HONG KONG (AP) — China’s economy grew 5% annually in 2025, supported by strong exports despite…
HONG KONG (AP) — China’s economy grew 5% annually in 2025, buoyed by strong exports despite U.S. President Donald Trump’s tariffs.
However, growth slowed to 4.5% in the final quarter of the year, the government said on Monday. That was the slowest quarterly growth since late 2022, when China began easing strict restrictions from the COVID-19 pandemic. The economy, the second largest in the world, grew at a rate of 4.8% annual rate in the previous quarter.
Chinas leaders have tried to stimulate faster growth after a slump in the economy real estate market and disruptions caused by the pandemic rippled through the economy.
As expected, annual growth last year was in line with the government’s official target for an expansion of “about 5%.”
On a quarterly basis, the economy grew by 1.2% from October to December.
Strong exports helped offset weak consumer spending and business investment, contributing to a record trade surplus of $1.2 trillion.
Chinese exports to the US suffered after President Donald Trump returned to office early last year and began raising tariffs. But that decline was offset by shipments to the rest of the world. Rising imports of Chinese goods are prompting some other governments to take action to protect local industries, in some cases raising tariffs.
Trump and Chinese leader Xi Jinping agreed to extend a truce in their devastating tariff war, also easing pressure on Chinese exports. But Chinese exports to the US still fell by 20% last year.
“The key question is how long this growth engine can remain the main driver,” Lynn Song, chief economist for Greater China at Dutch bank ING, recently wrote in a note. “Should more economies also increase import duties on China? Mexico did it and the EU has threatened to do so, there will eventually be greater pressure.”
Chinese leaders have repeatedly emphasized boosting domestic demand as a policy focus, but its effects have so far been limited. A trade-in program for drivers, for example, to replace older cars with more energy-efficient models has lost steam the past few months.
“Stabilization, and not necessarily recovery, of the domestic real estate market is crucial to revive public confidence and thus growth in household consumption and private investment,” said Chi Lo, senior market strategist for Asia Pacific at BNP Paribas Asset Management.
China has also provided trade-in subsidies for home appliances such as refrigerators, washing machines and televisions. While the big consumer stimulus policies in 2025 – including such subsidies – will continue in 2026, they may be scaled back, Weiheng Chen, global investment strategist at JP Morgan Private Bank, said in a recent note.
Investments in artificial intelligence and other advanced technologies remain a top priority for China’s ruling Communist Party as it moves to boost self-reliance and rival the US. Meanwhile, many ordinary Chinese and small businesses have difficulty with it difficult times and worrying uncertainty about jobs and incomes.
Liu Fengyun, a 53-year-old noodle restaurant owner in a small county in China’s southwestern Guizhou province, said doing business has become very difficult these days. Some of her customers told her that “money is hard to make now” and “making breakfast at home is cheaper.”
“People are all saying, ‘The overall environment is not good right now – what else can you expect? People are running out of money. Nothing is easy to do now,'” Liu said.
Kang Yi, head of China’s National Bureau of Statistics, told reporters on Monday that China’s economy has made “steady progress in 2025 despite multiple pressures” and has “solid foundations” in countering risks.
Some economists and analysts believe that China’s actual economic growth in 2025 was slower than official data suggests. The Rhodium Group, a think tank, said last month that it expected China’s economy to grow only 2.5% to 3% last year.
China’s economy grew 5% annually in 2024 and 5.2% in 2023, according to government data. The ambitious official growth targets have also fallen in recent years 6% to 6.5% in 2019 to “about 5%” in 2025.
Slower annual growth is expected for 2026. Deutsche Bank predicts that the Chinese economy will grow by about 4.5% in 2026.
A strong and stable economy is considered crucial for social stability, a primary priority for China’s leaders. While China could likely maintain social stability even at lower economic growth rates, Beijing “wants the economy to continue to grow,” said Neil Thomas, a fellow at the Asia Society Policy Institute’s Center for China Analysis.
China will likely need to maintain an annual expansion of roughly 4 to 5 percent to reach its soft target of $20,000 gross domestic product (GDP) per capita by 2035, he said.
___
Associated Press researcher Shihuan Chen in Beijing contributed to this report.
Copyright © 2026 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.
#Chinas #economy #grows #supported #strong #exports #Trumps #tariffs #WTOP #News