China’s economic growth has experienced a notable slowdown in 2025, raising concerns about its impact on the global economy. The Organisation for Economic Co-operation and Development (OECD) forecasts China’s GDP growth to decelerate to 4.7% in 2025, down from 5% in 2024, and further to 4.3% in 2026.
Several factors contribute to this downturn. The property market remains a significant challenge, with new home prices across 70 cities falling by 0.2% in May 2025, and second-hand home prices dropping by 0.5%, marking the steepest monthly declines in several months. Real estate investment also decreased by 10.7% in the first five months of the year.
Additionally, China’s fiscal revenue from January to May 2025 decreased by 0.3% year-on-year, reaching 9.66 trillion yuan ($1.34 trillion). This decline is attributed to a prolonged property slump, weak domestic confidence, and escalated trade tensions with the U.S. following Donald Trump’s return to office.
The manufacturing and export sectors also face challenges due to heightened U.S. tariffs. In May 2025, manufacturing output growth slowed to 5.8% from 6.1% in April, and exports to the U.S. dropped sharply by 35% compared to May 2024.
In response to these economic pressures, China has implemented monetary stimulus measures, including interest rate cuts and liquidity injections. However, the effects of these interventions have yet to be fully observed.
The slowdown in China’s economic growth has broader implications for the global economy. The OECD has revised its global GDP growth projections down to 2.9% for both 2025 and 2026, citing the deceleration in major economies, including China.
In summary, China’s economic growth slowdown in 2025, driven by challenges in the property market, fiscal revenue decline, and escalating trade tensions, poses significant concerns for the global economic landscape.
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