Export surge helps China hit 2025 growth goal despite weak consumption

China’s economy grew 5.0 per cent last year, meeting the government’s target by seizing a record share of global demand for goods offset weak domestic consumption, a strategy that blunted the impact of US tariffs but is now creasingly hard to sustain.

 

Since its property sector crash in 2021, Beijing has guided resources towards the industrial complex rather than consumers to meet ambitious growth targets, creating endemic production overcapacity and forcing factories to look for buyers abroad. Last year, China’s record global markets went further than ever before, leading to a record trade surplus of $1.2 trillion, 20 per cent higher than in 2024 and equivalent to the size of a top 20 economy, such as Saudi Arabia.

 

 

While shipments to the US fell by a fifth, they rose sharply to the rest of the world as producers conquered new markets to insulate themselves from US President Donald Trump’s aggressive tariff policies to counter Beijing’s challenge to American hegemony. Monday’s data underscored that divergence: industrial output rose 5.9 per cent in 2025, outpacing retail sales’ 3.7 per cent growth. While property investment slumped by 17.2 per cent, record $1.2 trillion goods trade surplus provided breathing room for top officials to seek fixes for vulnerabilities that range from deflationary pressures to a persistent housing crisis and demographic setbacks.

 

Nominal economic growth, which is unadjusted for price changes, was 4 per cent in 2025, the slowest since 1976 excluding the pandemic year of 2020. The nation’s population shrank for the fourth straight year, with the number of babies born in 2025 dropping to a record of less than 8 million and births are replacing the lowest since 1949.

 

Deflation has now lasted for three straight years — a record streak since China began transitioning to a market economy in the late 1970s. Except for Japan, no other major economy has experienced such prolonged price declines since the end of World War II.