Third-Quarter Data Highlights a Weaker Expansion
China’s economy grew 4.8% year-on-year in the third quarter of 2025, marking its slowest pace since late 2023 and slightly below analysts’ expectations of 5%. The figure compares with 5.2% growth in the second quarter and underscores the difficulty Beijing faces in sustaining momentum amid property market stress, subdued consumer sentiment, and ongoing trade frictions. On a quarterly basis, GDP rose 1.1%, showing a modest improvement from 0.8% in the prior quarter.
According to the National Bureau of Statistics, overall economic activity remains stable but uneven. The services sector continued to expand, buoyed by tourism and logistics, while industrial production weakened due to soft global demand. The government reaffirmed its annual growth target of around 5%, signaling confidence in policy measures introduced earlier this year to support infrastructure investment and private enterprise. However, economists warn that sustaining such growth will require stronger domestic demand and renewed investor confidence.
Trade Pressures and Manufacturing Headwinds
External trade remains a central drag on growth. Shipments to the United States fell more than 7% year-on-year in September following new tariffs announced by former U.S. President Donald Trump’s campaign platform, which pledged to impose duties of up to 60% on Chinese imports if re-elected. Despite this, total exports rose slightly due to resilient sales to Southeast Asia and Africa. Analysts suggest that China’s manufacturing base is undergoing structural change, pivoting toward higher-value goods such as electric vehicles, batteries, and solar panels to offset losses in traditional sectors like textiles and furniture.
Industrial production increased by 4.4% in September, down from 5.1% in August. Meanwhile, the Caixin manufacturing PMI registered 49.8, remaining below the 50-point threshold for the sixth consecutive month, indicating continued contraction. Factories cite weaker orders from Europe and persistent supply-chain disruptions as key obstacles.
Property Market and Consumer Spending Weakness
The long-running property crisis continues to weigh heavily on the economy. Real-estate investment dropped 13.9% in September, the steepest decline in over two years. Several large developers, including China Evergrande Group and Country Garden, remain under financial strain despite partial government intervention. Residential construction starts fell more than 20%, while property sales declined nearly 17% compared with the previous year.
Consumer spending, once a pillar of recovery after the pandemic, has also softened. Retail sales grew only 3% in September, below the 4.5% pace recorded in August. Younger consumers remain cautious amid rising unemployment, official data shows the jobless rate for those aged 16-24 hovering near 15%. Economists say this hesitancy underscores weak household confidence, despite recent tax cuts and mortgage-rate reductions aimed at encouraging spending.
Policy Measures and Outlook
In response to these pressures, Chinese authorities have rolled out a series of targeted measures, including additional 1 trillion yuan (about 137 billion US dollars) in local government bond quotas to fund infrastructure projects. The People’s Bank of China has also reduced reserve-requirement ratios to inject liquidity into the financial system. Yet, policymakers remain wary of large-scale stimulus, fearing that excessive borrowing could exacerbate long-term debt risks.
Economists expect China to end 2025 with overall GDP growth near 5%, in line with the official goal. However, uncertainty lingers around the strength of the global economy and the evolving U.S.–China trade relationship. The upcoming Communist Party Central Economic Work Conference in December is expected to clarify Beijing’s strategic priorities, particularly its focus on domestic innovation, green transition, and technological self-reliance to counter external headwinds.