China's economy is experiencing a significant slowdown in growth: According to data from the Beijing Bureau of Statistics, in the last quarter of 2025, gross domestic product (GDP) grew by 4.5% compared to the same period of the previous year. This marked the weakest quarterly growth in the world's second-largest economy since the end of strict restrictions imposed due to the pandemic about three years ago. In the previous three quarters, growth was higher: 5.4%, 5.2% and 4.8%, respectively.
For the whole of 2025, growth of 5% was still recorded. Thus, the target of "about 5%" set by the Chinese government was achieved. At the same time, however, this is one of the lowest annual growth rates in decades.
Foreign trade supports the economy - despite Trump
Economists see the reason primarily in weak domestic demand: the tight labor market and falling real estate prices have a depressing effect on consumers. A slowdown is also observed in investment. Investment in fixed assets fell by 3.8% in 2025 compared to the previous year. The decline in the real estate sector is particularly clear: investment in real estate fell by 17.2%.
The economy continues to be supported by foreign trade. Despite ongoing tensions with the US and new uncertainties over trade policy, Beijing last week announced a record trade surplus of $1.2 trillion for 2025.
The trade dispute with Washington has led to a significant drop in exports to the US by 20 percent, as well as a drop in imports from the US by 14.6 percent. However, other markets have been able to compensate for these losses.
Experts: Slowdown in growth will continue
International organizations expect further slowdown in the growth of the Chinese economy in the coming years. The World Bank predicts growth of about 4.4% for 2026, and the International Monetary Fund - about 4.5%. US investment bank Goldman Sachs is a little more optimistic with a forecast of 4.8%, but also points out that robust exports are likely to remain the mainstay.
At the same time, Goldman Sachs warns of ongoing structural problems. In China, building an economy driven by consumption and services will take "years, if not decades", the bank's chief economist for China, Hui Shan, wrote in a recent analysis. In addition, the real estate sector has not yet bottomed out, and the weak labor market continues to suppress household purchasing sentiment.
Demographic crisis: fewer babies have ever been born
Added to this is the demographic crisis. According to official data, in 2025 China's population decreased by 3.39 million, and now it numbers 1.405 billion people. This marked the fourth consecutive year of population decline, with the decline accelerating. While the number of deaths rose to 11.31 million, the number of births fell to a record low of 7.92 million.
Today, only 5.63 children are born per 1,000 residents. This is the lowest figure since the founding of the People's Republic of China in 1949. Some of the reasons for this are the high cost of raising children, expensive housing, but also economic insecurity among young people. The number of weddings also continues to decline.
In 2016, the Chinese government abolished the so-called one-child policy, which was introduced in the early 1980s to control rapid population growth. From 2021, couples will be allowed to have three children. However, the UN expects China's population to shrink from 1.4 billion to 800 million by 2100. To ensure a sufficient workforce, the government plans to gradually raise the retirement age.
The development complicates Beijing's plans to boost domestic consumption. The looming loss of hundreds of millions of workers puts additional pressure on already stretched pension funds.