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China says its economy grew by 5% last year, meeting Beijing’s official target as a record trade surplus boosted growth.
But Chinese government figures also showed economic growth slowed to 4.5% in the final three months of 2025, compared to a year earlier.
Beijing had set a goal of “around 5%” economic growth in 2025, despite struggles to boost domestic spending, a prolonged property crisis and the turmoil caused by US President Donald Trump’s tariff policies.
Experts say the figures point to a “two-speed economy”, with manufacturing and exports propping up growth, while within the country, people are still spending cautiously and the property market continues to weigh on the economy.
Even as China’s official figures show it hit its growth goal, some analysts question the accuracy of the data given weak investment and consumer spending.
“While the headline [gross domestic product] print came in at 5% for 2025, matching the government’s target, we think growth is weaker than official figures suggest,” said Zichun Huang, China Economist at Capital Economics.
Huang added that her company’s own calculations suggest China’s official growth figures “overstate the pace of economic expansion” by at least 1.5 percentage points.
Also on Monday, Chinese data showed the country registered the lowest number of births last year since records began in 1949.
The total number of births dropped to 7.9 million in 2025, figures from China’s National Bureau of Statistics showed.
Economists say the falling birth rate will compound domestic challenges by weakening demand for housing and consumer goods, adding pressure to an already struggling property market.
Officials said the country’s population declined for a fourth year in a row in 2025, falling 3.4 million to 1.4 billion.
The figures highlight China’s deepening demographic crisis even as the government tries to boost birth rates by offering couples incentives to have more children.
China reported the world’s largest-ever trade surplus last week – the value of goods and services sold overseas compared to its imports – of $1.19tn (£890bn), driven by a rise in exports to markets outside the US.
“China is effectively pushing growth through exports at a loss, and that is not sustainable. Cutting prices may keep volumes up, but it undermines profits and, ultimately, growth,” Alicia Garcia-Herrero, chief economist for Asia Pacific at French bank Natixis, told the BBC.
Speaking on Monday, Kang Yi, head of China’s National Bureau of Statistics, said the country’s economy “faces problems and challenges, including strong supply and weak demand”, but added that it will be able to “maintain stable, sound growth momentum this year.”
Analysts warn that growing reliance on exports leaves China more exposed to global trade tensions, especially as uncertainty grows over US tariff policy.
The US president recently threatened to impose new levies on countries that trade with Iran or oppose his plan to take control of Greenland.
China and other Asian nations buy oil from Iran.
China’s economic resilience could be a result of lower than expected US tariffs, after Beijing and Washington agreed a pause, but that is due to expire in November 2026.
Nowhere are China’s domestic challenges more visible than in its property sector.
Beijing has been grappling with a prolonged housing downturn, and rising local government debt, making businesses more hesitant to invest to expand, and consumers more cautious about spending.
New data on Monday showed that house prices continued to fall in December, as the government struggled to stabilise China’s property market.
Prices dropped 2.7% last month compared to a year earlier, the sharpest decline in five months. Property investment also fell 17.2% last year.
The prolonged property slump has had such a major impact because the real estate industry once accounted for about a quarter of China’s economy, hitting construction activity, household wealth and local government finances.
Millions of households have been left with unfinished homes or properties that have lost significant value, undermining confidence in what was once seen as the safest place to store savings.
Falling land sales have also squeezed local government revenues.
“China’s reported GDP of 5% is not surprising given the political incentives to ensure headline stability, but this clearly masks the horrible investment data,” said Louise Loo, Head of Asia Economics at Oxford Economics.
Retail sales rose just 0.9% in December, the slowest pace in three years, although factory output increased to 5.2% beating November’s 4.8% growth.
Once the 5% economic growth target was secured, policymakers appeared to hold back additional stimulus, effectively saving resources for this year, Natixis said in a note after the release of the data.
Economists from the bank added that the slowdown in retail sales and investment late in the year reflected policy timing rather than a sudden deterioration in the economy.
Chinese leaders have pledged “proactive” policies this year as they look to shore up confidence among consumers and businesses. But the data suggests the underlying economy remains fragile.
Beijing faces a delicate balancing act between reviving growth through stimulus while containing rising debt, and finding ways to avoid reliance on exports in an increasingly uncertain trade environment.
