China meets 5% growth target in 2025 despite Trump's tariffs
What's the story
China's economy grew by 5% in 2025, according to government figures. The growth was driven by record exports that helped Beijing meet its annual target of "around 5%." However, the data also showed a slowdown in economic growth rate to 4.5% in Q4 last year from a year earlier. This comes as China continues to grapple with a protracted property crisis and weak domestic spending amid US-China trade tensions.
Trade dynamics
China's record trade surplus amid US tariffs
China recently reported a record trade surplus of $1.19 trillion, the highest in history. The figure is based on the value of goods and services sold to other countries versus those imported. The surplus was fueled by an increase in exports to non-US markets, even as President Donald Trump kept his tariffs policy intact.
Economic hurdles
Challenges and resilience in China's economy
Kang Yi, head of China's National Bureau of Statistics, acknowledged that the country's economy "faces problems and challenges, including strong supply and weak demand." However, he also expressed optimism that it can "maintain stable, sound growth momentum this year." Despite these challenges, China's economic resilience was bolstered by lower-than-expected US tariffs after Beijing and Washington agreed to a tariffs pause.
Market challenges
Domestic issues and retail sales in China
Despite a rise in factory output by 5.2% year-on-year in December, China's domestic economy is facing several challenges. An ongoing property crisis and rising local government debt have made businesses reluctant to invest and consumers cautious about spending. Retail sales grew just 0.9% in December—the slowest rate in three years—highlighting these market challenges.
Population decline
China's demographic crisis and future workforce challenges
China's demographic crisis continues to worsen, with the population declining for the fourth consecutive year. The total number of people in China fell to 1.41 billion in 2025, according to the country's National Bureau of Statistics. The birth rate also fell to 5.63 births per 1,000 people, adding to the challenges facing Beijing's leaders as hundreds of millions are expected to exit the workforce over the next decade.