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Economic News

China: Real GDP Grew by 5% in 2025

January 19, 2026
Marc-Antoine Dumont
Senior Economist

Highlights

  • Real GDP expanded by 5% in 2025. On a non‑annualized basis, quarterly growth reached 1.2% in the fourth quarter.
  • Fixed-asset investment fell by 3.8% in 2025, while exports increased by 5.5%.

Comments

There is little doubt that China’s economic performance in 2025 was impressive, especially given that the country faced the highest US tariff rates to date. Despite a slight decline in shipments to the United States, China’s manufacturing sector successfully diversified its international markets, allowing total exports to rise by 5.5%. Industrial production also grew strongly, posting a 5.9% gain in 2025.

 

Moreover, the unpredictability of US trade policy has led a growing number of advanced economies to consider new trade agreements with China, as Canada recently did. Several European leaders are expected to travel to China in the coming months. This could potentially open new markets for China’s automotive industry, which is already highly saturated domestically.

 

However, a two‑speed economy appears to be taking shape. While the external sector outperformed expectations, domestic demand remains weak. The property crisis continues to weigh heavily, and consumption—along with business and household confidence—remains subdued. Retail sales grew 3.7%, the second consecutive year of moderate gains and well below the pre‑pandemic pace of 8% to 10%. Compounding matters, the Chinese government has stopped publishing several indicators over recent years, making it more difficult to properly assess domestic demand and further undermining market confidence.

Implications

China’s real GDP growth is expected to ease slightly in 2026, with an anticipated gain of 4.8%. Despite faltering domestic demand, the country could benefit from the ongoing instability in US policy should Washington’s allies seek to diversify their trade partnerships further. Domestically, however, several challenges persist. The entrenched property downturn, high levels of local government debt and demographic decline continue to exert structural pressure on the economy. Additional support measures are expected early this year, but after four years of crisis, it is increasingly clear that any return to normalcy will be gradual and difficult.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.