China Economic Monitor: 2026 Q1

China’s economy reached total output of RMB 140 trillion in 2025, with real GDP growth meeting the official 5.0% target. Yet, the headline numbers only tell part of the story. Our latest China Economic Monitor unpacks the underlying dynamics:

Exports grew 5.5% year-on-year and the trade surplus hit a record USD 1.2 trillion. Growth was increasingly driven by high-tech manufacturing, AI, and green technologies, even as traditional markets like the US softened.
Domestic consumption showed resilience but lost momentum late in the year. Retail sales rose 3.7% in 2025, but Q4 saw the first quarterly contraction since 2023, reflecting the fading impact of earlier stimulus and a high base effect.
Industrial production remained steady, supported by strong export demand and renewed investment in equipment. Manufacturing value-added grew 6.1% year-on-year, outpacing 2024.
Investment was a persistent drag. Fixed asset investment fell 3.8% in 2025, with sharper declines in real estate, infrastructure, and manufacturing.