuan. Urban incomes grew more slowly than rural incomes, and median income growth lagged the average, suggesting that gains were uneven.

Despite those figures, the statistics bureau said consumption played a bigger role in growth, estimating that final consumption expenditure contributed 52% of the 2025 GDP increase. State media described household spending as the “ballast stone” of the economy, even as many indicators pointed to soft demand.

The property sector, long a pillar of China’s growth, had another difficult year. Real estate investment fell about 17% in 2025, according to official data cited by analysts, and overall fixed-asset investment — spanning infrastructure, manufacturing and property — declined roughly 3.8%. It was the first full-year contraction in the modern statistical series.

Home prices in most of the 70 large and medium-sized cities tracked by the government fell month-on-month in December, with weakness most pronounced in smaller cities. Large developers remain under pressure following a wave of defaults that began several years ago, and many buyers are still waiting for pre-sold apartments to be completed.

Authorities have rolled out a series of measures to stabilize the sector, including easing mortgage down payment rules, relaxing purchase restrictions in many cities and directing state-linked entities to help acquire unsold housing stock. Those steps have so far slowed, but not reversed, the downturn.

Deflation pressures and demographic strains

Prices added another note of concern. Consumer inflation remained far below the government’s target, with average annual increases estimated at well under 1%, while producer prices at the factory gate stayed in deflation. Many economists see that combination as a sign of weak domestic demand and industrial overcapacity.

Labor market data painted a mixed picture. The surveyed urban unemployment rate averaged 5.2% for the year, within the official target of about 5.5%, and was 5.1% in December. However, the government has not regularly published a separate youth unemployment rate since suspending the series in 2023 following a sharp increase. Private surveys and anecdotal reports point to continued difficulty for young graduates finding stable work, especially in services and white-collar jobs.

China’s longer-term demographic challenges also sharpened. The country’s population fell for the fourth consecutive year in 2025, to around 1.405 billion, as deaths outnumbered births. The number of babies born dropped to about 7.92 million, and the birth rate fell to a record low 5.63 per 1,000 people.

Officials and demographers have warned that the population is aging rapidly, with the number of people aged 60 and over projected to reach roughly 400 million by 2035. A smaller working-age population and a larger retired cohort are expected to weigh on growth and put pressure on pension and health care systems.

Doubts over data and the growth model

The statistics bureau insists its numbers are reliable and says they are compiled in line with international standards. But some outside analysts argue that the official 5% figure overstates the economy’s true momentum.

Researchers at several independent consultancies estimate actual growth in 2025 was closer to 2.5% to 3.5%, citing subdued retail sales, the scale of the property contraction, low inflation and corporate reporting. One firm said in a recent note that China’s GDP data appear to “track policy targets more closely than underlying activity,” particularly at politically sensitive moments such as the end of a five-year plan.

Repeatedly hitting growth goals can help authorities project confidence at home and abroad, especially as foreign investors reassess their exposure to China and local governments grapple with heavy debts. But some economists warn that smoothing the numbers risks obscuring the depth of structural problems and complicating policy responses.

Beijing has so far resisted launching a large-scale stimulus program akin to the one that followed the 2008 global financial crisis. Instead, policymakers have favored targeted support, including special government bond issuance, subsidized lending for smaller firms and “trade-in” schemes encouraging households to replace older cars and appliances.

Those measures helped keep the official growth rate near 5% in 2025. The question now is whether China can shift more of that growth from export-led manufacturing to domestic consumption without sacrificing the stability its leaders prize — and without further straining relations with trading partners already alarmed by the country’s record surplus.