Against a complex and severe domestic and international backdrop, the Chinese economy ascended to a new level of 140 trillion yuan in 2025 with a growth rate of 5%. The significance of this report card extends beyond the numbers themselves; the improvement in the supply-demand structure and the profound shifts in industrial composition and growth drivers behind it are even more noteworthy.
The "gold content" of the 5% growth rate lies primarily in its structure and quality. "Behind the 5% growth rate, its gold content is mainly reflected in the improvement of quality and the optimization of structure," said Tian Xuan, a deputy to the National People's Congress and a Boya Distinguished Professor at Peking University, pinpointing the key to interpreting this performance report. "The value-added of equipment manufacturing and high-tech manufacturing grew by 9.2% and 9.4% respectively, significantly faster than the overall growth of industrial enterprises above the designated size, indicating explosive growth in new quality productive forces and highlighting the increased technological content and innovation-driven nature of economic growth." Tian Xuan believes that behind the 140 trillion yuan economic aggregate lies the continuous optimization and upgrading of structures such as the service industry and high-tech industries, which not only consolidates China's position as the world's second-largest economy but also, through deep integration into global industrial and supply chains, makes it a primary engine and "stability anchor" for global economic recovery and growth.
Zhang Bin, Deputy Director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, analyzed that in 2025, under multiple pressures including international tariff shocks, geopolitical conflicts, and a deep domestic real estate market adjustment, China steadily supported 5% growth through strong counter-cyclical adjustment policies, successful trade response measures, and the market's own clearing and repair mechanisms, making this achievement hard-won.
Lu Ming, a member of the National Committee of the Chinese People's Political Consultative Conference and a specially appointed professor at the Antai College of Economics and Management, Shanghai Jiao Tong University, observed positive trend signals. "The 5% economic growth was very difficult to achieve, with developments in the high-tech sector and exports of the 'new three' items making huge contributions." He believes this data indicates that the Chinese economy is showing signs of stabilizing and improving, which is significant for achieving medium- to long-term development goals and enhancing initiative in international competition.
Two major positive signals in the 2025 Chinese economic annual report are particularly noteworthy: they point to the continuous improvement of the supply-demand structure and the constant consolidation of new growth drivers. The first signal comes from the stabilization and improvement of the price system. From September to December last year, core CPI remained in a moderate range above 1% for four consecutive months. Tian Xuan interprets this change as a "very positive signal." "This usually means consumer confidence is recovering, and corporate pricing power is strengthening, which corroborates the active performance of service consumption during the same period." Tian Xuan judges that as the effects of macroeconomic policies continue to manifest, the consumer market is gradually shaking off previous pressures, and its recovery trend is "sustainable." This mild yet persistent price recovery provides a favorable environment for the smooth circulation of the economy.
Compared to the mild recovery on the consumption side, although the annual PPI fell by 2.6% year-on-year, the downward trend was strongly reversed in the second half of the year, with the decline narrowing continuously and turning positive month-on-month. Tian Xuan analyzes that behind this, policies against "involution" and capacity management played a key role, rapidly improving the supply-demand balance in some industries, while demand pull from high-tech industry growth and the mild rebound in global commodity prices provided structural support for price stabilization. Lu Ming, however, believes that the recovery in service consumption also provided important support for the halt in price declines and their subsequent rise.
The second signal comes from the continuous leap in the industrial structure. In 2025, the value-added of high-tech manufacturing industries above the designated size led the way with a growth rate of 9.4%, contributing over a quarter to industrial growth. Zhang Bin believes that full market competition has honed the core competitiveness of enterprises, a high degree of openness has facilitated the integration of global resources, massive economies of scale have provided room for trial and error in innovation, and coupled with complete infrastructure and a large-scale, high-quality labor force, these elements have converged to form a deep "moat" supporting the continuous upgrading of Chinese manufacturing.
Despite the smooth achievement of the 2025 economic growth target, looking at the figures quarter by quarter, GDP growth showed a "high first, low later" trend, without the significant year-end "surge" seen in previous years. Experts believe this is the result of combined pressures from internal and external demand, structural contradictions, and short-term factors, and also objectively reflects the phased characteristics of the economic transition process. "The fluctuation in economic growth in the fourth quarter was partly influenced by the high base effect from the same period in 2024; looking at the growth trajectory for the whole of 2025, it was relatively stable overall," analyzed Zhang Bin. Tian Xuan pointed out that the slowdown in growth in the fourth quarter was mainly affected by multiple factors, including an still unstable foundation for consumption recovery, the deep adjustment of the real estate market, and cautious expectations for private investment. He suggested intensifying macroeconomic policy adjustments, further unleashing consumption potential by increasing household income, improving social security, and optimizing the consumption environment, promoting stable development of the real estate market through city-specific policies, actively expanding effective investment, and simultaneously strengthening the leading role of technological innovation.
Can the Chinese economy maintain its medium-to-high-speed development momentum in 2026? In the latest World Economic Outlook released by the International Monetary Fund (IMF) in January of this year, China's economic growth forecast was raised to 4.5%, but it still falls short of the actual growth rate in 2025. Experts believe this reflects a cautious assessment of internal and external pressures but maintain full confidence in the inherent resilience of the Chinese economy. Tian Xuan stated that the fundamentals of China's long-term economic improvement remain unchanged, its advantage of a supersized market is significant, and its macroeconomic policy toolkit is ample; with the continuous deepening of the innovation-driven development strategy and the steady advancement of Belt and Road cooperation, the economy is expected to maintain stable growth in 2026, with development quality steadily improving. Lu Ming believes that China's economic fundamentals have achieved a trend stabilization from 2024 to 2025, with recent positive signs in consumption, prices, and the stock market; the 2026 economic growth target might be set around 5%. Beyond this, several key variables need attention for the 2026 Chinese economy: whether the impact on the investment side can be effectively alleviated, whether the effects of the real estate market adjustment can be gradually digested, and whether the high export growth trend can be sustained. Zhang Bin judges that if counter-cyclical policies are sufficiently forceful, the economic growth situation in 2026 may be better than the IMF's forecast, potentially achieving growth around 5%. He stated that externally, loose global fiscal and monetary policies provide some support for China's exports; internally, the Central Economic Work Conference has clarified the policy direction of expanding domestic demand, fiscal policy is being strengthened, and if further counter-cyclical monetary policies are implemented, it will better form a synergistic policy force to aid sustained and stable economic development.
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