Official data released today showed that the Chinese economy grew by 4.5% year-on-year in the fourth quarter of last year, slightly exceeding analysts' expectations and confirming its alignment with the government's ambitious annual growth targets. These figures reflect the resilience of the world's second-largest economy in the face of mounting domestic and external challenges.
Performance exceeds expectations amid structural challenges
Reuters polls had previously indicated that GDP growth was likely to reach only 4.4% in the fourth quarter, compared to 4.8% in the third. This relative slowdown reflects continued pressure from declining consumption and investment, making the fourth quarter the slowest performance in the past three years. Despite this, for the whole of 2025, China achieved 5.0% growth, exceeding analysts' expectations of 4.9% and meeting the official government target.
The economic context and the real estate sector crisis
These figures cannot be interpreted in isolation from the broader context of the Chinese economy, where the real estate crisis continues to cast a long shadow. This sector, which once accounted for a quarter of the country's economic activity, is a major source of concern given the difficulties faced by some large developers and the decline in home sales. This, coupled with weak domestic demand, has led to a drop in confidence among both consumers and investors, prompting the government to implement various stimulus measures to try to revive the market.
Foreign trade and diversification strategies
In terms of foreign trade, China's trade surplus reached a record high in 2025. This achievement is attributed to the proactive strategies adopted by Chinese exporters, who diversified their target markets toward developing countries and emerging markets to mitigate the impact of US tariffs and Western trade restrictions. This strategic shift helped maintain export flows as an engine of growth, at a time when domestic consumption remained weak.
The global importance of Chinese growth
China's achievement of its annual growth target is of paramount importance to the global economy, given Beijing's pivotal role in global supply chains and commodity consumption. Stable growth in China translates to relatively stable demand for energy and minerals, which benefits countries that export these resources. However, structural slowdowns and a continued reliance on exports rather than domestic consumption raise questions about the long-term sustainability of this model, particularly in light of ongoing geopolitical tensions.
