China closed 2025 with GDP expanding 5.0% to 1.401879 trillion yuan, marking the first passage beyond the 140 trillion-yuan threshold and underscoring the economy’s capacity to withstand multiple external and domestic headwinds. Growth slowed across the year, with quarterly increases of 5.4% in Q1, 5.2% in Q2, 4.8% in Q3 and 4.5% in Q4, signalling a steady but decelerating momentum into year-end.
Beijing credited the outcome to a heavier dose of countercyclical policy and a push for higher-quality growth. Authorities raised the fiscal deficit target by one percentage point, expanding deficit-financed spending by about 5.66 trillion yuan and increasing allocations for special-purpose bonds and ultra-long-term sovereign instruments by several hundred billion yuan, while also making additional use of local bond quotas in the fourth quarter.
Beyond fiscal stimulus, structural change played a notable role. High-tech manufacturing — described by Chinese analysts as the leading edge of “new quality productive forces” — outpaced the broader economy and helped accelerate industrial upgrading. At the same time, external demand remained strong: exports, measured in dollars, rose by roughly 5.5% in 2025, and net exports contributed about 1.3 percentage points to growth, well above the past-decade average.
Domestic commentators framed the year's performance as a demonstration of resilience and an ongoing shift in policy emphasis from cutting excess to expanding domestic consumption and reducing internal competition. Still, persistent supply–demand imbalances, a fragile property sector and elevated local government debt were flagged as continuing constraints that leave policy makers walking a narrow path between supporting growth and containing financial risks.
Looking ahead, most China-watchers quoted by Chinese outlets expect growth to moderate to roughly 4.8–5.0% in 2026. Forecasters highlight four dynamics to watch: the trajectory of property and local-government-financing stress, the durability of export demand in the face of higher U.S. tariffs, the effectiveness of targeted fiscal and infrastructure support, and the speed at which consumer activity recovers under “more proactive” macro policy.
For the global economy, a Chinese expansion at around 5% provides a sizable tailwind for commodity exporters and trade partners, but the composition of growth matters. A tilt toward high-tech production and policy-driven infrastructure investment is less inflationary for the world than a consumer-led bounce would be, while a slowdown in exports later in 2026 would transmit more directly to East Asian supply chains and trade-dependent economies.