China's National Bureau of Statistics reported that GDP grew 4.2% year-on-year in the fourth quarter of 2025, the slowest pace since the pandemic recovery period. Full-year 2025 growth came in at 4.6%, below the government's 5% target. The slowdown was driven by continued weakness in the property sector, subdued consumer spending, and an increasingly difficult export environment as trade tensions with the United States and European Union intensified.
The Property Sector
China's property market, which at its peak accounted for approximately 29% of GDP when including related industries such as construction and furnishings, remains in a deep correction. New home prices fell for the 18th consecutive month in December 2025. Property investment declined 10.1% year-on-year, while housing starts fell 23%. Major developers including Evergrande and Country Garden remain in various stages of debt restructuring.
The government has taken several steps to stabilise the market, including reducing mortgage rates, lowering down payment requirements, and easing purchase restrictions in major cities. However, consumer confidence in the property sector remains weak, with many potential buyers adopting a wait-and-see approach.
Manufacturing and Exports
China's manufacturing sector showed a mixed picture. The official Purchasing Managers' Index hovered near the 50 mark (the dividing line between expansion and contraction) throughout late 2025. Factory output grew 5.8% year-on-year, supported by strong demand for electric vehicles, solar panels, and batteries, which China dominates globally.
However, the export outlook has become more uncertain. The EU imposed tariffs of up to 45% on Chinese electric vehicles in late 2024, while the United States maintained tariffs on approximately $370 billion of Chinese goods. China's total exports grew 2.3% in 2025, down from 7.1% in 2024, reflecting weaker global demand and trade barriers.
Stimulus Measures
The People's Bank of China cut the one-year loan prime rate to 3.0% in December 2025 and reduced the reserve requirement ratio for banks, freeing up approximately 1 trillion yuan in liquidity. The government also issued 2 trillion yuan in special sovereign bonds to fund infrastructure spending and local government debt relief.
For the latest Chinese economic data, see the National Bureau of Statistics of China. For broader Asian economic analysis, visit the Asian Development Bank.