On January 19, the National Bureau of Statistics released data on the performance of the national economy in 2025. Preliminary calculations indicate that the annual gross domestic product (GDP) reached 140.1879 trillion yuan, representing a year-on-year growth of 5.0% calculated at constant prices. By quarter, 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. Total retail sales of consumer goods for the year amounted to 50.1202 trillion yuan, a 3.7% increase compared to the previous year. In December, retail sales of consumer goods rose 0.9% year-on-year but fell 0.12% month-on-month. The nation's fixed asset investment (excluding rural households) for the full year reached 48.5186 trillion yuan, declining by 3.8% compared to the previous year; excluding real estate development investment, national fixed asset investment decreased by 0.5%. By sector, infrastructure investment fell 2.2%, manufacturing investment increased 0.6%, and real estate development investment plummeted 17.2%. In December, fixed asset investment (excluding rural households) decreased by 1.13% month-on-month.
At a press conference held by the State Council Information Office, National Bureau of Statistics Commissioner Kang Yi stated that for the full year of 2025, the contribution rates of final consumption expenditure, total capital formation, and net exports of goods and services to economic growth were 52%, 15.3%, and 32.7%, respectively. In the fourth quarter of last year, the contribution rates of final consumption expenditure, total capital formation, and net exports of goods and services to economic growth were 52.9%, 16%, and 31.1%, respectively.
The annual economic growth target was successfully achieved, with full-year GDP growing 5.0% compared to the previous year. By quarter, 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. Data from the National Bureau of Statistics shows that in 2025, the contribution rates of final consumption expenditure, total capital formation, and net exports of goods and services to economic growth were 52.0%, 15.3%, and 32.7%, respectively; in the fourth quarter, the contribution rates were 52.9%, 16.0%, and 31.1%, respectively. Economic operations in the fourth quarter exhibited a relatively pronounced characteristic of "external demand being stronger than internal demand."
Wang Qing, Chief Macro Analyst at Dongfang Jincheng, believes that exports maintained relatively rapid growth in the fourth quarter, increasing the pulling force of external demand on economic growth. On the domestic demand side, the domestic real estate market continued its adjustment in the fourth quarter, local government revenue from state-owned land use rights transfers declined significantly, and fluctuations in the external environment impacted manufacturing investment confidence, leading to an accelerated decline in investment during the quarter. Simultaneously, due to the high base effect from strong consumer promotion policies in the same period last year, persistently weak consumer confidence, and the tightening of national subsidies in some regions during the fourth quarter, the growth rate of goods consumption also declined to some extent.
"Looking at the full-year economic trend, economic performance in 2025 was stronger in the first half and weaker in the second half," pointed out the research department of CICC. In the first half of the year, proactive fiscal policy implementation, relatively fast growth in durable goods consumption, and a high year-on-year growth rate in infrastructure investment supported the domestic economy; in the second half, fiscal support weakened, consumption and infrastructure investment declined, coupled with a weakening real estate market, insufficient profit expectations, and declining manufacturing investment against the backdrop of anti-internal competition, leading to a slowdown in actual GDP growth.
Wang Qing stated that the successful achievement of the annual growth target was primarily due to three reasons: first, the intensity of counter-cyclical adjustment increased in 2025, with more proactive and forceful macroeconomic policies being fully implemented. Second, represented by high-tech manufacturing, the new quality productive forces sectors grew significantly faster in 2025, not only driving continuous economic transformation and upgrading but also strongly pulling the overall economic growth rate. Third, amid the volatile global trade landscape in 2025, China's exports demonstrated strong resilience, with the pulling force of external demand on economic growth remaining high.
Total retail sales growth showed a slight acceleration for the full year 2025 compared to the previous year. Total retail sales of consumer goods for the full year 2025 reached 50.1202 trillion yuan, a 3.7% increase from the previous year, slightly faster than the 3.5% growth in the preceding year. In December, retail sales of consumer goods grew 0.9% year-on-year, a further decline from the previous reading of 1.3%. In December, retail sales of goods amounted to 3.9398 trillion yuan, up 0.7% year-on-year, while catering revenue reached 573.8 billion yuan, increasing 2.2%; both figures showed a decline compared to previous readings.
In December, among goods eligible for consumption subsidies, retail sales of household appliances and audio-video equipment, furniture, and automobiles continued negative year-on-year growth, declining by 18.7%, 2.2%, and 5.0% respectively; however, the rate of decline narrowed by 0.7, 1.6, and 3.3 percentage points compared to the previous month. Retail sales of cultural and office用品, sports and recreation用品, and communication equipment grew by 9.2%, 9.0%, and 20.9% year-on-year, respectively. Among these, the growth rate for cultural and office用品 retail sales slowed by 2.5 percentage points from the previous month, while the growth rates for sports and recreation用品 and communication equipment retail sales accelerated by 8.6 and 0.3 percentage points, respectively, compared to the previous month.
The research department of CICC believes that from the second to the fourth quarter of 2025, as the intensity of "national subsidies" gradually tapered off and the high base effect became more apparent, the performance of subsidized categories overall declined. Coupled with the relative weakness of the real estate market, the performance of building and decoration materials also gradually weakened, and automobile retail performance was generally soft, leading to a gradual slowdown in China's retail sales growth rate. For the full year, the year-on-year growth rate of total retail sales of consumer goods in 2025 showed a slight acceleration compared to the previous year. Wang Qing attributes this mainly to the strengthening and expansion of consumption subsidy policies; the funds allocated for consumption promotion policies doubled from 150 billion yuan the previous year to 300 billion yuan in 2025, and frequent support measures such as consumer loan interest subsidies provided strong support for household consumption.
"Promoting investment to stop falling and stabilize" has been identified as a key task for 2026. The nation's total fixed asset investment (excluding rural households) for the full year was 48.5186 trillion yuan, a decrease of 3.8% compared to the previous year, with the rate of decline expanding by 1.2 percentage points from the previous reading of -2.6%. Excluding real estate development investment, total national fixed asset investment for the full year 2025 decreased by 0.5%. In December, fixed asset investment (excluding rural households) fell 1.13% month-on-month.
Wen Bin, Chief Economist at China Minsheng Bank, stated that for the full year, the investment growth rate has been continuously declining since the second quarter, becoming a major drag on economic performance. The Central Economic Work Conference identified "promoting investment to stop falling and stabilize" as a key task for 2026.
By sector, for the full year 2025, infrastructure investment decreased by 2.2%, manufacturing investment grew by 0.6%, and real estate development investment fell sharply by 17.2%. The floor space of newly built commercial housing sold nationwide was 881.01 million square meters, down 8.7%; the sales value of newly built commercial housing was 8.3937 trillion yuan, down 12.6%. Compared to previous readings, the investment growth rates in all three major sectors declined.
Wang Qing believes that the recent sharp decline in infrastructure investment growth may be affected by the ongoing adjustment in the real estate market and the decline in revenue from state-owned land use right transfers. Recent increases in local fiscal pressure, coupled with constraints on local governments' ability to raise funds for infrastructure investment due to stricter discipline against irregular debt issuance and new hidden debt during the debt resolution process, have imposed certain limitations. Furthermore, the deployment of 500 billion yuan in new policy-oriented financial instruments was completed in October, and an additional 500 billion yuan in special bonds were issued before the year-end, with 200 billion yuan allocated for project deployment. These policies contributed to the increase in medium- and long-term corporate loans in December, and the construction PMI index rebounded sharply into expansion territory. However, there is a time lag from fund allocation and project commencement to the formation of physical工作量, which had not yet reversed the downward trend in infrastructure investment in December.
Regarding manufacturing investment, its growth rate showed a volatile weakening trend throughout 2025. Wen Bin attributes this to several factors: first, amid the矛盾 of strong supply and weak demand, industry capacity utilization marginally declined, coupled with insufficient profit margin recovery, leading to reduced expectations for returns on corporate capital expenditure. New investments shifted from expansionary spending to necessary expenditures like equipment upgrades and technological transformation. Second, the strengthening of "anti-internal competition" policies imposed constraints on inefficient and repetitive construction, significantly inhibiting investment behaviors aimed at scale competition and homogeneous capacity expansion, creating structural downward pressure on manufacturing investment in the short term. Third, the gradual phase-out of earlier policy stimuli.
Regarding real estate development investment, Guolian Minsheng believes that the cumulative year-on-year growth rate of real estate development investment further declined in December 2025, primarily due to the high base effect caused by the集中释放 of housing demand driven by policy efforts at the end of the previous year. Looking at the demand in December itself, the month-on-month improvement in property sales was basically in line with seasonal performance and did not show signs of超预期回暖, indicating that the industry may still face certain adjustment pressures in the short term.
Conditions and support exist for China's economy to stabilize and improve in 2026. When discussing the trend of the Chinese economy in 2026, Kang Yi stated that 2026 marks the beginning of the 15th Five-Year Plan period, with China's development standing at a new starting point. Although the impact of changes in the external environment is deepening and domestic stable development faces challenges, China's economy has a solid foundation, numerous advantages, strong resilience, and great potential. The supporting conditions and basic trend of long-term improvement have not changed. Overall, opportunities outweigh challenges, and favorable conditions are stronger than unfavorable factors. There are conditions and support for China's economy to stabilize and improve in 2026.
Guo Lei, Chief Economist at GF Securities, believes that overall, the 2025 annual economic data met expectations. However, December data is already in the past, and the post-Spring Festival work resumption season is relatively more critical. Judging from the marginal changes in fixed asset investment in December, local governments seem inclined to concentrate year-end projects as much as possible into the first quarter of 2026. The March work resumption season will carry over the impact of policy-oriented financial instruments from the previous year, combined with the policy direction of "promoting investment to stop falling and stabilize." Under normal circumstances, there should be a concentrated uptick in new project starts. The verification of this logic will largely determine the assumptions for the 2026 macroeconomic基本面.
Wang Qing believes that in 2026, vigorously boosting household consumption will be the main focus of growth-stabilizing policies. It is expected that the scale of fiscal funds for consumption promotion may be increased, and the scope of promotion could expand from durable consumer goods to general consumer goods and service consumption. With the disbursement of the first batch of national subsidy funds in 2026, retail sales growth may achieve a low-level recovery in the first quarter. For the full year, retail sales growth in 2026 is expected to accelerate from 3.7% in 2025 to around 5.0%, and the growth rate of service retail sales is also expected to pick up.
Regarding investment, institutions believe that infrastructure investment is highly likely to stop falling and stabilize in 2026, with a resurgence expected in the first quarter. Guolian Minsheng notes that although the planned issuance scale of new special bonds announced by local governments for the first quarter is not particularly high, the proportion of special bonds issued since the beginning of 2026 allocated to infrastructure is significantly higher than in the same period last year. Furthermore, high-frequency data such as blast furnace operating rates, mill operation rates, and cement shipment rates are currently at relatively high levels compared to historical同期, confirming the importance of "stabilizing infrastructure" at the beginning of the year.
Regarding manufacturing investment, Wen Bin believes that in 2026, with strategic emerging industries such as high-end equipment, new energy vehicles, and aerospace maintaining relatively rapid investment growth, the structure of manufacturing investment will continue to optimize. Incremental investment will increasingly concentrate in high-tech industries, as well as technological transformation and intelligent upgrading of traditional industries. Although the overall growth rate may still experience volatility in the short term due to the high base effect, fluctuations in external demand, and constraints on inefficient capacity, supported by the "quality-over-quantity" approach and the cultivation of new growth drivers, manufacturing investment will exhibit a trend of stabilizing with slight increases and structural upgrading in the medium to long term.
Additionally, regarding real estate development investment, Wang Qing believes that in 2026, alongside the escalation of real estate support policies and the accelerated disbursement of the massive 7 trillion yuan loan quota for real estate "whitelist" projects, the decline in real estate investment is expected to narrow significantly compared to 2025. However, this forecast carries substantial downside risks,关键在于 whether substantial guidance can be provided in 2026 to lower实际居民 mortgage interest rates, reverse market expectations, and activate market demand. Considering that current实际居民 mortgage rates are significantly偏高, there is ample policy space later to stabilize the real estate market and curb the decline in real estate investment.
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