China’s economic growth slowed to its weakest rate in three years during the fourth quarter of 2025 as domestic demand weakened.
China’s gross domestic product (GDP) grew an annualized 4.5% in the October-to-December quarter, according to data from the National Statistics Bureau.
That marked a slowdown from 4.8% growth in last year’s third quarter and was the weakest reading since the first quarter of 2023, when growth also came in at an annualized 4.5%.
However, full-year economic output in China was 5%, meeting Beijing’s official target despite growing trade frictions with the U.S. and a prolonged real estate slump.
The latest data showed that domestic consumption in China weakened and the country’s investment decline worsened during the fourth quarter.
Retail sales in China grew 0.9% in December from a year earlier, missing economists’ forecast for 1.2% growth. That marked the slowest growth since December 2022.
Industrial output rose 5.2% in Q4, topping expectations for 5% growth.
Fixed-asset investment, which includes real estate, contracted 3.8% last year, worse than economists’ forecast for a 3% decline.
Investment in China’s property development continued to fall as a prolonged real estate crisis worsened, falling 17.2% in 2025 from a 10.6% decrease in 2024.
The urban unemployment rate in China remained unchanged at 5.1% at the end of last year.
On a positive note, China reported a record trade surplus of $1.2 trillion U.S. in 2025, driven by surging exports to non-U.S. markets as manufacturers redirected shipments to avoid tariffs.
Economists within China have called for changes to shift the growth model toward domestic consumption and reduce reliance on exports and investment.
Those economists warn that China’s current growth model poses long-term risks for the country of 1.4 billion people.
