In 2025, the Chinese economy achieved a solid growth rate of 5%, demonstrating four prominent characteristics: stability, progress, innovation, and resilience. With a series of policies gradually taking effect, a strong economic start in 2026 is anticipated.
On January 19, the National Bureau of Statistics released the economic data for 2025. The Gross Domestic Product (GDP) reached 140.19 trillion yuan, representing a 5.0% increase over the previous year calculated at constant prices. Quarterly breakdowns show GDP grew 5.4% year-on-year in the first quarter, 5.2% in the second quarter, 4.8% in the third quarter, and 4.5% in the fourth quarter.
In 2025, the value-added of industrial enterprises above the designated size grew by 5.9% compared to the previous year, while total retail sales of consumer goods increased by 3.7%. However, the national fixed asset investment (excluding rural households) declined by 3.8%, and the total value of goods imports and exports rose by 3.8%. Analyzing the contributions from the "troika" of economic growth drivers, final consumption expenditure, gross capital formation, and net exports of goods and services contributed 52.0%, 15.3%, and 32.7% to economic growth in 2025, respectively.
While economic growth showed a slight moderation in the third and fourth quarters of 2025, can China's economic recovery maintain its positive momentum into 2026? On one hand, the Chinese economy advanced under pressure towards higher-quality development in 2025, successfully achieving its main targets, which demonstrated strong resilience and vitality, laying a solid foundation for economic development in 2026. On the other hand, from a policy perspective, the State Council executive meeting has deployed a package of policies to promote domestic demand through fiscal and financial coordination; relevant departments are accelerating implementation to boost domestic demand.
The "Two New" policies continue to be optimized, with the first tranche of funds already disbursed in advance, creating favorable conditions for a steady economic recovery in 2026. Since the beginning of the year, active trading in the A-share market, with the Shanghai Composite Index hitting a new ten-year high, also reflects strong market confidence in the continuation of the positive economic trend for 2026.
Kang Yi, Commissioner of the National Bureau of Statistics, stated, "Assessing China's economy requires a comprehensive, dialectical, and long-term perspective. We must look not only at the current situation but also at long-term trends; not just at quarterly fluctuations but at the full-year trajectory; not merely at the aggregate size but at the quality of development. Looking at the whole of 2026, the underlying conditions and fundamental trends supporting China's long-term economic growth remain unchanged, the overarching trend of high-quality economic development remains unchanged, and there is a foundation and conditions for maintaining stable and positive economic performance."
Commissioner Kang Yi summarized the performance of the Chinese economy in 2025 by four characteristics: stability, progress, innovation, and resilience. Firstly, the foundation of "stability" was consolidated. In 2025, "stability" was a standout feature of the Chinese economy. Faced with a complex and severe situation involving drastic changes in the external environment and increasing domestic difficulties and challenges, China implemented more proactive and effective macro policies. These not only effectively mitigated the adverse impacts of external changes but also steadied the foundation of development amidst challenges, solidifying its根基.
In 2025, GDP surpassed the 140 trillion yuan milestone for the first time, growing 5.0% year-on-year; the average surveyed urban unemployment rate was 5.2%, indicating overall stable employment; goods trade reached a new record high, and foreign exchange reserves exceeded $3.3 trillion.
Secondly, the pace of "progress" became more forceful. Despite a more complex internal and external environment and rising pressure to stabilize growth, China unwaveringly pursued a path of high-quality development, accelerated the transformation of old and new growth drivers, and deepened reform and opening up, leading to an improving economic trend. Economic restructuring was optimized; the value-added of high-tech manufacturing above the designated size accounted for 17.1% of the total industrial value-added above designated size in 2025, and the contribution rate of final consumption expenditure to economic growth exceeded 50%.
Reform and opening up deepened continuously, with the construction of a unified national market advancing significantly, the formal implementation of the law on promoting the private economy, and visible results in comprehensively addressing "involutionary" competition. The Hainan Free Trade Port commenced full island customs closure operations, marking an important step towards high-level opening up. China's total goods imports and exports grew by 3.8% in 2025. Livelihood safeguards were effective, with per capita disposable income of residents increasing by 5.0% in real terms, keeping pace with economic growth.
Thirdly, new drivers of "innovation" were cultivated and expanded. The year 2025 was marked by a distinct characteristic of the Chinese economy moving towards innovation. The R&D intensity reached 2.8% in 2025, an increase of 0.11 percentage points from the previous year, exceeding the average level of OECD countries for the first time. Data from the World Intellectual Property Organization showed that China's innovation index ranking entered the global top ten for the first time.
From new explorations in basic research to breakthroughs in key technologies, from the deep integration of scientific/technological innovation and industrial innovation to the widespread application of benefits for the people, frequent successes were reported in frontier fields such as artificial intelligence, quantum technology, and brain-computer interfaces. A number of major scientific and technological achievements emerged successively, and new quality productive forces continued to develop and strengthen. In 2025, the value-added of digital product manufacturing above the designated size grew by 9.3% year-on-year, with server and industrial robot production achieving high growth rates; green electricity, green energy, and the green economy flourished, with new energy vehicles accounting for over 50% of domestic new car sales.
Fourthly, the characteristic of "resilience" became increasingly prominent. Despite significant disruptions to global trade order and the pains associated with the domestic transition between old and new growth drivers, the Chinese economy still achieved a "quantitative leap" and a "qualitative improvement," fully demonstrating its ability to adapt and overcome challenges, as well as its pressure-resistant resilience in an unstable and uncertain environment.
Globally, China's economic growth rate ranked among the top of major economies, making it the most stable and reliable source of growth for the global economy, with its contribution to world economic growth estimated at around 30%. The pattern of diversifying and stabilizing foreign trade accelerated; China is now the main trading partner for over 150 countries and regions, with high-tech, high-value-added products becoming the main drivers of export growth, showcasing strong foreign trade resilience. Exports of high-tech products increased by 13.2% in value in 2025.
Furthermore, with the effective implementation of policies to vigorously stimulate domestic demand and the deepening of "anti-involution" policies, the price level warmed up in the second half of 2025. The Consumer Price Index (CPI) rose by 0.8% year-on-year in December 2025, the highest increase since March 2023, while the core CPI maintained a year-on-year increase above 1% for four consecutive months. The year-on-year decline in the Producer Price Index (PPI) narrowed, and it registered month-on-month increases for three consecutive months. The warming prices contributed to a rebound in the nominal growth rates of major economic indicators, gradually improving the public's "perceived" economic experience.
The national per capita disposable income of residents was 43,377 yuan in 2025, a nominal increase of 5.0% from the previous year; after deducting price factors, the real growth was 5.0%, synchronized with economic growth.
In 2025, significant progress was made in innovation-driven development, industrial quality improvement, digital empowerment, and green transformation. New quality productive forces transitioned from conceptual consensus to tangible developmental outcomes, not only making economic growth more qualitative and sustainable but also affirming China's firm determination and effective actions to proactively seek change and achieve innovative breakthroughs in a complex environment.
Commissioner Kang Yi summarized the development of new quality productive forces in 2025 into four "strengths": the continuous leap in technological hard power, the gathering momentum of industrial innovation capability, the显著 enhancement of digital penetration, and the comprehensive demonstration of green leadership.
First, technological hard power continuously leaped forward. In 2025, nationwide R&D expenditure reached 3.9262 trillion yuan, maintaining its position as the second highest in the world for many years. China became the first country to possess over 5 million domestic valid invention patents, led the world in PCT international patent applications for six consecutive years, and strengthened its reserve of high-value patents in key core technology areas. Major national projects reported frequent successes, with a surge in original and disruptive innovations: the "Jiutian" drone successfully completed its maiden flight, the Tianwen-2 probe embarked on its asteroid mission, the first electromagnetic catapult-equipped aircraft carrier officially entered service, and the CR450 high-speed train set new speed records for China. These achievements demonstrate China's firm and powerful strides towards high-level self-reliance and strength in science and technology.
Second, industrial innovation capability gathered momentum. Emerging fields such as high-end equipment, green energy, and smart manufacturing continued to see investment expansion and production increases, with the integrated development of scientific/technological innovation and industrial innovation yielding substantial results. In 2025, the value-added of equipment manufacturing and high-tech manufacturing above the designated size accounted for 36.8% and 17.1% of the total industrial value-added above designated size, respectively. The low-altitude economy "soared," embodied intelligence demonstrated "agile thinking and deft action," with the output of civil drones and industrial robots growing by 37.3% and 28% year-on-year, respectively. The smart manufacturing initiative advanced steadily, the number of smart factories increased steadily, and integrated industrial internet applications achieved comprehensive coverage across 41 major industrial categories.
Third, digital penetration was significantly enhanced. Digital industries, digital consumption, and digital infrastructure expanded across all domains, integrating into the production and operations of countless industries and the daily lives of millions of households. In 2025, the value-added of digital product manufacturing above the designated size grew by 9.3% year-on-year, while the value-added of the information transmission, software, and information technology services sector increased by 11.1%. New consumption models and scenarios rapidly expanded, driving online retail sales growth of 8.6%. The construction of new infrastructure such as 5G, gigabit optical networks, and the Internet of Things progressed in an orderly manner.
Fourth, green leadership was comprehensively demonstrated. China accelerated the construction of a new energy system that is clean, low-carbon, safe, and efficient. In 2025, electricity generation from clean energy sources like hydropower, nuclear power, wind power, and solar power by industries above the designated size increased by 8.8% year-on-year. The proportion of non-fossil fuels in total energy consumption increased by approximately two percentage points compared to the previous year. The output of green energy equipment, green materials, and other related products achieved rapid growth. The competitiveness of the new energy industry continued to improve, with annual production and sales of new energy vehicles both exceeding 16 million units, and green production and lifestyles became more widespread. Significant results were achieved in the green transformation of traditional industries; in 2025, the energy consumption per unit of value-added showed notable declines in major energy-consuming industries above the designated size, such as building materials, steel, and non-ferrous metals.
This article was published in the January 24, 2026, issue of Securities Market Weekly.
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