China’s economic growth slowed to its weakest pace in nearly three years in the fourth quarter as domestic demand softened, underscoring persistent strains from a prolonged property slump and weak consumer confidence even as full-year growth met Beijing’s official target.
Gross domestic product grew 4.5% in the October-to-December period from a year earlier, the National Bureau of Statistics said Monday. That was down from 4.8% growth in the third quarter and marked the slowest quarterly expansion since early 2023.
Economists surveyed by Reuters had forecast growth of 4.4%.
For all of 2025, the world’s second-largest economy expanded 5.0%, matching the government’s target of around 5% and slightly beating analysts’ expectations of 4.9%. Growth was also 5.0% in 2024.
China’s economy showed resilience last year as exporters diversified away from the United States and U.S. tariff increases were smaller than feared, allowing policymakers to limit broad stimulus. Manufacturing and exports remained key drivers, with China reporting a record trade surplus of nearly $1.2 trillion in 2025, fueled by strong shipments to non-U.S. markets.
However, reliance on external demand highlights vulnerabilities at home. Domestic spending remained weak amid a drawn-out property crisis, falling investment and lingering deflationary pressures.
On a quarter-on-quarter basis, GDP grew 1.2% in the fourth quarter, above forecasts for a 1.0% rise and slightly faster than the 1.1% increase in the previous quarter.
Separate data for December pointed to uneven momentum. Industrial output rose 5.2% from a year earlier, accelerating from November’s 4.8% and exceeding expectations. Retail sales, a key gauge of consumption, grew just 0.9%, down from 1.3% in November and below forecasts of 1.2%.
Investment continued to weigh on growth. Fixed-asset investment fell 3.8% in 2025, the first annual contraction since records began in 1996. Property investment plunged 17.2% last year, worsening from a 10.6% decline in 2024.
Looking ahead, the outlook for 2026 is clouded by rising global trade protectionism and uncertainty over U.S. economic policy. U.S. President Donald Trump has threatened to impose a 25% tariff on countries trading with Iran, adding to external risks.
In an effort to support growth, China’s central bank last week cut sector-specific interest rates and signaled it could further lower banks’ reserve requirement ratios and benchmark rates if needed.
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