Macro Anton
Deepening Challenges
China's economy expanded by just 2.8% in 2025, falling well short of the government's official target of 'around 5%'. This marks the slowest annual growth rate in decades, excluding the pandemic era. The slowdown is broad-based, with the prolonged property market crisis continuing to weigh heavily on consumer confidence and household wealth. Industrial profits have also taken a hit, plunging 13% in November alone.
Deflationary pressures remain persistent, with consumer prices falling for the fourth consecutive month. Youth unemployment has reached new highs, and local government debt issues are constraining fiscal stimulus options. While Beijing has announced several support measures, economists argue that more aggressive structural reforms are needed to transition the economy away from investment-led growth towards consumption.
