On January 19, China released its 2025 economic data. With a 5 percent annual GDP growth rate, China’s economy has surpassed 140 trillion yuan (US$20.2t). It shows not just the scale, but the resilience of the Chinese economy, which is holding steady amid external pressure and internal transition.
Maintaining a 5 percent growth for the third straight year was not easily achieved against a backdrop of repeated tariff hikes and global economic volatility. With exports to the US, which remains China’s third-largest trade partner after ASEAN and the EU, down by 20.2 percent in 2025 in Chinese yuan’s terms, the overall export sector continued to serve as a driving force of growth. In 2025, China’s total exports rose 6.1 percent, underpinned by China’s industrial upgrading and diversified markets. High-tech exports surged 13.2 percent in terms of the Chinese yuan – more than twice the overall pace – underscoring a decisive shift away from low-end manufacturing toward technology-intensive goods.
At home, coordinated fiscal and monetary policies focused on boosting domestic consumption have paid off. Consumption contributed 52 percent of economic growth, up from 44.5 percent in 2024. Measures aimed at easing household pressures, ranging from childcare subsidies to free preschool education have helped shore up confidence. Subsidized trade-in programs for consumer goods delivered a more direct boost to spending.
Structural changes also gathered pace in 2025. The share of the services sector increased to 57.7 percent from 56.8 percent in 2024, and value added in equipment manufacturing and high-tech manufacturing grew by 9.2 percent and 9.4 percent respectively, well above the 5.9 percent increase in overall industrial output.
Investment trends tell a similar story. While overall fixed asset investment fell 3.8 percent, capital flow into hi-tech sectors like information services and aerospace and related high-end equipment manufacturing rose 28.4 percent and 16.9 percent. Credit followed suit: technology-related loans expanded 11.5 percent, compared with a 6.3 percent growth in total loan balances. In September 2025, the market value of the technology and electronics sectors overtook banking for the first time, marking a symbolic transition from old to new growth engines.
Still, there are areas where more progress is needed and potential risks have to be addressed. The property market has yet to fully stabilize, which requires the government to better align land supply with population flows and to manage developers’ liquidity risks more effectively to prevent financial spillovers.
Supportive policies for consumption must continue. The government should further strengthen social security and improve income distribution to provide long-term support to boost spending confidence.
Local government finances remain under strain. The central government should provide stronger financial backing either through expanded transfer payments or higher local debt ceilings, to restore fiscal balance and support development at the grassroots level.
These problems are common worldwide. The technology- and capital-intensive nature of new growth drivers make it harder for traditional industries and workers to adjust quickly, leading to structural divides in employment and income.
Looking ahead, as China’s macroeconomic policy becomes more proactive, the focus should shift from headline indicators toward investing in people and human capital, narrowing the gap between solid macro performance and the uneven everyday experience of ordinary individuals. If successful, the resilience shown in 2025 could underpin a lasting and widely shared growth.
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